Prudence lives yet

So says the Economist, reporting on how savers get absolutely screwed by governments the world over.

No one offers to help them out, even though saving is needed to allow business investment which, in turn, generates growth. Asians, told off in the 1990s for their current-account deficits, now get lectured for saving too much.

This is quite a different paradox of thrift from the usual one. In theory, everybody regards thrift as a virtue. In practice, they treat it as a vice.

See? Savings are needed for investment which generates growth.

Because he is such fun to call an idiot a thousand different ways, let us turn to one of Keynes' bons mots quoted in the article: "Whenever you save five shillings, you put a man out of work for the day." This too is meaningless: presumably I should not only spend every penny I earn, but borrow as much as I can. In fact, the logical conclusion is that we should make work as arduous as possible, and set up economically-useless projects purely to create "employment". Well chaps, I hope you liked the modern era: Keynesianism sounds more like the Stone Age to me.

The writer, coming at this from an American perspective, also puts his finger on a crucial point in what will become, if not stopped, the sheer scandal of British pension provision.

In Britain state benefits are means-tested. An elderly person with more than £22,250 ($32,000) in savings, hardly a golden nest-egg, has to pay the full cost of nursing-home care, which can easily exceed £40,000 a year. Those Britons who have saved money in the form of a personal pension must turn the bulk of their pot into an annuity by age 75; if they drop dead at 76, the insurance company keeps the lot.

Thanks a bunch, Gord. Such prudence to discourage saving, and such fair-mindedness to force us into buying expensive financial products we neither need nor want. Brilliant. We owe you one. Add it to all the other debts you clocked up for us.