Topic: Americans hoarding cash doing more harm to their economy? (Read 484 times)

In my opinion it would only be harmful to the tax payer, if people hoard large amounts of physical cash (coins & notes) because the reduction of coins & cash in circulation will increase the printing and minting of more coins & cash. The cost to mint coins and to print money will increase and the tax payer will have to pay more taxes for that.  

It is a very old discussion and debate, if it is good or bad to collect all those coins in a bottle, that are still supposed to be in circulation. Collecting old coins and notes that are not in circulation is not bad for the economy.

Should the citizens be held responsible to continue wasting cash on things that they do not need, just to stimulate the economy is simply preposterous.    They should rather pay off their debt, because that will be much better for the US economy with it's huge debt problem.  

The act of hoarding cash is contributory to the economic depression that we are all experiencing. But, the main cause of economic distress is still the pandemic. Because of this, a lot of business are shutdown and many people are unemployed forcing individuals to stash their cash. But, we should keep in mind that it is important that the money is still circulating by spending or investing it. For me, it is much better if they store their money in banks or invest it in platforms like cryptocurrency.

This link might help if you want an alternative to store your money other than in bank.
https://www.investopedia.com/financial-edge/0812/5-places-to-keep-your-money-when-you-dont-trust-the-banks.aspx

Actually economy would be fine if there wasn't too many fuck ups by the companies, the whole government is run like a company and that is why the economy is bad. Regular folks couldn't even try to hurt the economy even if they wanted to, they are not doing anything bad to it at all, even if all of them saved all of their money all at once.

Right now companies are getting hundreds of billions of dollars, even trillions in help from government, you think that money is not affecting the economy? Or caused by the regular people? Let the companies that fail go bankrupt and you will only have the decent legit ones alive, but they are not doing that, why? Because those companies that get some help from the government bribes those same politicians with money to get those money as well.

Well, we have been told a different story for years

That there are no savings, and America is made up of households living on credit, whether it be homes, cars, and whatnot. However, as it seems to me, you can't work it out both ways, like you can't have a cake and eat it (unless you are going to eat for the second time, of course). If you have cash on hand which you want to stash, you can't be in debt as debt forces you either to spend or to pay back (then mission accomplished). This way, something smells extremely fishy with this narrative, don't you think?

The analysis of this article makes a lot of sense, the uncertainty leads us to take drastic measures in one way or another to save our heritage. Loss of work is one of the main concerns of the American, for which the analysis indicates that they are using less their debit and credit cards.
The American economy could have this breakdown but everything would be solved gradually once they overcome the pandemic.

Any semblance of common sense in the field of economics has been lost, trying to save as much money as possible when things are going wrong with the economy makes complete sense, especially when according to some reports 30 million people on the United States have lost their jobs since the pandemic started, the government and economists alike cannot really ask people to keep spending their money as if nothing is happening when everyone can see that things are going in the wrong direction, it just doesn't make sense.

Fortunately it doesn't seem as if the people are really listening since there is a limit to the manipulation that governments can exercise over their citizens.

The stimulus really is not for investment. The money is for help for feeding at least to be safe from having other issue like hunger virus and ulcer  maybe caused lack of good nutrition. But many speculation have been on that it is an investment opportunity but I will use such for the purpose of taking care of the family as it given if I were.

Economics has become nonsense, its holed below the water line by politics and horrible bias to various causes rather then principles as any proper study should be considered.   Thats the shortest answer you will get to this subject, does it do harm to save the harvest for the winter?   No of course not and its silly to ever consider that but that is seriously where we are at in modern history.


I should in theory dig up some figures on this but its been true for many years, debts outweigh cash available to the average citizen.   So this idea just doesn't make sense on multiple fronts, people did already spend their cash and only ignoring the debt would give leeway to consider any other conclusion.

Those that are blaming the ones that are saving their money are way off base, it is true the economies of the world are based around consumer spending but it is ridiculous to ask to people to not hoard their cash and pay their debts when they do not know if they are going to have a job tomorrow, every single person and business entity does things to give themselves the best chance to survive these difficult times, this is why business are firing millions of people all over the world and yet this is seen by economists as responsible and yet when people act on response to this they are damaging the economy.

It seems they think they can do anything they want and that people are simply going to let them get away with it and while that is the case most of the time this time will be different as people cannot ignore the fact that if they lose their jobs there is not going to be anyone there to help them.

