This thread is a great example of why it's difficult to argue with those that feel that macroeconomics = personal finance.
Agree. I think the affect heuristic is at work here, and even if it wasn't, we seem to be attracted to moralizing when it helps explains things that are otherwise difficult to understand. Even economists seem to do this.
Moralizing posters may find it perplexing that there were centuries of criticisms by Chinese scholars of the laziness and spendthrift habits of those with Confucian values. And, of course, we only need to look back to the middle of the last century to observe the stunning poverty in those countries we associate with Confucian culture. Lee Kuan Yew, Singapore's former PM who recently passed, openly criticized the high spending/poor saving habits of Singapore's Chinese. But today we all know, of course, that Confucian values (save, save, save) explain China's high national savings rate and its monster trade surpluses!
I used to think economics was a mushy pseudo-science, incapable of the beauty and pursuit of truth you might find in the hard sciences. Studying macroeconomics has changed my thinking.
The difference between a country's savings and investment tells you exactly the size of its trade surplus or deficit, and the amount of capital it exports or imports. Until we can trade with aliens, savings must equal investment on Earth, and that means any change in the difference between savings and investment in one country must affect the difference between savings and investment elsewhere. It may be the case that lazy, high-spending Americans, Spaniards etc., randomly decided in the mid-2000s to go on a real estate and spending binge and massively increase their trade deficits (being lazy tends to make you less competitive and less productive) and in the process demand loans from China and Germany, those hardworking careful savers who are too prudent, at the personal and national level, to allow for the accumulation of debt (especially China). Germans, in particular, are too hardworking and morally upright to accept government handouts like universal health care. They long, however, for the generous maternity leave and frequent vacations taken by the debt-burdened but high life-living Americans.
Or, perhaps, government policies in the surplus countries that suppressed demand domestically and therefore pushed savings far above investment had an equal but opposite effect in the deficit countries. The resulting imbalances may have provided surplus countries some benefits in the short-term, but they are unsustainable and will ultimately harm all parties unless adequately addressed.
This gets into more complicated territory, however. Better to ignore and apply a stereotype, conceived likely in a matter of minutes, to millions of families that are going through what might be justifiably called a depression.
