RSSHousehold Saving Rates for Selected Countries
Household saving is the primary domestic source of funds to finance capital investment, which is a major stimulus for long-term economic growth. As the chart indicates, household saving rates vary a great deal between countries. This is partly due to the extent to which old-age pensions are funded by government rather than through personal saving and the extent to which governments provide insurance against sickness and unemployment. The age composition of the population is also relevant because the elderly tend to deplete financial assets acquired during their working years, so that a country with a high share of retired persons will usually have a low savings rate.
Over the period covered in the table, saving rates have been stable or rising in France, Austria, Italy, Norway and Portugal but have been falling in the United States, Canada, Japan and Australia. The saving rate in the United States is particularly troubling when the amount of Social Security and Medicare payments are taken into account. That is, without these payments, seniors would use up their savings at a faster rate leaving the U.S. saving rate even lower—possibly even negative—than it is at this time (0.5%).
45 Responses to “Household Saving Rates for Selected Countries”
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June 15th, 2008 at 10:39 am
We should chart US Household spending/saving. In particular, how much of household spending now goes to service debt?
June 15th, 2008 at 12:29 pm
Great point jims! If we would actually educate our children in personal finance to the level we educate in the arts, and drama, the trend would change. I recall my own high school required more credits in health class than in economics or personal finance. We raise our children to strive to be actors, actresses, and sports heroes, rather than train them to build wealth, and balance a budget, and then wonder why our national budget fails to be a top issue in the campaign.
June 15th, 2008 at 5:25 pm
Part of the problem, WBBenny, is that there seems to a distinct lack of deferred gratification. Today’s youth have been ruined by parents who indulge their every whim by using their own personal wealth so their children will “like them.” Such hogwash.
Another part of the problem is one that has perplexed me for years. Why does our government tax interest earnings from savings when receiving a tax break would encourage people to look out for themselves rather than rely living off the government upon leaving the work force. We all know just how responsible our government is towards the citizens…NOT !!!
June 15th, 2008 at 7:17 pm
If the federal government would discontinue the excessive handouts and giveaways, society would not have become so spoiled! Society thinks that the federal government is mommy and daddy.
June 15th, 2008 at 8:45 pm
The problem is the majority of the people in this country do not pay attention to what’s going on in their government. They seem too preoccupied with what’s going on in their own personal life to see what’s happening around them. It’s like the majority is a bunch of grasshoppers playing all day, living beyond their means, hoping for the payday, when they can sue someone, the ant working for it, or some company, so they can retire and continue to play play play. And if no big payday, they expect the government will bail them out. Like this whole mortgage fiasco.
While they’ve been playing, everything has fallen apart. The dollar has crashed, inflation in through the roof, unemployment is growing, people are going bankrupt, and the gap between the rich and the poor has grown almost to the point where nobody will ever be able to catch up.
I’m afraid the only way to wake people up is to have a long deep recession, or another depression, which will drive people to pay attention.
June 16th, 2008 at 10:49 pm
It’s funny in a way, I work in the construction trade for myself with no employees, and we all know how that is right now. Even though work is slow, I refuse to lower my prices as NONE of my costs have gone down and I am competitive enough as it is for what I do. However both my friends and my professional peers wonder how I am able to afford the ‘down time’. Well for the little over a year that I have been in business, my business has ALWAYS run in the black. I get small discounts from my suppliers because I either pay by cash, check, or credit card (therefor my vendors have no billing costs). I have never paid so much as a single dime of interest on my credit card as it has a ZERO balance by the billing date. My car and my truck are owned outright, as are all my tools and other equipment.
In fact everything I own, I own outright. Therefor I am servicing NO debt (other than my student loan). To go a step further, I have more in true savings (not savings that is waiting to pay a bill) than any of my friends or peers.
Don’t get me wrong, I’m not rich. In fact, quite the contrary. I have simply learned that I do not need to have EVERYTHING and that includes a huge consumer debt that I need to service.
