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by Don Boudreaux on July 27, 2010

in Myths and Fallacies, Seen and Unseen, The Economy

Here’s a letter to the New York Times:

Bob Herbert is impressed with a new Rockefeller Foundation study by Yale’s Jacob Hacker and others that finds that Americans have become increasingly economically insecure over the past quarter century (“Long-Term Economic Pain,” July 27).  I read the study and, for several reasons, cannot accept the authors’ (and Mr. Herbert’s) conclusion that this measured insecurity reflects a failure of public policy.

For example, among the critical findings – as summarized by the Rockefeller Foundation – is this one: “Because many Americans have little or no savings, it can take six to eight years for families to recover from a 25% income drop.”  I’m sorry, but in modern America a lack of savings is almost always the result of individual choice.

Neither of my parents (both of whom were from working-class families and both of whom retired in 2001) ever earned more than the median income.  Yet they raised four children and always had adequate savings to see us through times when one or both of them were out of work or when we had unexpectedly high medical expenses.

To use the irresponsibility of some people as an excuse for raising taxes and imposing more regulations only enervates the economy while further encouraging irresponsibility.

Sincerely,
Donald J. Boudreaux

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