One suspects Nancy Gibbs? latest TIME column was motivated by a desire to tweak President Bush and his administration for encouraging our high-spending society. Regardless of the motivation, Gibbs makes valid points about the importance of frugality.
American greatness ? the vision of the founders, the courage of the pioneers, the industry of the nation builders ? reflected a mighty faith in the power of sacrifice as a muscle that made young nations strong.
Though her argument is basically sound, it?s unclear whether Gibbs understands that the sacrifice associated with private saving, the source of capital for economic growth, is different from the sacrifice associated with higher taxation. The latter results in redistribution of existing wealth and/or diversion of investment into less productive ventures than those that thrive in a free-market system.
Gibbs might benefit from reading this 2007 column about the importance of saving.