Sure most of my friends drive nicer cars (which they don’t really own). Have more plasma TV`s (which they don’t really own). Go out for dinner more often than I do (financing dinner out just makes SO much sense to me….NOT!). Many of them are messing in their boxers if they cant get their 40 hours! Not me! I view discretionary spending beginning at day 91. Meaning that I consider myself as having NO money until I have 3 months coverage in the bank. THEN and ONLY THEN do I consider buying a TV or whatever.
Maybe the government, instead of taxing the earnings on savings, develops a tax to penalize those that have no savings(tongue-in-cheek). Let’s face it, if the average American is spending 30 to 50 percent of their income on consumer goods at upwards of 25% interest, had they been smarter with their money they could afford to save 10% of their income like every financial adviser out there says we should.
June 16th, 2008 at 10:59 pm
wdr,
If you turn the lens around, delayed gratification seems to be the one thing we as a society are good at when one considers how long the gratification of “paying off the purchase” takes to achieve
June 17th, 2008 at 12:35 pm
For those who believe the American over-consumption myth and the fallacy of irresponsible middle-class America as people consumed by appetites for goods they don’t need, and who think little of cost, see Prof. Elizabeth Warren
http://bostonreview.net/BR30.5/warrentyagi.html
http://harvardmagazine.com/2006/01/p-the-middle-class-on-the.html
June 17th, 2008 at 4:02 pm
I guess I was lucky, I watched my parents struggle with a debt load that absorbed a huge chunk of their income, and vowed never to be in that situation. Cash is Gold, and Credit is Fool’s Gold.
Though I think my personal savings rate is at 4% not too high, but I’m hoping to double or triple that in few years. Nice thing about not being materialistic is that when you decided you want something you usually have the cash sitting around, or to spare.
Of course, the problem with our nation is that too many people are geared to be consumers and spend more than they make (thus getting in debt), but that is neither here nor there. The problem that we need to address is a bloated failing monstrosity that we call government.
Personally I think the best way to deal with it would be to abolish it all together, and go back to the Articles of Confederation, which allowed the states the power of autonomy. In that way different states could compete more effectively and the winners would be the most economically powerful, because people would flock to those states to escape other states.
We also have to keep in mind that taxes account for a good chunk of the price of EVERYTHING. Corporate Income Tax, Personal Income Tax, Sales Tax, Registration Tax, Property Tax, so on and so forth. We as a nation have become enslaved by a government that has usurped the vision of our founders and put crowns on the heads of its leaders, who are nothing more than demagogues, and hustlers.
June 17th, 2008 at 9:59 pm
harry_,
Today’s consumer derives little satisfacation in actually paying for anything. Today’s consumer only derives satisfaction from having the thing.
mys
June 18th, 2008 at 3:36 am
Someone said we don’t need a welfare state if everyone pulled their weight..I think it was Archie Bunker said that…Maybe that’s what we really need to do..Get rid all government handouts and force people to make it on there own..Then we might just get back to what our country was…A country of people helping people..I;m sure if you looked back into Americian History you would see a a nation of we not a nation of I..A nation of we is when we help each other..A nation of I is I got mine who cares if you got yours..Over the years we have become a nation of I…YANKEE TRADER
June 18th, 2008 at 2:12 pm
Personal savings are only part of it all. Look into how badly this has been institutionalized in government and industry, by Americans of course who bring their personal credit lust to the jobs of course. Idle cash is textbook foolishness for corporations. They have holes in their pockets for reinvestment, M&A, and boosting CEO salaries. The reserves at commercial banks are appalling. And we know how well the government manages our tax dollars and government credit.
June 19th, 2008 at 6:15 am
While all governments have fiat money these days. The United States has suffered under dishonest money less gracefully then most. Once the US government’s dollar became a world reserve currency, the ability to exercise monetary discipline simply evaporated under a fiat money regime. It was too easy to pass debt on to foreigners who behaved as if those dollars were backed by gold, as they had been before 1933. Elite bankers who could operate in a more or less lawless way with fractional reserve banking (also known as fraud) and fiat money (also known as a Ponzi scheme) were free to steal money at will.
