L'Osservatore Romano: That first essential called savings

Ettore Gotti Tedeschi, head of the Institute for Works of Religion (commonly known as the Vatican Bank) says that savings are essential to revive the flagging world economy in a L'Osservatore Romano editorial:

Projects for economic growth, at this specific moment, must be based on the real and competitive support of employment, thanks to the best use of the resources available in every individual country. Employment security is based on the consolidation of domestic production, which must also be competitive if it is not to penalize consumers with protective measures.

In order to achieve this objective resources are needed for investment and to fund a more aggressive growth. Such resources are available. They are savings, which must be protected and turned to account by channelling them into projects that strengthen the national economies and employment and which, consequently, increase the value of the savings themselves.

However, savings today seem to be seen as one of the many resources to be used to solve contingent problems in the short-term. Instead, they are not a resource like other resources. They cannot easily be replenished, indeed, they are somewhat similar to oil whose reserves are running out and must therefore be used with caution, limiting waste. However, unlike what happens in the energy sector, savings cannot rely on on alternative sources. We must therefore stop seeing them as a lemon to be squeezed and value them instead as a good to be sustained and increased.

Savings today are the target of heavy taxation on the income they produce and are subject to further fiscal charges when they are invested and when income is created. They are also secretly taxed even when their remuneration does not cover the inflation rate and are threatened when, in the search of returns at all costs, they are chanelled into dangerous investments. Yet the greatest risk, that of extinction, is incurred by savings when they are directed to supporting consumption, that is, when their purchasing power is transformed into obligatory purchasing[. . .]

Savings therefore are a precious raw material and a competitive advantage to be used in the best possible way. They must be used to encourage development, growth and employment. They must not be considered as a burdensome guarantee of the debts contracted by states but rather as a guarantee of autonomy and independence of the family that has made them.

Read the full article here.