And in the mean time, personal savings absolutely plummeted.

What we're seeing is an uptake in the savings rate.

It's not just numbers on a piece of paper.

He's given a control that allows him to adjust his savings rate.

This is something I call the 50 20 paradox.

What's this building?

And what I'm going to talk about today is Save More Tomorrow.

So we're starting to pay for things with money that we have.

So this is a timely problem.

It's not even sustainable economically.

And slowly, slowly we're bringing it up to a moderate savings rate.

Holding down the right flank of the OECD, all the way on the other side, is Greece.

There was nothing to buy, unless you wanted to buy some rivets. Right?

Because I kind of view that as a reference point.

Until we get to this point right here, where everything starts blowing up.

Let me just put it into my mattress.

Well, think about smoking, for example.

I still have some money saved! I'm prepared for hard times.

Keep something for a rainy day.

You'd rent a smaller home.

Where maybe I saved 5, but someone else borrowed 5.

In an emergency you can fall back on your savings.

Put by money for the future.

Do you know what this was right here?

I don't dividend it out to the shareholders. I just keep that.

In an emergency you can fall back on your savings.

It should be noted, of course, that the United States and the U.K. are the next in line.

Now even after all of this granular level of control, do futureless language speakers seem to save more?

Now I'm going to describe to you a study I did with Gur Huberman, Emir Kamenica, Wei Jang where we looked at the retirement savings decisions of nearly a million Americans from about 650 plans all in the U.S.

It will pay you to save a part of your salary each month.

But the remainder is savings.

Pulling money out of the house as fast as they could, putting money on credit cards as fast as they could.

But there's another group of people who were more than offsetting that by taking credit.

What is the average difference here?

What about the remaining half of the people?

Now all of a sudden, the credit crisis hit and all this credit disappears.

Both my nine and seven year olds have a stock broker already.

Linguists and cognitive scientists have been exploring this question for many years now.

Every month, he saved ten thousand yen out of his income for his daughter.

The younger face gets happier and happier, saving nothing.

like something more distant and more different from the present, that's going to make it harder to save.

let's look back at that OECD graph that we were talking about.

Smoking is in some deep sense negative savings.

When people can't borrow anymore, the savings rate has to go to 10 because most of this is just from people taking on more credit.

It was above the GDP for three years in a row just before the crisis.