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Beyond Our Means: Why America Spends While the World Saves

Sheldon Garon, Professor, History and East Asian Studies, Princeton University

March 8th, 2012

If the 2008 financial crisis has taught us anything, it is that Americans save too little, spend too much, and borrow excessively. What can we learn from East Asian and European countries that have fostered enduring cultures of saving over the past two centuries?  Sheldon Garon’s new book, Beyond Our Means, tells for the first time how other nations aggressively encouraged citizens to save by means of special savings institutions and savings campaigns. The U.S. government and businesses, meanwhile, promoted mass consumption and reliance on credit, culminating in the global financial meltdown.

Many economists believe people save according to universally rational calculations, saving the most in their middle years as they plan for retirement, and saving the least in welfare states. In reality, Europeans save at high rates despite generous welfare programs and aging populations. Americans save little, despite weaker social safety nets and a younger population.