In general, I'm in favor of policies to reduce the consumption rate and increase the national savings rate, and I'm even for radical ideas in this direction like Robert Frank's progressive consumption tax. But I don't think Reid Cramer is right to argue that the current moment calls for policies that will encourage families to take their money out of circulation and instead put it in the bank, or in retirement accounts. In a recession, you want to induce people to spend money, quickly, to stimulate demand and kickstart the economy. Policies that increase savings -- that make it relatively more expensive to spend money than to hoard it -- are a strange response to a sagging economy. There are a lot of moments when we should cut consumption and increase savings, but it's hard to argue that this is one of them.
