Kudlow schools the White House on the necessity of saving and investment, while the administration prefers to hand out money

The great flaw in the thinking of the Democrats is that they are ignorant of the economic power of saving and investment. Saving is a good thing. Stocks, bonds, bank deposits, money market funds, commercial paper, venture capital, private equity, real estate partnerships -- all that saving is channeled into business investment. And whether that capital goes into new startups or small businesses or large firms, it finances the kind of new investment in plants and equipment and software and buildings that ultimately creates jobs and family incomes. And that, in turn, spurs consumption.

But pulling out just one dollar from the private sector and rechanneling it through the government as a transfer to someone else creates nothing. At best, it's a safety net. At worst, it may damage private-business activity and actually reduce employment.

Without saving, there can be no investment. And without investment, there can be no enhanced productivity, which is the ultimate source of long-term prosperity