Saving our way deeper into a hole

November 20, 2008
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A recent article in The Economist predicts a deep recession next year if we Americans abandon our spendthrift ways and swing back to a savings lifestyle. What other nation, the magazine wonders, would buy enough things to keep the worldâ??s factories humming?

By now, the rap is well documented. Americans save virtually nothing after having stashed away nearly one in every 10 dollars earned as recently as the 1980s. These figures sometimes exclude 401(k) programs, which amount to savings, but the overall point remains.

A saving culture appears to be making a tepid comeback as Americans are increasingly sobered by debt overhangs on everything from housing to cars to vacations. But savings levels still are nowhere near anything that would impress a Depression survivor.

Where is this headed? Is the savings resurgence of the past few months a trend, or is it little more than a fad destined to vanish as soon as good times return?
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  • I don't know but I'm making out like a bandit right now. I'm 27, pretty frugal and live in a one bedroom <1,000 sqft condo that I own make around the median income for Indianapolis and am going on spending sprees. I have a nice stash of money saved, paid off my debt for my credit cards and car, just have a mortgage. I've been pumping money into the stocks and fund markets, bought around 100 acres of land, and became a part investor in a business.

    What recession? He He He!
  • good for you... now the rest of the world, with only one home and not 7 are going to still try to get ahead.

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