The average citizen who lost their job during this pandemic is spending money to sustain their life, the idea of people hoarding cash might be true with the rich as they do not do anything when the economic situation is not favorable but the general public is spending the money and i have seen many citing that people will invest in bitcoin when they get their stimulus package but the truth is far from that.

Its been months since the pandemic started. People are starving, the government of the countries are trying their best to appeal to the situation. Economic stabilization is a big problem because of the quarantine - no trade, no movement, no cash flow happening. People hoarding money, isn't a problem. That's the only way they know how to survive and Americans are not an exemption to this, even if we say that they have the richest economy. The budget of countries are allotted to its people, considering how many it is. It is also allotted in creating vaccine. So people have the right to keep their money. Anyways, some small businesses are already in action as well as transportation so at least, money is still circulating.

Now is the time for a recession, and people should accept it and move on, there will be good times after this recession it's rather pathetic when politicians asks the people to spend their savings to fix the problems they had caused.  Americans can hoard their cash for as long as they want and nobody can tell them what to do with their money.Nobody can force them to spend money.Cutting costs and saving money is smart decision during crisis,you don't know what will happen and when you are about to get fired by your boss.

Lol, who goes first? While you're spending cash other people are busy holding theirs, and all of a sudden you run out of cash and things don't get any better lol. You just die of hunger. So, I am not really going to blame the people, they are doing what they feel they should be doing at this time to stay on the safe side. If you keep spending your money in the name of helping the economy, you will spend it all and the economy will still be as it is, and you will start regretting, while others have saved their own money.

So, they are not doing the wrong, it's just how it's meant to be. It's been the same in every country where the virus started. People are losing their jobs, and things are getting hard.

It is collapsing right now. The debt problem is not only national but corporate. That seems to be where the real problem is. American corporations are deep in debt and don't have a way to pay it. There is a bond crisis going on right now that is suspiciously underreported by most media as the virus and lockdown are dominating the news. But corporate bonds that used to be considered investment grade are dropping down to junk status. Much of the QE we are seeing is going toward propping up the failing bond market. So the premise of the original post, that people saving money might be harming the economy, is a red herring. Individual citizens, most of whom might be holding onto a couple thousand dollars cash at the most, are not harming the economy. They are helping it. The notion that individual's holding cash could harm the economy comes from the fear of the inevitable. They want to lock down the money in bank accounts so they don't have to print more. But when the fear of printing more money leads to lockdowns of cash in addition to lockdowns of people, it is not a good sign for the future of the economy. When this does spin out of control, it will be because of corporate bailouts, not because of individuals holding cash. The bond crisis is in the trillions of dollars and growing.

What can be said of an economic system that becomes more volatile when its citizens become more frugal and financially responsible?

I think the US is in the process of making cash illegal by using a few different excuses. It is precisely the hoarding of cash that makes them nervous. They want to know where the money is at all times. They want access to it. They want to know who spent how much on what.

There is very little true economics left going on in the US. It's all politics now.

As an American I see the opposite happening - I know cases of friends who have blown their entire stimulus check within days of getting it. Same will happen for the second (likely to happen) and any others that may come after it.

According to economic laws, the more people spend, the stronger the economy grows. However, during the crisis, people receive much lower incomes, and prices for goods and services on the contrary grow. Businesses are trying to solve their problems at the expense of consumers. I think that ordinary citizens are acting completely appropriately, saving their money. I believe that the government should regulate the excessive appetites of businessmen who constantly raise prices, especially during the crisis, when people have less money. 

That depends how exactly Americans hoard the money.
If it's stored in their bank accounts it's still in the financial system that and it's circulating no matter that they don't actually spend it. If they keep it at home then it's another story.
Of course that hoarding money isn't the best thing for economy especially if lasts long time and people don't spend anything but it's kind of reasonable having in mind that we are heading towards very deep crisis.

sorry but I support the use of money by the American people. The government is trying hard to make the money circle increase many times but people are scared and only keep cash! When money is not brought in for investment and trading, GDP is bound to plummet and Americans will likely face a recession in the coming years. Therefore, I think the American people should work together to create a positive investment spirit, which will greatly benefit the economy.

It will really make them suffer to this pandemic more, and it will really hard for them to recover from their economic crash immediately. People should make the money move and circulate in their economy so that they will benefit from it and no one will suffer. It is not guaranteed for the people to hoard cash especially during this pandemic. People just need to understand that the money should regulate in the market so that it will not produce again any money that will lower the value of their money. You should use your money for your basic necessities that will help you survive the quarantine and not wasting it in your wallet to make it rot. If you have spare amount of money then you should help other people who are suffering from the pandemic.