America: Not Now, Or Ever, A Thrifty Country

Catherine Rampell has a piece in this morning's New York Times observing that "The economic downturn is forcing a return to a culture of thrift." But that observation depends a lot on how you define "return" and "thrift," and while it's clear American savings rates are on the rise -- they've been so unsustainably low that it's hard to expect anything else -- it's less obvious that Americans are becoming truly thrifty. That's because America is not a thrifty country.


First, there's an historical question. What have savings rates looked like in the past, and how have they changed after previous recessions? I thought this graph (from Calculated Risk, via Matt Yglesias) put some of that in perspective. (This is the personal savings rate since 1959, and the shaded blue lines are the recessions.)

personal savings rate.jpg

So the savings rate did tend to fluctuate a bit in previous recessions, though not by a great deal and not with any particularly admirable degree consistency. More importantly, an increase in the savings rate from somewhere around 0% (in 2005) to somewhere around 4% (where it is now) can be described as thrifty only because a 0% savings rate is an impressively terrible accomplishment by any standard.


I looked for some good international data on this, but the closest graph I could find was this one, from Brookings, that compares private savings rates between the US, Europe and Japan. (The numbers look different because the Brookings chart is gross private savings -- the savings from households and firms -- whereas the above data is only household savings.)


gross private savings.png 

Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A Stop-Motion Tour of New York City

A filmmaker animated hundreds of still photographs to create this Big Apple flip book

Video

The Absurd Psychology of Restaurant Menus

Would people eat healthier if celery was called "cool celery?"

Video

This Japanese Inn Has Been Open For 1,300 Years

It's one of the oldest family businesses in the world.

Video

What Happens Inside a Dying Mind?

Science cannot fully explain near-death experiences.

More in Politics

Just In