Americans are saving their money again.

That’s right. Americans have finally begun to reverse their trend of spending more money than they earn, at least in some small part. The good folks north of the border at the Globe and Mail ran an article about this returning phenomenon the other day where they shared some historical stats:

Americans are suddenly spending less than they earn. While that might not sound heretical or surprising – how long can you go on spending more money than you earn? – it is an epochal moment for the free-spending United States. After saving an average of more than 7 per cent of disposable income until almost 1990, the United States went into a savings tailspin. Savings rates fell, in fits and starts, from 8 per cent, through 6 per cent in the early 1990s, to 2 per cent around 2000, to the ignominy of a negative savings rate by mid-2005.

Now, however, that is changing rapidly. November economic data showed U.S. savings spiked to 2.8 per cent of disposable income, up from zero at the beginning of 2008. Is it that Americans have suddenly figured out that saving is a good thing, or are they taking some sort of moral stand against profligate spending?

Look at that! At the beginning of 2008, Americans were saving zero percent of their disposable income, but towards the end of the year we were up around three percent. Alright! Go America! What does this mean for the world? The writer of this piece, Paul Kedrosky, gives us some idea…

To put it in context, a U.S. savings rate of minus 1 per cent meant roughly $2-million a minute was flowing out of U.S. consumer savings into other things, mostly consumption, like TVs and home renovations, and so on. Or, on an annual basis, that worked out to almost $1.3-trillion exiting the U.S. banking system for other places.

Turn that around, however, and things get very different, very quickly. At a 3-per-cent savings rate, the United States will see $3.8-trillion showing up next year in the banking system just from domestic savers. At 7 per cent, almost $9-trillion will come rushing in as part of the savings tsunami. It is a fire hose of money pointed at the banks, and it’s just beginning.

Ha! How about that, world? The market is up the creek right now, but America is going to get its value back and we’re going to get it from saving more of our own money. It’s simple cause and effect, right? If you want more money in the banking system without draining more taxpayer dollars, then you PUT IT there via savings accounts.

And that’s just what this country is fixing to do. Let’s go bigger and better than a 3% savings rate. All Americans should sit down and look at their personal annual budget and try to earmark 5% of their annual earnings for savings only. And why not go even bigger and better than that? Budget 5% of your income for savings and another 5% for donations to one or two United States-based charitable organizations of your choosing. Your first 5% helps provide for your future and your second 5% helps to build up another community within your own nation.

If you can afford to do it, then why not?

Anthony Ratliff of Chicago may become a paralegal instead of a Web designer because he’s carrying $64,000 in debt and can’t afford to continue studying at the Illinois Institute of Art. Instead, he’s pursuing legal studies at a local community college.

“My dreams of doing what my talents allow me to do has been pretty much put on hold until the economy improves,” said Ratliff, 25.

A recent report by The Project on Student Debt found that nearly three of five members of the class of 2007 left school with debt. The average debt graduates carried that year was $20,098, a 6 percent increase over the previous year.

This really is a shame. Mr. Ratliff might be one of the best web designers of our time, but we’ll never know because he is being forced into a different profession. There are many stories of this happening over at Student Loan Stories and I know the feeling (somewhat). I wish Mr. Ratliff the best in his job search and I hope that he can pay down his loans in a reasonable amount of time.

In my situation (which is completely different than Mr. Ratliff’s situation) I might be forced out of my current job because they don’t offer enough of an annual salary increase. The job offers a standard 3% increase over the previous year’s salary – barely a cost of living bump. For those of us who go above and beyond the call of duty, we get an extra point or two in addition to the 3% (I actually got about three points higher because I’ve really kicked it up at work over the last 12 months). Frankly, though, it’s not enough for me to ever hope to get out of the rat race of living paycheck to paycheck with a meager savings for retirement. So I can appreciate Mr. Ratliff’s situation where he wants to do one thing (in my case, stay at my current job), but his student loans are forcing him to do something else (in my case, find higher paying employment).

The message that is reinforced in the article is that these are tough times. You’ll notice in the “comments” section of the Daily Record article that I had to make a comment to another respondent. The worst thing that can happen in this situation is for people to project their own personal situations on to the experiences of the subjects of these articles. Would you ever hear someone who has a job say to someone who just lost their job: “I didn’t lose my job because I’m a worthwhile employee. You should try not sucking at your job and maybe you wouldn’t lose it!” Of course not. The situation is the same with gigantic student loan debt. Sometimes students don’t have access to Auntie Mae’s fortune, the ability to go into the military, or the option to go to a less expensive school. Other times people DO work their entire time in college and graduate school and still wind up with some student loan debt.

All I’m saying is that it’s crazy for people to harangue and blast the people in these stories by using their own lives as an example. How narcissistic? My best to Mr. Ratliff and everyone out there fighting to survive under massive student loan debt.