Indeed. I didn't say that risk was bad, necessarily. Rather, encouraging risk to avoid a non-existent paradox of thrift is a dangerous thing. Personally, I think that the news about people losing less money at casinos is a good thing. They are much more likely to be able to invest it in worthwhile endeavors having not lost it ;)

Also part of the problem is that everyone was consuming their present and future income (negative net savings rate) - as opposed to some borrowing and consuming the present savings of others. As such we were actually consuming present capital and reducing our future income, as evidenced by the recent downturn.