Should consumers spend to save the economy?

In the current post-recession economy, taking a hold of our finances is key ... but should we save or spend?

The Obama administration is spearheading policies taking an aim at financial responsibility. However, tax rebates are given out to Americans to shop till they drop.

The ultimate mixed message? Perhaps.

So, what's good for the economy in the long run? In order to be productive in the future, consumers need to save now which will ensure financial stability to spend in the future.

According to an article at Yahoo Finance, "Economists have long fretted about the dangers between what the U.S. spends and what it earns." The U.S. borrows large sums of money from abroad, these debts continue to put downward pressure on the U.S. dollar. This is called an account-deficit. Thanks to our current economy, U.S. policy makers realize the time to end the gap is now.

"If you suffer a heart attack, your doctor's advice will probably include getting lots of regular exercise in the future -- but first you've got to get back on your feet," explains Mark Iwry, a senior adviser to Treasury Secretary Timothy Geithner.

We need to close the gap, before it gets any larger and causes any more damage. Although U.S. policy makers realize the gap needs to be closed, proposals have yet to be implemented. There is a proposal for expanding a tax credit for low income savers, and a retirement account requirement for employers. Saving as a requirement is the only way toward U.S. financial health.

The U.S. job outlook is a negative one, and little income growth certainly does not support consumer spending. This, along with tight credit, is only another reason to save. Yahoo Finance reports, " Although the U.S. account deficit dropped to 2.8 percent of the gross domestic product in the second quarter from a peak of 6.5 percent in late 2005, the latest news reports a growth in deficit.

What are U.S. consumers to do? Save over the next few months in an attempt to get your finances in order... then invest in opportunities that will boost future growth.