Such double dealings by the largest banks made passing the buck on to somebody else a respectable practice (so long as it was done via ignoring the constitution with silent sanction). The people merely begin using rampant debt as a way of life, because that is what all the large organizations in their life were doing. The banks pressured the government into letting them steal from the people and the government then followed the banks example. Eventually the people begin playing the credit game too. Now we have a massive debt. If you teach your children to embezzle as a way of life, will you be shocked when they end up borrowing money without any intention to repay it?
June 19th, 2008 at 11:18 am
Savings? When comparing with other countries savings rates, do we (US) use the same data to arrive at the percentage, and how is the US rate computed? Are the same types of data used as other countries use.?
I have heard that the US does not include a homeowners equity whereas in other countries the equity is counted as savings.
June 20th, 2008 at 5:23 pm
What this shows – along with a chart of the shift to two-income families – is that the American Dream of a house, car for each adult, plenty of money to spend on toys and fun… that dream is a myth as foolish as Santa Claus.
And trying to live a myth will bankrupt you.
June 20th, 2008 at 6:53 pm
Hard to save when we lost about 50% of the dollar’s value since 2000. What would you be saving? Money printing has out stripped our ability to make any sense of the concept of saving.
June 21st, 2008 at 8:31 am
We try to save but the problem is life is more expensive now and the jobs pay the same. Not one company has increased rates in my business and many others since September 11th, 2001. The companies got to scale back and say they were in a hardship sent headquarters to the islands to avoid taxes, gave the CEO’s more money and told employees be thankful you have a job. The years of an employee retiring with one company is over, college students come out of college not ready to compete with the true hard working employee they just want a job and will take a job for low or no money. Which the company loves and tells the older employee we just can’t keep on paying you more money. I work in television which is a hard industry to work in and not getting any easier these companies are some of the worst at it. They keep you project based or the ever popular freelance or permalance term so they do not have to pay healthcare. they don’t want to commit to you because they may get rid of you early and then no strings are attached and they can hire cheap. How is it that a CEO can make 87 million dollars for doing nothing but being a yes man and the hard working employees get let go for working hard at there jobs and getting no raises. Food is getting more expensive gas is getting more expensive not because there was a change in demand because we have grown dependent and they can raise the price we let it get this way. We the people who made this country great stepped away from caring about the country, put our worries on credit and debt and let this happen. We can’t fix it if the companies don’t start paying real salaries
June 23rd, 2008 at 10:29 am
i agree with guesswhotoo6. instead of saving dollars we should be saving dollar denominated assets. assets that are only valued/sold in dollars. like real estate, and precious metals. the government will always tell you what you want to hear in order to push their agenda forward.
sadly, i believe that as far as our monetary policy is concerned, the government is committed to wrecking the dollar rather than save it. looking to history of other great nations of their time. i look to france during the big tulip bubble, and the first fiat currency set up by john law. they were in a war and had to devalue their currency, they set up a fiat currency based on realestate instead of gold/silver or “faith”. the problem was that in the end you cant devalue real estate to pay for a war. sadly, many countries have passed on the leadership of being the world’s “greatest” while struggling in expensive and sometimes unwinnable wars.
June 26th, 2008 at 3:01 pm
Credit cards which don’t have to be paid off each month, are the biggest financial disaster for household wealth that was ever devised. Credit Card Co’s prey on the ignorant , foolhardy and those that need instant gratification. Many people don’t seem to realize that credit is not free money, its actually the opposite ie. a very expensive loan. We need to go back to the days when “if you can’t pay for it with cash then you can’t afford it”. A house is the only item where this rule shouldn’t be strictly used. People would be surprised at how much richer they would be if they followed a pay as you go plan. Now almost every item you buy can be financed. I expect to see this soon: “Buy this cereal box today and pay for it the next time you grocery shop.” Today I passed a shop named “car title pay day loans.” How desperate is that? I could probably get a $500 loan but if for any reason I couldn’t pay the company back on time, I’m guessing they get to re-possess the car and sell it and I would likely still owe on the original car loan. This is predatory lending at its finest. There must be a lot of stupid and/or desperate people to fall for this, because this company is still in business.
