Save a lot! But also spend a lot! (...?)

The author, Mark Gongloff, describes a time before the Great Depression when Americans would spend more then we earned. They would splurge on lavish mansions and other luxuries with little left in the bank account. He says we are now back to those times and supports the theory with evidence from the Commerce Department. Americans increased their spending by .08% in February while their income only increased .02%. This is the third time in four months that the economy has lost money which has concerned some economists, and make them question if we will be heading ourselves into another depression with this excess spending.

The government recently estimated that Americans only save 3.7%, which has been the lowest since 2009 in August and then again back to 2007 in December. that time was shortly before the infamous depression occurred around December. At that time it fell to an all-time-low of 2.6%, and was the official start of the recession, according to the National Bureau of Economic Bureau of Economic Research. But fortunately after these recessions, the savings amount increases tremendously. So why is the average amount of savings decreasing and so quickly? I first jumped to the conclusion that people now feel comfortable in their economic situations. The recession was a few years ago, and people have now recovered, so they no longer feel the need to save. Rather they feel like they deserve to treat themselves and since they feel comfortable and trust in our country's current economic status, they won't mind dipping into their savings account.

Gongloff, however, has a different opinion. H believes that Americans savings accounts are decreasing because of "stagnant wages and rising gasoline prices." I believe that those two factors contribute to the lack of savings, but I also believe that Americans don't feel the need to save because they are comfortable. Another note, the economy is benefitting from the lack of saving and increase in spending. When my dad makes a larger purchase he will always treasure us and himself by saying, "I;m just helping out the economy". Economists are hoping that it will end well with job market increase as well as a wage increase, so the savings account is not as relied on. But they are really hoping that it doesn't end in job growth/income becoming stagnant. This could extremely hurt the economy and potentially lead us to another unwanted recession. So, I have concluded that I need to save a fair amount of my earnings, while continuing to spend a lot to keep the economy successfully running. Sounds contradictory...