Other costs have increased in our daily lives. Our utility bills have soared for cable, Internet services and multiple phones. We've helped the dot-com companies flourish and made the owners unbelievably wealthy.

America in arears
During this same period, there has been increased demand for medical services. We've purchased larger houses financed by loans with adjustable rates or conditions favoring lenders. We've indulged our children with their own automobiles accompanied by even larger insurance costs.

In the past 20 years, we've increased our spending by reducing savings and adding debt at almost every level: mortgages, credit cards, automobile loans, industrial debt, financial leverage, national debt, unfunded obligations for Social Security, Medicare, Medicaid, federal and state pensions, and wherever else we can find available cash. We're so enamored of cheap consumer goods that we're willing to buy like crazy, even though this frenzy results in a lopsided global trade imbalance -- which is a principal reason for the inflation threat.

As a result, consumption has increased at an alarming rate. In just 25 years, consumption per person has increased by more than 60 percent.

Annual consumption

Making up for lost savings
At first, we paid for this consumption by dipping into our savings. Once we depleted that money, we fueled our spending by accumulating ever-increasing levels of debt.

How much would an average person have to save over the next 20 years to offset the decline in savings over the past 20 years?