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Hoarding reserves for hard times is the strategy of a chipmunk

by Ryan Ong

I hear a lot of people say keeping our reserves is a good idea, because we may need it in hard times. Well, you know what helps a country to survive hard times?

Take a look at countries that, instead of hoarding their reserves, pump the money back into the economy. The money goes toward opening new companies or expanding existing ones. The money goes into adult education subsidies, interest-free business loans, technology and university grants, and government-funded, public access research. The money makes it toward private sector entrepreneurship, with the potential to build large MNCs that in future, will contribute millions in tax dollars.

This, in turn, results in better employment – not more employment, mind you (we already have a lot of employment opportunities, the problem is that our graduates are becoming Uber drivers. We have an underemployment problem, not an unemployment problem).

Expanding companies have more demand for accountants, coders, digital content creators, engineers, illustrators – some may even find a need for middle managers.

Pumping more money into the economy also means people spend more. It means businesses manage to move their inventory, which means more revenue, which again means expansion and better jobs.

People with higher wages, who are incentivized to develop skills because there are positions waiting for them, and people willing and able to innovate and take risks – countries that have these qualities don’t just survive hard times. They have the ability to seize opportunities in hard times, and countries like these thrive rather than merely survive.

If your only solution to hard times is “hoard all the money”, then you’re frankly not qualified to lead. That’s the strategy of a chipmunk, not a visionary.

This was first published as a Facebook post and reproduced with permission. Ryan Ong is a writer about finance for the last 10 years.