President Obama's Treasury Secretary Timothy Geithner told a German reporter that Americans will need to save more to pave the way for a more prosperous future."Everyone is going to have to come to terms with the fact that we are going to save more in the United States. . . If the U.S. starts saving more, that changes the whole world's economic reality."
I agree. The United States should start saving more. Unfortunately, the policies that the Obama administration have implemented have encouraged people to do the exact opposite -- opting for a Keynesian approach that encourages increased consumption even if there's no money to pay for it.
Take Cash For Clunkers, for example. The United States government took money from frugal people who drive old cars and gave it to less frugal people who buy new cars -- often going into debt in the process. Meanwhile, other government programs are "helping" banks make loans: often to consumers who want to buy cars, houses, and vacations that they can't afford.
So yes, Mr. Geithner, you're right. Americans do need to start saving more. You should get the ball rolling by disavowing all your programs that promote bad behavior and discourage saving.
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