Is the difference of opinion about whether higher personal savings has a long term benefit to the country's economic well-being a matter of liberal vs. conservative thinking? It seems to me that profligate spending, unwise use of credit and shoddy decision making at all levels is what got us into this Great Recession. Therefore a more reasoned, disciplined approach to living seems to just what the doctor should order.
Isn't it more sensible to believe that higher personal and household savings increases the real personal wealth of the nation? I suppose this is only so if our government also acts rationally and reduces its spending, too.
I find nonsensical TeamObama's arguments that this bloated spending spree and the huge run-up in the national debt can somehow be reversed in the short term. (He said he intends to cut the deficit in half in 4 years.) Too many people will become dependent on this spending for it to be suddenly reduced.
It's unlikely that we will ever return to the bubble days of steadily increasing asset values. The new post-recession economy will reset itself to a generally lower base of true value, whether via inflation and devaluation of assets or by government fiat that we have to cut back, e.g., reduce carbon usage in favor of much higher cost sources to save the planet.
The following assessment included in the story makes the most sense to me.
"...Despite the immediate jolt to the economy, more personal saving would be a positive step in the long run, analysts say. More saving leads to more investment, which promotes economic growth, which leads to better living standards.
At the family level, social critics, economists and even many consumers seem to agree that a forced financial conservatism may be for the better..."
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