He should tackle head-on the corporate sector's excessive savings, for instance, by taxing retained earnings that are not invested.
Unlike Japan, which fell into deep trouble because of an overleveraged corporate sector combined with minimal consumer spending and an excessive savings rate, U.S. mamasans don't control family purse strings.
Harking back to Keynes and Alvin Hansen, one of the early American Keynesians, Summers warns that modern economies face a chronic problem of deficient demand, or excessive saving (to economists, saving and demand are two sides of the same coin), which, absent some vigorous policy actions, will hold them back permanently.
Mortgage-interest deductions and exemptions from capital gains for residential property both favour excessive saving in property.
But in most of the rich world interest rates were already low; excessive saving was the problem.What is more, the Keynesians asserted, multipliers are much higher during nasty downturns than at other times.
Going back to Alvin Hansen, and to Keynes himself, the traditional remedy of centrists and moderate progressives has been to increase government spending and, where necessary, to run sizable budget deficits that can offset excessive saving in the private sector.
According to the American Psychiatric Association, hoarding occurs in 2-52-5percentf the population and is defined as the excessive saving of items that others may view as worthless.
On the other hand, excessive energy savings neglects the power consumption at the individual nodes; it results network partitioning due to nodes battery exhaustion.
It would boost consumers' purchasing power and squeeze corporate profits, which have accounted for most of the increase in China's excessive domestic saving in recent years.
"I want to work with Democrats and Republicans to make even bigger dents in our deficits," Mr. Obama continued, "find new savings cut excessive spending wherever it exists.
Economic conservatives argue that currently buoyant tax revenues should be used to reduce the budget deficit rather than to cut taxes.Everybody's favourite target for savings is excessive bureaucracy, which a federal structure makes particularly hard to tackle.
