Cheap is the new cool but will America stay thrifty?
By Claudia Parsons
NEW YORK (Reuters) - When Jeff Yeager's book "The Ultimate Cheapskate" came out 18 months ago, he felt like a voice crying in the wilderness telling people to ditch their cell phones, hoard their pennies and pay off the mortgage.
Now the Internet abounds with self-proclaimed penny-pinchers offering tips on living frugally as the recession bites into America's shop-'til-you-drop lifestyle.
The rise of thrift may be bad news for a U.S. economy where in 2006 consumer spending accounted for 70 percent of gross domestic product.
"Cheap is the new cool," said Yeager, who also has a blog called "The Ultimate Cheapskate" offering advice on enjoying life more by spending less. An Internet search for "cheapskate" finds a string of similar blogs.
"When the book came out, it and I were viewed as quaint little novelties, but now it's being taken much more seriously," Yeager said.
When he advised people to focus on paying off their mortgage as soon as possible and stay in their first home forever, Yeager said his publisher warned him to tone down his "radical" ideas.
Now the subprime mortgage crisis has shown the fallacy of acting as if house prices always go up and people are saving like rarely before. Official data last week showed that U.S. savings jumped to a record annual rate of $768.8 billion, the highest level since records began in 1959, and the saving rate climbed to a 15-year high of 6.9 percent of income.
Yeager said it was discouraging that hopes of an economic recovery are pinned on consumer spending rather than manufacturing and production. Continued...