In inflation-adjusted terms, we spent 40 percent less 20 years ago per capita than we do today. How did this happen?

Investing was winning the battle over consumerism until about two decades ago. Then, consumerism started to take over and the national savings rate began a steep downhill slide. Instead of saving about 10 percent per year as a nation, we started spending more and saving less.

Part of the problem is that industry and the government want us to buy, buy, buy. Financial firms, too, benefit from increased consumer spending. Meanwhile, state and federal governments benefit from runaway consumerism by taking in more taxes on goods as well as corporate earnings.

The good old days Some things really were better back in the day. Discover how our values have changed in the last two decades.

A spendthrift nation 1. America in arears 2. Make up for lost savings 3. Break the spending cycle 4. Plan to be financially solvent

Alas, we've been only too happy to oblige this demand for increased spending. This graph reveals that our national savings rate has plummeted over the past two decades.

Personal savings since the 1920s

We've accelerated our purchases of consumer goods like laptop computers, cell phones, digital cameras, DVD players, PDAs, iPods, game consoles, flat-panel televisions, large-screen displays, global positioning devices, and on and on. We eat out more, take more time off and buy vacation time shares.