Why Americans Spend Too Much

We spend too much because we think we are suppose to. We spend too much because we don't really think that it is too much. We have not been taught to value money. We think that we have worked hard, so we should be able to buy what we want, when we want it. Unfortunately, when the income decreases, our spending stays the same. Which is why we are in the pickle that we are in as a nation.

The 2008 financial crisis made it clear: Americans save too little, spend too much and borrow excessively, says Princeton professor Sheldon Garon. In Western Europe and East Asia, governments aggressively encourage people to save through special savings institutions and savings campaigns.

Garon has just released a new book, Beyond Our Means: Why America Spends While the World Saves. He discussed his findings with NPR:

Do Americans spend more than people in Western Europe and Asia?

"They definitely do. You can look at consumption levels and control for purchasing power over the last several decades, and America is simply in a league of its own. The only people who come close are people in Britain, but they are about 85 percent of the level of American consumption. Germans, French and others are in the 70 percent range, Japanese even a little lower. So Americans spend like no one else."

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