An expanation of the paradox of thrift

[ThriftoRama]

Finally, a more sane alternative to the anti saver stories out there:

"By casting saving in such a negative light, it has encouraged people to think that thrift no longer matters. And most Americans have been only too happy to spend more freely. Household savings rates have fallen sharply for several decades. For two of the past three years, they have actually been negative, meaning that spending has exceeded income.

By fueling the housing bubble, this spending not only helped cause the current crisis, but also led to substantially increased borrowing from abroad. We’re poorer each year by the hundreds of billions of dollars that we must pay in interest on these loans."

http://www.nytimes.com/2009/02/15/bu...l?ref=business