What gives, if Americans spend, we are called irresponsible and foolish, if we start saving, we are called tight and not supporting the recovery so, what do the pundents want? Make up your minds wall street, you can't have your cake and eat it too.

The problem is for years the wrong people have been saving and the wrong ones have been spending.

For people to work, someone needs to pay them.  To Buy their service or good as it were.  For companies to make profit, some has to buy their goods or services.  People saving, aren't spending, so sales are down hurting company profits.  Hurt profits lead to layoffs, which leads to more savings and the cycle continues.

So many of our problems began with the clog in the trickle down theory known as the frugal rich.  People with large sums of money that only seem to horde it unless it is used to bring in more money.  They seemed to forget where their profits came from: consumers.  They didn't get that for their consumers to have money, they needed to buy a good or service from those consumers, so they in turn could come buy things from them.  The game would have ended long ago if it weren't for cashing in equity and easy credit.

Now we have an upper class that refuses to spend what they have, and a lower class that can't spend what they don't have, so where do next year's profits come from?  How can we keep people employed if no one's buying?  How can stock prices go up if companies don't have increasing profits?

So the answer cliff is dependant on your situation.  If you're broke, in dbet and not sure of your job, it's time to start a bank account.  If you have a steady job, little to no debt, and lots in the bank, go spend some money.

I'm so sick of Wall Street getting mad that people are now saving.  We should be saving, and we should be saving a lot more than 5%.  It's true, the world needs to adjust to Americans starting to save more, and not get mad that we're no longer buying all the stuff that is being produced.  

I'm going to be saving now and in the future.  If wall street and the treasury don't like that, tough.  

>More spending is what will help jump-start the economy, and all this saving -- while good for personal bank accounts -- could be getting in the way of a recovery.

Well, yes, but it means we'll have a domestic-generated pile of cash available for lending, as opposed to having to go to the Chinese for our borrowing needs.

How about getting every man, woman, and child in this nation to focus on creating value for others?  Never mind getting paid: just get some work done.  Teach your kid to read.  Clean up the streat you live on.  Pull some weeds.  Not all of the work will be paid work, but the end result will be worth having.  Meanwhile, the better you get at doing what you do, the more likely you'll be able to attract a customer.  Quit "selling the sizzle" and focus on delivering the steak.

We got into this problem because far too many people developed an appetite for money they didn't earn.  Mostly this was borrowed money.

I suspect that it is a lack of raiding existing savings (& equity) rather than increased savings. A good number of people at my company have maxed out their borrowing against their 401K and stopped contributing. Many people have run out of available sources and are now forced to cut expenses.

Wall street market rally for almost three months and i would said is a kind of saving in equity market for long term investors.It doesn't help for spending and when it comes to  a point whereby company profit drop or less than expected(sound good for now is always better than expected),the bubble will burst again,as always the bastard giant will pocket the money.

If the money is invested (CDs, stocks, home equity,...) it is not really available for immediate spending. Nobody wants to sell the stocks that have come down and lock in losses and spend that money to spur the economy. Only those who kept the money in their mattresses can actually spend it.

Save as much as you can (I have done 50% at some time and now settled for about 25-30% of take home) and invest it where ever you are most comfortable.

But, most importantly realize that working hard 12-15 hours and not experiencing life is not the way to live life.

Economy is too vast with many moving parts to focus on any one aspect and think that is the answer.

That's not hte half of if SensibleSaver.  Interest on CDs doesn't just magically appear.  It needs to be directly invested in or loaned to a profitable business so that the wealth created can be redistributed as interest.  Stocks as we have learned twice in the last decade, can depriciate as much as appriciate in value, but beyond that, aren't as good as cash.  (the same goes for houses, gold, just about anything else).  They need to be sold, and what you get can depnd far less on what something is worth than what can afford to be paid.  I don't think there's enough hard currency in the world to cover the whole stock market.  Even then, who does a stock go up if the company it's invested in can't make a profit due to low sales.

It's like we're screwed either way.

I agree with SensibleSaver...I have an average Tech Job with an average salary.  I drive an middle-upper class car...I don't take on unnecessary debt.  And pay my credit card balance in full every month.  I save roughly 40% of my net pay.  

This isn't to say I'm cheap.  I buy things I would like to have...I do my research...and budget my time and money.  In short...I did everything in my power to be fiscally responsible.  And to be honest, I've been lucky, my habits have pretty much kept me from feeling the effects of this recession...It's been business as usual.

Yea in the long run I may not have the biggest toys or fanciest digs, but when things go sour, I'm safe and secure.

I dislike being vilified for being responsible and living within my means.  This blog is encouraging us to go out and spend spend spend.  That is what got us into this economic mess in the first place.  The economy has been growing unnaturally for a very long time...it's time to move back to more responsible and sustainable growth which comes when consumers can build their own wealth.  We may not have huge booms...but as a whole we avoid these disastrous busts.

So time to pay down those credit card balances, pay back foreign investors, and build up our own wallets with our own hard work.  We'll all be better off for it.