By William L. Anderson

The article cites data showing that many U.S. retirees with substantial savings spend only a small fraction of them, then argues that this behavior does not harm the economy by “hoarding” money.

It rejects the Keynesian “paradox of thrift,” which holds that increased saving can reduce aggregate income and investment, contending that the view treats saving as equivalent to stuffing cash under a mattress.

Drawing on Austrian economics, the author maintains that saving supplies real resources for capital formation and that the dominant policy preference for continuous consumer spending reflects a circular, rather than productive, conception of economic activity.

An enduring myth in American politics is that wealthy people—and especially billionaires—are hoarding their money and not spending it, which somehow creates inequality and makes everyone poorer. (Of course, when billionaires do spend their money on themselves or their families, politicians like Bernie Sanders and Elizabeth Warren complain about that, too).

One pictures Scrooge McDuck swimming about in his safe full of gold coins, refusing to spend his riches, instead wallowing in greed. While the McDuck caricature is cartoonish fiction, threats by Sanders and other Democratic Party politicians against the wealthiest among us are quite real, and the calls by Democrats to confiscate much of their property are having a destructive effect upon future capital development.

However, according to Jean Chatzky in The Atlantic, the “hoarding” problem isn’t limited just to billionaires. No, it turns out that American retirees (yesterday’s Baby Boomers) are refusing to spend their retirement savings in amounts needed to “stimulate” the US economy. We have become—the horror!—Scrooge McDuck Nation. Writes Chatzky:

A landmark 2018 study by the Employee Benefit Research Institute found that the median individual with more than $500,000 in savings had, 20 years into retirement, spent just 12 percent of that sum. And a Corebridge/Greenwald Research survey of older adults with at least $100,000 showed that only 28 percent were comfortable watching their savings taper off to cover living expenses, ostensibly exactly what the money was saved for in the first place. This is a problem—not just for retirees but for the country. Savers who forgo gratification for decades end up not enjoying the money they’ve worked so hard to set aside. Meanwhile, the U.S. economy suffers as all of that money sits under the proverbial mattress instead of being spent.

A landmark 2018 study by the Employee Benefit Research Institute found that the........

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