I am a strong proponent of the savings habit. At the personal level, savings are what make your future possible. Savings provide a cushion for the unexpected, such as unemployment or unplanned expenses. Savings give you confidence when you are job hunting. Savings are what retirement is made of.
A look at the larger picture will only elevate the role of savings within a healthy economy. Production — and therefore economic growth — depends on savings. Behind every business loan is a pool of savings. No business could exist if it were not for savings. An easy way to understand this would be to consider a farmer who, instead of putting aside some corn for seed, consumed his whole crop. No seeds, no future crop, no business.
It is important to realize that the economy has severely weakened in large part because the national level of savings has dropped severely. It is a mistake to encourage further spending as the remedy whether personal or government.
Savings are important for all of the reasons I have cited, but it is even more important now as the way to recovery of a healthy economy.
