Johns Hopkins University economist Christopher Carroll thinks U.S. consumers have finally got religion when it comes to saving, after years of free spending. For the sake of the broader economy, he is hoping they take to heart the prayer of Saint Augustine.

Carroll, a leading scholar on how housing wealth boosted U.S. consumer spending, has a new paper out on how the financial crisis of the past two years has affected attitudes toward spending and saving. It isn’t pretty.    

 

“Our view is that American consumers are not merely resting from their former role as the world’s champion consumers, they are permanently reforming their spending patterns, in response to the end of the period of ever-more-available credit that fueled the unsustainably high spending of recent years.”

In other words, Carroll thinks spending will be weaker than most economists expect in the short term. The savings rate, which briefly turned negative during the height of the credit boom, will probably go back to the levels seen in the 1970s, when households routinely socked away 8 to 10 cents out of every dollar.

That would certainly put Americans on more sound financial footing, but a rapid rise in savings means a swfit drop in spending, and that is the last thing the U.S. and global economy need right now. That’s where Saint Augustine comes in.