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Reviews | The personal savings rate cannot stay this low indefinitely.


For high-income households, the bull market in equities through the end of 2021 was far more important than stimulus checks, according to Michael Englund, chief economist at Action Economics in Boulder, Colorado. Stocks have fallen this year along with the fiscal year. the stimulus faded and interest rates rose. Given all of these factors, “I guess we’re near the bottom for consumers’ willingness to spend more than they earn,” Englund told me.

David Levy, the president of the Levy Center, wrote in his organization’s November report that it is “mistaken” to think that savings accumulated during the pandemic will be available to support spending if the economy deteriorates. Much of the money has been absorbed into long-term savings or used to pay down debt and is therefore no longer available as “extra pocket money with a trigger,” Levy wrote. He wrote that the savings rate could reach 7% next year, which would be about the average for the decade ending in 2019. A drop in spending of this magnitude would lead to “a severe to severe decline in profits related to the recession,” he wrote. .

Levy concluded, “The reality is that the economy is in a bind with no plausible way out.”


I really enjoyed the November 18 edition of the Spatial Inequality Newsletter. One way the US could support struggling regions is through its tax system – an approach that Germany, Australia, Canada and India have used with great success. Lawmakers could, for example, declare that companies will not pay federal taxes on profits made in underfunded areas, using a formula that also takes into account wages paid in those areas. While the tax code may not be the first tool people think of when looking at regional inequalities, it is a potentially vital tool.

Reuven Avi-Yonah
Ann Arbour, Mich.

The author is a professor of law at the University of Michigan, specializing in taxation.


“In a theater, it happened that a fire broke out backstage. The clown came out to tell the audience. They thought it was a joke and clapped. He repeated it to them, and they became even more This is how I guess the world will be destroyed – amid universal hilarity of wits and pranksters who think this is all a joke.

— Soren Kierkegaard, “Either/Or” (1843; edited and translated by Howard V. Hong and Edna H. Hong, 1987)

nytimes Gt

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