I fundamentally disagree. The economy should become more and more efficient, using saved money to keep prices low and to raise wages. The Fed’s decision to raise prices is fundamentally harmful to poor people, whose wages will never realistically do better than inflation.
Actually, the savings rate has gone up. People who have income are on average more concerned about their future income and saving for the future rather than assuming their income will monotonically increase.
I understand the savings rate dramatically increased after the stimulus, but I'm more concerned about how much people will save going forward. The sunsetting unemployment benefits don't help either.
People are going to save what they can during a recession, but I'm not sure that we're going to see the savings rate improve much in 2021.