July 1st, 2008 at 11:29 pm
The cost of living, gas prices, where you reside and your disposable income determines how much you can save. I live where I grew up and it is now one of the most expensive places to find housing and you have to drive to nearly everything.
We do not get cost of living raises anymore, we have few benefits, if any, where we work and have to depend on ourselves to finance our retirement.
With all that expense, what’s left to use for home improvement, vacation, or keeping up with technology? Not much.
July 8th, 2008 at 10:21 am
Whatever happened to aspiring to a higher cause? Where did this ‘I want mine too’ attitude come from? Too many wanting too much [in the way of material goods] too fast. It is time to back off and become realistic. I live in an upscale community, but I can afford to do so based on my current income and savings plans. If you can’t realistically afford to pay, then don’t come crying to me, the taxpayer, to support your habits.
Unfortunately, that is the recurring theme of many in this country, let the taxpayer pay, removing all incentive to work harder and smarter for personal gain.
July 8th, 2008 at 8:00 pm
You have to be taught, carefully taught. That’s what government funded (i.e. public schooling) schools have done for the last thirty or forty years. Taught students to feel entitled. The government will take care of us all from cradle to grave. Carefully hidden is the truth that the government is a stand in for us. Thus we are taxed to death to pay for all this “generosity” known as Medicare, Social Security, Child Income Tax Credits, etc. Please, we are only getting what we deserve for allowing such ignorance to be perpetuated by the greedy politicians.
July 9th, 2008 at 8:46 pm
Cayely says that government funded schools (the same ones we have had in the US for over 100 years) are teaching people to rely on government, hence not save for their retirement. However, France and Germany are much more social welfare states than the US, and yet their savings rate has been stable or rising (according to Perot). Why is this happening is a socialist state?
The problem isn’t big spending on social programs, but low, low, low wages. Americans saved when factory jobs paid great wages and benefits. Yes, high wages and great retirement benefits. Now that wages are negative for the past 30 years, factory jobs outsourced, people do not have as much discretionary income as before, so saving has taken a huge hit.
What we need are high paying jobs for high school dropouts (in 1950, the HS graduation rate was only 50%); public transportation; universal healthcare; increased funding for teachers in urban settings; free college tuition to those who can do the work; all of this should be paid for with a reduced military budget; higher corporate taxes (corporations are outsourcing jobs anyway, so tax them for it); raise the income tax rate on the top 5% of incomes back up over 70% (it was 91% when Frank Sinatra was hot in the 40′s and 50′s, and he did all right!)
July 12th, 2008 at 12:37 pm
Sorry Bpear, you can lead a horse to water but can’t make him drink.
I come from a state with failing urban school systems spending $20,000 per child. It’s not a money issue — it’s a cultural issue and until poor, urban black and other minority communities straighten out their own attitudes and have more members who value education no amount of public spending will help them. They have to help themelves.
If you’re valuing education, we’re not worrying about high paying jobs for high school drop outs — you reap what you sew.
There is no need to provide free college. There is a need to attack the cost of college education, and the number of institutions both state and private that have forgotten their primary role is to educate kids, not provide cushy jobs. I’d have no problem providing subsidies for critically needed professions such as teachers, nurses, and engineers. If you want a degree in english or puppetry or something else that doesn’t contribute to the economy, feel free to join the military and trade labor for college money.
Public Transportation is incredibly innefficient outside of the small number of cities with the densities to support it. We have not built our cities, since the time of the street car, to be efficient for pedestrians and trains. Street car suburbs opened up the cities enough to make cars practical, and ever since we’ve taken advantage of the time efficiency of private transportation to boost our national economic output. Inter urban rail has roles in specific areas, but not on the scale of Europe where it exists as a government jobs program.
