Why we need to accept more savings as a feature in the American economy:
- Because we don't have a choice anyway: Some form of savings is non-negotiable on a household level. A savings cushion for emergencies and one for retirement is not optional.
- Because savings of some sort are non-negotiable for businesses. Startup capital early, cashflow requirements later, capital expenditures over time.
- Because savings are really just deferred consumption by one party, who entrusts another party to do some spending on their behalf. If instead of spending $1000 on furniture, I put $1000 into corporate bonds which are then used to buy office furniture, the furniture industry still gets $1000, but in the meantime, the company to whom I lent the money does useful things with the furniture, producing profits for them and interest payments for me. Plus, someone got paid to work while using the furniture.
No official number for "too much" - but it's self-regulating. The more saved money available to invest, the lower interest rates will go. Eventually, rates fall to zero. That's too much saving. Or, it's too little new innovation. Free capital could result in lots of crazy ideas hitting the market - see "Pitchmen" on Discovery.