The most important thing happening in the United States right now has nothing to do with Barack Obama or the Tea Party. It isn't about terrorism or the Ground Zero mosque or Goldman Sachs. It's a shift that isn't even very perceptible to an outsider, because it's occurring in a place you can't really see - in the American mind. But in a few years' time, we'll view it as one of the permanent changes wrought by the economic crisis.
Americans, the world's great spenders, are learning the value of thrift. Or rather, they're rediscovering it. At one time, the U.S. was a nation of savers, people who could be counted on to reliably sock away 7 to 10 per cent of their disposable income every month. It wasn't until the Clinton years that the save-nothing mentality began to dominate, and personal debt went skyward, hitting record levels.
Now saving is back in style, and there's some proof that the trend will be lasting. Economists fret endlessly that this will hurt growth, maybe even lead to a double-dip recession. They should stop chewing their nails so much. The return of the American tightwad is actually a good thing.
First, the evidence. Remember the U.S. savings rate that was near zero as recently as 2007? It has now been higher than 5 per cent for 21 straight months. That hasn't happened since 1993. It's likely to go higher yet.
The malls aren't empty but most of the people in them are hanging on to their money unless they see a deal. Retail sales still aren't back to where they were before the recession - and even then there's some dispute about whether the official data overstate the amount of shopping going on.
You can see it in the driveways, too. In 2003, the U.S. Department of Transportation released a survey that found the American household had an average of 1.9 vehicles. Very well, except that it also had an average of 1.8 people available to drive them, making the United States the only country in the world to have cars available for ghosts. Now that situation is correcting itself.
You've heard about Detroit's miraculous recovery, right? About how Ford is minting money again, and General Motors is healthy enough to go public and pay back the bailout money? Let's get a grip on that "rebound." In the six years preceding the recession, Americans bought an average of 16.6 million vehicles a year - mostly trucks and SUVs. This year, the forecast is less than 12 million and about half will be passenger cars. The Hyundai Sonata now outsells the Dodge Ram pickup.
The reasons for the scrimping hardly need to be explained. When you have 25 million people who either don't have a job or are working part-time because they can't get full-time work, you have misery on an epic scale. About 6.2 million Americans have been unemployed for more than six months, which is more than the number of people who live in the cities of Chicago, Philadelphia and Dallas combined. Foreclosures are at a new high and the plunge in housing prices means that when people say "underwater," they're talking about their mortgages, not their scuba diving plans. Then there's Mount Debt.
With all this going against it, small wonder there is such a consensus the U.S. economy will stutter and lurch forward in fits and starts, growing a little but not quickly enough to put a dent in the unemployment. The list of reasons to be bearish is as long as a Chinese traffic jam.
And yet, and yet … that is the short-sighted nature of economics. The U.S. is the world's largest, most advanced economy - and maintains a massive lead over China - for a reason. It has a literate, educated labour force. Its people aren't afraid of moving for work (though the housing slump has made that more difficult). No one can touch the U.S. in technology and innovation and, just as importantly, in the willingness of corporate leaders to invest in those things. Its main problem is that it became far too reliant on consumer spending and borrowing, and that game is up.
But the return of the tightwad, far from just being a negative for short-term growth, has benefits, too. A higher savings rate allows the federal and state governments to fund more of their deficits from their own people, rather than with foreign money. It makes available more domestic capital for businesses to invest. And - this is the probably the most important bit - it allows U.S. families to cut their debt a lot faster than you might believe. One analysis by Deutsche Bank projects that by 2013, American households might be able bring their debt ratios down to where they were about 20 years ago.
That's probably too optimistic. But consider the possibility that today's frugality will feed a roaring economic expansion several years from now. In the short term, its economy is still messed up. But longer term? It's never wise to bet against the U.S.