Rich as they are, can Americans afford such quantities of shopping? Not really.

The current net savings rate in America is minus one percent or in other words people are spending more than they are earning and simply putting the deficit on their credit cards. The net savings rate in India is in the range of 20 per cent. This is where the attitudinal aspects come in.

Johnny Ringo's picture

Although this probably

Although this probably doesn't explain everything, we do have a tax system in this country that punishes saving and investment (we tax your income, and then if you successfully invest what we leave you, we'll tax those investments too - if you have anything left over when you're dead, then guess what? You got it.) Trashing this structure and adopting a tax system that rewards saving and investment while taxing consumption , like a heavily modified national sales tax ala the Fair Tax, would go far toward reversing the negative savings rate.
R. Neal's picture

I heard that -1% savings

I heard that -1% savings rate last week and it was a little shocking. I think the report said this was the first time since the Depression that savings were negative. The report also pointed out that the current economic "boom" is being fueled by consumer debt, which could become increasingly expensive with the national deficit ballooning out of control. We're all going to owe our souls to the company store!

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