I don't know if a shift in attitude would help, at least not in aggregate. It might work for one person, but if everyone did it, then it could end up being a wash or we could see other weirdness..
If everybody started saving 10% of their salary, the decrease in consumer spending would put deflationary pressure on the economy. That could, in turn, lead to a few different possible scenarios depending on the economic policy decisions of the government and the central bank:
1. If the economic authorities refused to respond and decided to "let nature take its course" on the economy, the reduction in consumer spending would lead to businesses shuttering and people losing their jobs. Maybe instead of 1/3 of people not saving any of their salary, 1/3 of people just wouldn't have salaries in the first place.
2. The central bank can lower interest rates thereby making it easier for people to borrow. This easy borrowing would provide an incentive for people to spend. This could counteract the effects of whatever was incentivizing them to save in the first place. Or maybe we'll end up in a situation where people think they're saving, borrowing, and spending all at the same time and what's really happening is that they're "investing" in some kind of asset bubble that they don't know is a bubble.
3. The fiscal authority borrows and spends money into the economy to make up for the drop in consumer spending (and, if distributed well, that money circulates and boosts consumers pending too). This fiscal expansion route is kind of the opposite of the monetary expansion route in scenario #2. Here, the government is going into debt in a stable and controlled manner. With the central bank lowering interest rates (#2 above), you're encouraging the expansion of private debt, which is unstable and can collapse.
I don't make economic policy, but if I did, I'd tend to lean toward option #3. Of course, it entails the central bank and the country's government working together to make it happen. The ECB would have to encourage (or at least allow) the EU member nations to go further into debt. In the case of America, the Fed doesn't have that kind of control over the government. If Congress decided to take on massive government debt and spend new money into the economy, the Fed would have no choice but to take the necessary actions to keep prices stable (raise interest rates, etc).
Well, that turned into a little rant about things I care about. I guess my overall point is that if Everyone started saving 10% of their salary, it would be a huge shock to the economy, and probably not a good one. And what happens next would depend on a lot of things that I think about a lot.
Anyway, solving this "problem" is not just about a shift in attitude toward saving. At least not in the general sense. I do agree with you that it's not an unsolvable problem for an average comfortably-living individual.
If everybody started saving 10% of their salary, the decrease in consumer spending would put deflationary pressure on the economy. That could, in turn, lead to a few different possible scenarios depending on the economic policy decisions of the government and the central bank:
1. If the economic authorities refused to respond and decided to "let nature take its course" on the economy, the reduction in consumer spending would lead to businesses shuttering and people losing their jobs. Maybe instead of 1/3 of people not saving any of their salary, 1/3 of people just wouldn't have salaries in the first place.
2. The central bank can lower interest rates thereby making it easier for people to borrow. This easy borrowing would provide an incentive for people to spend. This could counteract the effects of whatever was incentivizing them to save in the first place. Or maybe we'll end up in a situation where people think they're saving, borrowing, and spending all at the same time and what's really happening is that they're "investing" in some kind of asset bubble that they don't know is a bubble.
3. The fiscal authority borrows and spends money into the economy to make up for the drop in consumer spending (and, if distributed well, that money circulates and boosts consumers pending too). This fiscal expansion route is kind of the opposite of the monetary expansion route in scenario #2. Here, the government is going into debt in a stable and controlled manner. With the central bank lowering interest rates (#2 above), you're encouraging the expansion of private debt, which is unstable and can collapse.
I don't make economic policy, but if I did, I'd tend to lean toward option #3. Of course, it entails the central bank and the country's government working together to make it happen. The ECB would have to encourage (or at least allow) the EU member nations to go further into debt. In the case of America, the Fed doesn't have that kind of control over the government. If Congress decided to take on massive government debt and spend new money into the economy, the Fed would have no choice but to take the necessary actions to keep prices stable (raise interest rates, etc).
Well, that turned into a little rant about things I care about. I guess my overall point is that if Everyone started saving 10% of their salary, it would be a huge shock to the economy, and probably not a good one. And what happens next would depend on a lot of things that I think about a lot.
Anyway, solving this "problem" is not just about a shift in attitude toward saving. At least not in the general sense. I do agree with you that it's not an unsolvable problem for an average comfortably-living individual.