A New Era of Household Thrift?
American households have dramatically turned away from years of rising spending and borrowing to embrace a new ethic of thrift and saving. This change of heart appears likely to continue for many years, which suggests the United States will have a weaker economic recovery than has been seen after other post-war recessions. While painful in the short term, this return of thrift will be beneficial in the long run. By Robert Stowe England June 14, 2009 [ Note: The following remarks were made at the 30th annual conference of American Independent Writers at George Washington University in Washington, D.C. on June 13.] Whatever history’s ultimate conclusion about the current economic downturn, it has already earned its place in the record books on several accounts. We have the highest unemployment rate in 25 years at 9.4 percent. We have lost 5.4 million jobs. Housing prices have declined the most since the Great Depression. More national debt has already been created during this downturn th...