Socialized medicine is also unnecessary — it’s fiddling over how to finance something, instead of attacking the costs. We protect insurance companies and health providers through regulations that prevent competitors from easily entering the market, that needs to change. We act too selfishly and spend far too much money on people who are terminally ill, or trying to pursue expensive therapies with little value (such as fertility treatments). It would be better to lower the costs of providing healthcare, along with adopting a cultural attitude that goes with the flow of life instead of resisting it at great cost. Those are far better then crippling socialist taxes and government rationing of healthcare.
Corporations are not bad. Neither is the military. Thank the corporations for the extremely high quality of life we enjoy. Thank our current military spending for the past 60 years of relative peace, after centuries when many roughly equal top tier countries fought numerous and prolonged wars culminating in World War II.
Nor is success a bad thing that deserves to be punished by punitive tax rates. Celebrate the diversity of humanity, not impose a regime of government control on people’s lives.
July 13th, 2008 at 8:19 pm
OK, let’s look very closely as to what is happening around us now…. And let’s be perfectly clear (CRYSTAL CLEAR) on this understanding…
“IT’S TIME TO LOOK AT WHERE AMERICA IS NOW” FOR IT WILL NEVER BE THIS WAY AGAIN..!!
We have the past to learn from…the present to be in…and the future to be prepared for….
The present is the most important part…to see the way clearly….exactly what is happening now….is most important…to ALLOW US TO change the future…..
In the past 100 hundred years…(let’s just say since 1908) there have been a lot of ups and downs…tons of them…
Signs are showing that we are due for a down, and I feel a big one…. In fact the “Greatest down for the U.S. in 100 years…
Signs are everywhere…and I mean everywhere…starting with money that is not available like it use to be…which is sinking the real estate market (and our nest eggs)…
What do we have left if our greatest investment is back to zero?
Oil, black gold…not Texas crude…but Arab Oil….has doubled in the last year….which affects…literally every single part of our way of life…of what is left in our pocket books…(has our income doubled) and how this is plainly showing us the disaster around the corner…
The powers that be do not want you to know how really bad it is now or how bad it will be….this will only make it worse sooner…they need to take longer so they can take more advantage of destroying everything we all have worked so hard to have…
Their plan is to have a “new world order” the ultimate control over all of us….
We also have another “MAJOR PROBLEM WITH AMERICA. WE ARE ASLEEP AT THE WHEEL ABOUT”…I WILL GIVE YOU THREE CLUES…..
#1 CHINA
#2 CHINA
#3 CHINA
Please think about this….and tell all your friends to pass the word….
We only have one America…and unless we AND….
I WILL SAY AGAIN, UNLESS WE THE PEOPLE FOR THE PEOPLE….GET INVOLVED WITH OUR COUNTRY’S FUTURE…WE WILL LOSE THE AMERICA WE KNOW!!
I will look at responses and open up more and add to this.
July 14th, 2008 at 1:27 am
Regarding the low savings rate. Why are we taxing interest on savings? Let us tax credit card use instead!
July 14th, 2008 at 10:42 am
Paul:
You may be on to something here. As the old saying about taxation goes, “If you want less of something, tax it. If you want more of something, make it deductible.”
The Editor
July 14th, 2008 at 1:34 pm
To the Editor:
Regarding taxes, deductions, and social security. I suggested to my congressman that a millionaire may want to opt-out of social security, or he may prefer a tax deduction instead of receiving social security benefits.
I gave an example of a millionaire who decides he doesn’t need $12,000 in social security benefits and prefers a $12,000 tax deduction instead. If he is in the 30% tax bracket he saves $3,600 on his taxes and gives a gift of $8,400 to the USA.
I would like those options available when I retire in 15 years.
July 14th, 2008 at 3:48 pm
Paul:
What a great idea (sort of self-imposed “means testing”), and one that deserves serious consideration by Congress. So, now you have the flip side to the taxation saying (“…if you want more of something, make it deductible”).
