Our leaders should encourage saving, not consuming.

This is from the book Market Wizards, 1988.

Jim Rogers, one of the best investors of all time is interviewed.

The basic problem in the world today is that America is consuming more than it is saving. You need to do everything you can to encourage saving and investment: Eliminate taxation of savings, the capital gains tax, and dual taxation of dividends; bring back the more attractive incentives for IRAs, Keoghs, and 401Ks. At the same time, you need to do everything you can to discourage consumption. Change our tax structure to utilize a value added tax, which taxes consumption rather than saving and investing. Cut government spending dramatically—and there are lots of ways of doing it without hurting the economy too badly. We would have problems, but the problems would not be nearly as bad as when they are forced on us. If we don't bite the bullet, then we are going to have a 1930s-type collapse.

With the present cast of jerks in Washington, it is not going to happen. The politicians are going to foul things up. They are not going to do what has to be done. They are going to be more concerned about keeping their votes and winning the next election. That is going to continue until we are forced into solving our problems. Then it is going to be a disaster.

Initially, the politicians will say, "We've got to bite the bullet and suffer through this. This is good for us; it will help clean out our system." People are going to buy that for a while. Then it is going to start to hurt. Then it is really going to start to hurt. At that point, the politicians are going to give up, and they are going to start to inflate their way out of it. But the only way to inflate your way out at that point is to really print money! The dollar could eventually become like the Argentine peso. Remember the Civil War expression, "I don't give a damn about a greenback dollar."