Lack of Future Growth in America

When I talk about “desire” I mean the people of the United States has become a nation of spenders. We love to consume. Our savings rate is around zero with it going negative at times. How does a nation build the means of production to compete in the world marketplace when it no longer saves? We have a negative balance of payments equal to about 6% of GDP and federal deficits running in the hundreds of billions of dollars. And to fund all this we have become a nation depended on the kindness of strangers, i.e. the Chinese, Japanese, oil producing states, etc. I grew up during the Cold War so the thought that Communists are funding our hedonism just seems strange to me. But China is a nation of savers. “A penny saved may be a penny earned, but in China a penny saved is usually invested in an infrastructure project or an increase in manufacturing capacity. China’s gross domestic savings rate, after averaging 40% or so of GDP for most of the 1990’s, has grown over the past couple of years to close to 50% of GDP (Prestowitz).”

Hu is saving in China? Prestowitz, Clyde. 2008
http://www.econstrat.org/index.php?option=com_content&task=view&id=169&Itemid=1