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Go to the mattresses

Punish savers and make them spend money | Anatole Kaletsky - Times Online
I believe, in line with the vast majority of non-socialist economists, that Mr Cameron's campaign for savings is completely wrong; that “borrowing our way out of debt”, paradoxical as it sounds, is exactly the right prescription for our present problems.
The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings. This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets - or simply to save less and consume more.

But what I think is of little importance, especially as I have been wrong about so many aspects of this crisis

So the State is a better judge of what we do with our own money than we are, why not go the whole hog and confiscate all savings. The first sign of my very modest savings being taxed and I'm going to the mattresses.

Warren Buffett emailed this note to the directors of his company, Berkshire Hathaway:

“This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales will soon take off.”


Kalestsky gave up all claim to being a serious economist long ago when he decided to become a cheerleader for Brown.

But the government are already implementing Kaletsky's plan. If the interest on a savings account is less than the current rate of inflation then the total interest is effectively negative.

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