Daily Archive: April 2, 2009

Just heard on CNBC: McCain doesn’t understand economics

I just heard John McCain, in an interview on CNBC, criticize our debt to China by saying we need to get rid of it via a balanced budget.

Our incredible foreign debt – most of which is based in China – is a problem. We owe a LOT, and we are now relying on countries, primarily China, taking even more to fuel our new spending. So I’m fine with the idea that we need to reduce debt.

However, has McCain ever studied history at all? The attempt at balanced budget in 1936 that led to the recession of 1937 (you know, the recession within the Great Depression)? What about the consumption tax increase in Japan in 1997 that killed off gains they made during the Lost Decade?

I learned that stuff over a 10 week macro econ class. You’d think a senator would be at least mildly familiar with that stuff (or that some of his staff would tell him about it.

Tips on keeping your money in cash accounts – Apr. 2, 2009

Tips on keeping your money in cash accounts – Apr. 2, 2009 .

This fits in with my earlier post about a consumption-driven economy.  The savings rate is 3.6% now, which is very high for the US.  However, as one saves, that doesn’t mean that a .1% savings account is the only way to go.  Save wisely.

Right now, I’m spread out over a 2% yield savings account, rotating CD’s, and of course an appropriate amount of money in checking.  My retirement investments (which I’ve actually increased, so I guess that’s like more savings) are spread out over FDIC money market accounts and very conservative funds.  Small yield per year, but it’s not losing.  

(I also have a good chunk in a stock-oriented fund, ready to go as the market goes up…at some point).