Tonight’s NewsHour features a piece called “The Paradox of Thrift.” The phrase refers to the potential downsides of squirreling money away, especially if all of us do it at once. While saving is often a good thing – and something most Americans have done very little of in recent years – when we save, we don’t spend. And spending is what we supposedly need a whole lot of right now. Therein lies the paradox.
The Bureau of Economic Analysis at the Department of Commerce tracks the personal savings rate for the United States. You can see in the chart below how the 2008 savings rate jumped from the previous years.
In February, I spoke to Dallas Salisbury, who runs choosetosave.org, an organization dedicated to funding creative public service ads on saving money. We had an interesting conversation on the merits of saving and how his efforts have largely fallen on deaf ears – until recently, that is:
And don’t miss previous Business Desk posts on the practical effects of saving: What is the worst case scenario if the consumer becomes a saver? AND Which is it: spend or save?