Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes

From what I remember of econ 101, if people are saving more, that should mean more deposits in banks which should then provoke banks to lend more out - easing the credit crunch, which should then lead to more spending, etc so in the long run the extra saving should actually help the economy, no?.

Just me, or is this headline a couple of words away from belonging on The Onion?

"The Capps started cutting back. In late spring, they began to trim their spending and paid down about half of their $11,000 credit-card debt. This summer, they used more than half of their government stimulus check, about $1,000, to open a savings account with an attractive interest rate of 5%."<p>They'd probably be better off paying off their credit card than opening a savings account.<p>Edit: Just got to the part that says they had already paid off their CC balance. My mistake.

How good could that deal on eggs be to justify the time and PITA to freeze and bag 10 dozen eggs individually? Were they paying her $5 a dozen to take 'em?

If United States consumers spend less, what other countries are most influenced by that?

Great!<p>What was most evil about the Reagan-Bush-Clinton-Bush era was the sociological contraction (reduction in good, stable, career-building jobs; mounting health and education costs; solidifying class barriers) that persisted in spite of impressive economic expansion. This was exemplified most poignantly by the 2000s "expansion", wherein job growth at its best was barely keeping up with the country's population increase, and salaries were stagnant except in a few industries. The average American has been in the damn recession for a long time, but now it's something deeper and it's being noticed because of its effect on "important people".<p>Consumer credit allowed this arrangement of economic-expansion-despite-social-contraction to continue, to the benefit of those riding (note my word choice) large corporations. People were getting poorer, less likely to find good jobs and less able to buy healthcare and higher education, but they could use a slab of plastic to buy trinkets, and this kept the consumer economy afloat, and the people in charge rich (and increasingly so).<p>The consumer credit rewind's bringing this arrangement to an end. This is beautiful. To those hard-working, saving Americans, keep it up!