Why higher US savings won’t save the pandemi…

By Michael Pettis This post was originally published at China Financial Markets at the Carnegie Endowment for International Peace website According to a May 2020 CNN article, one consequence of the coronavirus pandemic is that “Americans are slashing their spending, hoarding cash and shrinking their credit card debt as they fear their jobs could disappear.” The article goes on to say that U.S. credit card debt has fallen by the largest percentage in thirty years while household savings rates have climbed to levels unseen since the 1980s.

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