The Supposed Tragedy of American Consumption

Several times every decade, you’ll encounter a whole series of articles in the media lamenting the spendthrift ways of the American consumer: too little saving; too much debt and consumption. Inevitably, a chorus of pundits will explain that disaster is just around the corner. Is the sky really falling? We’ll show you why this threat, perceived by many and frequently hyped by the press, doesn’t actually exist.

In December 2005, Senator Charles Grassley of Iowa, then chairman of the Finance Committee, issued.....