Should You Be Saving Your Money? A Tale of Two Pigs
You have probably seen the new PSAs on TV, urging you to "Feed the Pig," i.e. to put money in your savings account rather than spending. You can...
You have probably seen the new PSAs on TV, urging you to "Feed the Pig," i.e. to put money in your savings account rather than spending. You can see it below. A dour looking pig-man prevents an impulsive shopper from making a unnecessary purchase. Instead, he's going to save the money.How thrifty. After years of reckless spending, we need this attitude. Spend less, save more. Then again, what if we don't. In Finland, where they are also deep in recession, they have a new ad campaign featuring a "Devil Pig," a piggy bank with devil features, urging Finns to not overreact to the financial crisis, and to spend. Think about it this way: with the stimulus bill, we're assuming that government spending will lift us out of the recession. For that to work, we need to spend as well. This is true not just of individuals, but also of companies. You should, say, be buying advertising with us, even though it seems like you might have less money this year. By not making a large ad buy, or by cutting back your production at your factory, you may be helping yourself in the short term, but in reality you are just contributing to the furthering of the recession.
It's all mental. Take a look at the most emailed articles on The New York Times website from earlier today. All but one of those stories are about the failing economy. We're not going to get anywhere with an attitude like that. If we all sit in our houses and try to wait this out, it will never fix itself.Granted, there is a lot to be said for the argument that this recession is less a recession, and more a necessary correction to what was an unsustainable economy. We are not, that argument goes, recessed. Rather, this is normal; the last 10 years or so were a fluke, and this more down-to-earth place is where the economy should be. That's probably more reasonable, but its hard to tell someone who just lost their job that said job was a creation of an unrealistic economy built on debt and bad decisions and that said job should never have existed in the first place.Here is that Feed The Pig ad: [youtube]http://www.youtube.com/watch?v=Gt_2lgg9xio