God Rest Ye Thrifty, Gentlemen

The latest video from the folks who brought us the excellent Fight of the Century is another winner! Here’s their holiday special, “Deck the Halls With Macro Follies”:

As usual, they’ve done their homework, and provided an informative backstory on the men and ideas presented in this video:

Each year, our attention turns to the holidays… and to holiday consumer spending! We’re told repeatedly that, because consumer spending is 70 percent of measured GDP, such spending is vital to economic growth and job creation. This must mean that savings, the opposite of consumption, is bad for growth.

This view of macroeconomics was first popularly asserted by Thomas Malthus in 1820, nearly 200 years ago. Malthus believed recessions were caused by “underconsumption” because there was a “general glut” of goods unsold. To recover from a recession and grow, we needed to stop all the saving and spend more to buy up all the goods on store shelves. Savers are like the miserly Ebenezer Scrooge. If you want a happy holiday, you’ve got to clear those shelves and give people a reason to produce more and create jobs. Or so Malthus thought…

Read the rest here.

Have a happy, economically responsible holiday season, everyone!

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