Saving is as Saving Does

Let's see if I can follow out someone else's logic with a different outcome. It was the author of a book about living life on the cheap. She had an incredibly cheap father who controlled the household purse so tightly, the author had to wear heavy clothing in the house in the winter. He kept the thermostat at 50 degrees. She picked up his habit of being cheap and saves 25 percent of her income.
She said if Americans saved like she did, our economy would not be robust.
This is the part I want to divert. I have often thought that businesses would be finished if people spent their money like I do. So, perhaps I have some of her philosophy imprinted in my own brain. I don't buy flowers, shop at little boutiques, buy art pieces, buy anything from late night TV watching, QVC or infomercials. Though, I do have to admit I bought a ShamWow as kind of a joke for Hubby. I don't buy crystal or china, expensive sheets, towels, or tablecloths. I rarely pay to have my hair or nails done...I could go on and on. I do pay a lot at the market, use the dry cleaners regularly, shop at Ross and Lowes and Target. We never leave an unpaid balance on our credit cards; we live within our means. We save a lot, but certainly not 25 percent.
But what would happen if everyone did? What if people slowly over the last 15 years had started saving more and more every month until they were up to 25 percent right now. I don't think we would be in the critical financial mess our country finds itself in (I'll keep the globe out of this, but it certainly would have had its impact).
Okay, it's 1994 and prices of houses dumped in So Cal. But at that time, loans were based on reality and the ability to pay. People had to have a 20 percent down payment and there was nary a whisper of "refinancing" to be able to handle the loan, nor this favorite "underwater" phrase.
So, let's say everyone decided to put 20 bucks a week away into their favorite savings account. There would have been a surge in money banks could use for small business loans, personal loans, construction loans. There probably would have been smaller growth in retail building, however there would have been lots of money for people to have to buy first time homes in the future. There would have been less credit cards offered because people would have been more interested in building their savings than watching money disappear on monthly statements. There would have been little loss to creditors, lowering interest rates which pay for dead beats. There would be less dead beats. People in unions would be responsible for their own pensions. There would have been a realistic simmer of growth, rather than a huge artificial growth. And in California, that would have been a lot better because of our dreaded taxes. When there is a boom in profit/growth/sales, the legislature gets giddy with power and creates zillions of new permanent programs and pensions that in turn weigh heavy on the taxpayers, i.e., businesses, which leave the state when regulations get too huge (which they are doing now)
Just think of the benefits of parents teaching their children to save back then. Teach your children well, as Crosby Stills and Nash would say. It would have been a beautiful thing.
Then and now.
http://www.nasdaq.com/newscontent/20091007/americans-expected-to-start-saving-more-money.aspx?storyid=19397342