ATLANTA, Georgia (CNN) -- Back in the 1970s, Americans saved 14 cents out of every dollar. But as the years wore on, our savings rate dropped and we bought more than we could afford when it came to housing, furniture, TVs, cars -- just about everything!
Clark Howard says the Chinese are working their tails off, but the U.S. has the freedom to innovate and educate.
Four years ago, it got to the point where we spent three cents more than we made. So for every dollar we brought in, $1.03 went out, thanks to borrowed money.
Yet the current down economy has made us call a "timeout" on spending, whether we want to or not. Today we actually save four cents on every dollar, according to recent economic statistics. We're starting on the right path again.
Now to give you a comparison, in the People's Republic of China, people save an average of 25 percent of their paycheck. And they're pouring it into development. Watch what Clark says about free trade
I've been to China three times. I was there once in 1983. Back then, people had to walk for transportation. Only the privileged had bicycles. There were dirt roads. Most people lived in shacks and the Red Army was everywhere. In fact, I could only go around with a Red Army escort. It was a scary kind of place.
Then I went back in 1994 and things had changed so much. There were nicely paved roads, nice buildings and one of the towns I visited even had a McDonald's. Having been in China before where the food was inedible, as soon as I saw that McDonald's I was in that place having my double cheeseburger!
I had an opportunity to go back to China earlier this year. Once each year, I take my staff on a trip somewhere in the world -- wherever goes on sale. We pick the dates and then wait for someplace to go on discount and that's where we go. This year it was Shanghai on Delta Airlines for $850 round-trip.
The changes I saw this time blew me away even more than ever. I stepped off the plane in Shanghai and I was in the most modern airport terminal I've ever set foot in. Shanghai has a population of 22 million. In 1988, the tallest building in the city was 20 stories. Since then, more than 5,000 buildings expanding 15 stories or taller have been constructed.
The Chinese are working their tails off. I want you to know we have some serious competition in the world.
But we will be fine because we have something they don't have: We have freedom. And the power of that freedom is unbelievable. To do what you want, say what you want, live where you want.
In America, whenever we have felt like we were looking in the rearview mirror to see good stuff, we always manage to figure out a way to have good stuff happen to us in the future.
I think back to 1980. We were in the worst recession since the Great Depression, and Japan was on the rise. At the time, we thought Japan was going to have us for breakfast, lunch and dinner.
I remember we used to have the Detroit autoworkers beat up an old Japanese car with sledgehammers. Like that would stop Toyota! We were just sure they were going to own all of us -- "Japan Inc." they used to call it.
Well, guess what happened? We came back from those tough times and did great. And we'll do so again. Just as the Japanese were tough competition 29 years ago, I can tell you the Chinese are tough competition today.
But we'll do fine because we have that freedom and we know how to innovate and educate. Those things truly matter.