Why is it that the U.S. savings rate on that chart was at its highest in the 1970s, when this country's economy was in the toilet?
I think you answered your own question, but add this to it: In the 1970s, the US was not an "instant gratification" society. Some vestiges of the Depression-Era still lingered. That doesn't exist anymore. Its consumption, consumption, consumption these days. People in their 20s and 30s used to save money. Now they go and party.
A lot of people are doing cash-out refis on their houses to buy cars with. Hence, the debt ratio skyrockets. Others I know are doing cash-out refis to consolodate other credit card debt. Others still are unemployed and are doing cash-out refis in order to buy groceries.
Look at it another way: Check the ads on TV. 0% financing and no payments for two years from -uh- everyone? Sounds like desperation for sales.
What say you?