It Will All Hit the Fan in 2007, Part 2
In Part 1, I told you about how bankruptcy law were revised last year and hinted that the change may be a fulcrum event for the U.S economy.
Something else happened in 2005 that bodes ill for our economy.
The U.S. personal savings rate was negative for the first time since the Great Depression.
People are spending more than they earn.
Since our government is of the people, by the people, and for the people, I am not surprised by federal deficit spending since we, the people, also practice deficit spending.
Coming soon - Part 3!
posted by The Phantom Republican @ 11:11 AM
1 comments
1 Comments:
PR,
Once again I'm reminded of the "lies, damn lies, and statistics" line.
For years I've seen similar stats on the savings habits of the American people, usually comparing them with other countries (not surprisingly, they have higher savings rates, making us Americans look like the proverbial grasshopper).
The thing to be careful about such stats (and maybe you could provide a link to where you got the chart, what kind of data they used, how big a statistical sample, etc. etc.?) is that they're very easily skewed. Exactly what data are they using to come up with those numbers? Just because I don't have a lot of money in my savings account doesn't mean I'm living like a sailor on leave.
Maybe I'm maxing out on my 401K contributions. Maybe I've got a Roth IRA. Maybe most of my income is going towards a mortgage (and yes, I know about your concerns about the real estate bubble) that in the long, long run will provide a better return on investment than a straight savings account (not to mention that during that "long run" I'll have a place in which to live, but that's another discussion).
Especially with the interest rates being so low, there just isn't much incentive to have a bunch of money parked in a savings account.
I don't disagree with you, some people (you could say "a lot of people" and I could say "I hate people") are living beyond their means and one day they'll reap what they've sown (and they'll probably want joe taxpayer to bail them out).
But there are also a lot of people who are taking advantage of other, non-traditional "savings" and "investment" opportunities. Only looking at their savings account balances does not paint the whole picture.
Post a Comment
<< Home