Posted on May 20, 2010.
What would life for the average citizen is, as in an economy with a high savings rate, what is your function? What would life be like for the average citizen with a high savings rate as prescribed by the majority of the economist? What is the scope of a high savings rate? What is your basis for this operation? How can we make such an economy possible?
A high savings rate like Japan (30%) caused their economy to slow growth have almost 2 decades. The United States had a savings rate of about 10% over the following decades, the Second World War and had the best time of our economic history, since 1980 the savings rate has declined and was even a few negative years ago ..
There is nothing inherently good or bad from a higher rate of savings in a given country. China, Italy, India, Japan, Korea have high rates of savings (teenagers). Canada, Australia, New Zealand, Finland, Norway, the United States, all have a low savings rate (single digit). Among the reasons are cultural, some are not taxable (the United States we support penalize savings and loan), some are demographic.
Look at the modern history of Japan (since the end of the Second World War). It was and continues to have a relatively high rate of savings compared to other countries. Americans prefer riding a roller coaster when it comes to saving and saving virtually nothing. In fact, people in the United States had a negative savings rate (large credit card debts) for some time. At the present time are those who can save the fear of the future is unknown. We pay for this lifestyle now with the recession or if you prefer, depression. To answer your question, we would be in much better shape, but our lifestyle is not extravagant. Most families would own a car not two etc.etc.
