I just cannot get my mind around the thesis of this article from Sunday's New York times. Thrift has been an economic disaster for Japan? And the only reason the US will avoid Japan's fate is because our citizens will never practice thrift on the level the Japanese do?
I'm not much of an economist (that's what I get for being a liberal arts major!) and I don't pretend to fully understand the global downturn we're all in. But if, for my personal financial security (not to mention, sanity), I must cut back expenses, pay off debt and save for my retirement, it is disturbing to think that all of these things might lead to disaster for this country.
Am I being unpatriotic? Do I "owe" it to my country to save less? Spend more?
How could pauperizing myself be a good thing? Why would it be acceptable if I wind up depending upon state support in my old age rather than Social Security and my 401(K)? And since when is paying off my credit cards a BAD thing?
We live in interesting times, to be sure. I think I mean this in the Chinese curse sense!
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5 comments:
Grace,
I'd take anything written by the NY Times with a grain of salt. The Japanese must save their money, especially as they age. They are faced with declining government retirement benefits and MUST prepare for their own lives in old age.
Sound familiar?
The US is facing it's own Social Security and Medicare deficits.
The best line out of that article was spoken by one of the Japanese women: "All I want is a humble life." That is the most anyone could ask for. Having a humble life is one of the most fulfilling, richest experiences a person could ever have.
Keep saving your money as much as possible. The NY Times have their own ulterior motives. They're headed towards bankruptcy court within weeks. Possibly months.
SAVE!
I read something else about Japan (but I can't remember whose blog it was on) that indicated Japan has yet to recover from their recession due to a variety of factors, including their banking system, international trade and the Yen. What I take from that article is that frugality is likely a symptom of the economic problems they're still facing, not the cause.
And I'm with you. If times are tough the last thing I want to do is party my way off the edge of the cliff.
Japan suffered a "lost decade" of economic and market stagnation in the 1990's, in part because of an aging demographic that caused a slowdown in consumer spending. Some economists believe the same scenario is now present in our economy.
I, too, was somewhat disturbed by this article. Didn't make any sense to me. I will continue to save, save, and save again. I believe debt got us into this mess, and further debt would not help. Not sure why an article like that would be printed. Doesn't hold too much fact if you ask me.
There's a difference between debt and consumer spending. We live, after all, by choice in a capitalist economy. Capitalism relies on consumer spending to survive, its the way the economy functions. so yes, savings is good, no debt is good. But one of the reasons our economy is suffering is because everyone stopped doing any comsumer spending all at the same time. If you want an economy that doesnt rely on spending, find a socialist country.
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