Spend less, save more: Are we ready to shift priorities?

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Imagine the U.S. as a nation of chastened savers.

That’s how Merrill Lynch & Co. economist David Rosenberg sees the future in the wake of the economy’s struggles of the last year, the housing crash and the ongoing credit crunch.

He believes that ‘frugality is now replacing frivolity’ in the U.S., and he expects that shift to last as aging baby boomers, in particular, get religion about their personal finances.

His views are the focus of my weekend column in the Times, ‘The Case for a New National Frugality.’

Rosenberg has long had a dour outlook for the U.S. economy, so the idea that the world’s most devoted consumers (us) will shift from spending with abandon to saving with a passion fits his overall scenario.

But could the saving mentality really take hold in America, after 25 years of extraordinarily conspicuous consumption?

As I note in the column, at this point many people may figure it’s just too late for them to start saving. Maybe it has always been too late. As Edward Yardeni, an economist and head of Yardeni Research, puts it: ‘There’s just no way you can really save out of the median income in this country and retire comfortably.’

So it would be easier for many folks to just go on spending every dime and let the future take care of itself -- or not.

Anyone else want to weigh in on this issue?