Save and invest (Kansas City Star, 11/27/06)Over the past decade, total assets in 401(k) plans have grown from $864 billion to $2.4 trillion, according to the Investment Company Institute.
Foreigners lend us money which we then invest and get a rate of return twice that at which we repay them. There is no economic theory under which that’s a bad decision.
The fallacy here is that foreigners don’t loan “us” money. Since this is in the context of federal budget deficits, the actual case is that foreigners loan the federal government money, which then spends it on current consumption. The investments in 401(k) plans is a completely unrelated phenomenon. But I suppose to the Leftist like OJ, there’s no difference between the government’s money and personal money.