The Editor
July 14th, 2008 at 4:33 pm
To the Editor:
Thank you and thanks for your work on this website. I think there is a glimmer of hope!
July 14th, 2008 at 10:13 pm
Where is the definition of what constitutes savings? What is included?
savings accounts at banks?
401K or similar vehicles for savings?
U.S. savings bonds?
Equity in a home?
How can we know what we are talking about without a definition? Approaching a serious subject without defining the terms used is, or should be, an insult to the intelligence of the public. Get serious!
In the national accounts, saving is estimated by subtracting household consumption expenditure from household disposable income.
The latter consists essentially of income from employment and from the operation of unincorporated enterprises, plus receipts of interest, dividends and social benefits minus payments of income taxes, interest and social security contributions. Note that enterprise income includes imputed rents paid by owner-occupiers of dwellings.
Household consumption expenditure consists mainly of cash outlays for consumer goods and services but it also includes the imputed expenditures that owner occupiers pay, as occupiers, to themselves as owners of their dwellings.
Households include households plus non-profit institutions serving households.
The household saving rate is calculated as the ratio of household saving to household disposable income.
Saving rates may be measured on either a net or a gross basis. Net saving rates are measured after deducting consumption of fixed capital (depreciation) in respect of assets used in enterprises operated by households and in respect of owner-occupied dwellings from saving and from the disposable income of households, so that both saving and disposable income are shown on a net basis. Sometimes, countries have difficulties in estimating consumption of fixed capital for the household sector. The international system of accounts therefore provides for both disposable income and saving to be shown on a gross basis, i.e. with both aggregates including consumption of fixed capital. All figures are shown on a net basis.
Because saving is a residual between two large aggregates – disposable income and household consumption expenditure – both of which are subject to estimation errors, estimates of savings are subject to large relative errors and revisions over time.
August 11th, 2008 at 7:53 pm
Again, the national savings rate mirrors my personal savings rate. But recently my consumption has been drawn way back.
How do Americans compare to these same countries in terms of consumption…or over consumption…furthermore excess consumption?
Americans, and I include myself have lived the past 10 years on borrowed money. Sources include home equity (and I am in the mortgage business), credit card and other sources of easy credit. I am hurting currently because of the credit crisis but I am not spending anywhere near what I did and I am paying cash as I go!
August 24th, 2008 at 9:13 pm
I have watched Mr. Perot for years and have quite a bit of respect for him. However, I wonder if he is in touch with average Joe like he thinks he is. Thats who I am … average Joe. How do we see things? You talk about saving money. That is a hard thing to do when raising a family today. We are worried about having our house paid off when we retire and living off SS and what retirement plans we are lucky enough to have now but may lose at the stroke of a pen. How can we save money when it take it all to live? When you do get ahead somthing breaks or someone gets sick. Our government allow gas companies, insurance companies, electric companies and on and on to charge too much money. That is who is taking all the money. Is that a hard thing to understand? Where are our raises? I live in WV and we are not seeing people lose homes here. We live within our means and are careful not to offend people that have less than the other guy. I guess what I am saying is that average Joe wants what Mr. Perots generation had. Why did our government let it slip away? It must be a goal to destroy the American dream. I don’t care to live in a small home and drive a used truck, but if somone does not lower prices or give us a raise, somthing has got to go and I will start with insurance premiums.
September 10th, 2008 at 10:52 pm
Mr. Perot
My questions is, What is France doing that is different than what we do here in the United States.
How is it that they can save pretty consistently at 12%
Is there cost of living different, lower. Or is it their health care,housing,gas,food cost. Or are they at a higher Tax Rate.
Please explain ..
And with the state of the economy that it we have now, High gas prices, food prices soaring. etc.
What would you suggest the normal house hold family do different, to be able to save more when almost every dime is spent just getting by. Do we need to scale down, smaller houses, etc.
September 26th, 2008 at 11:33 am
Great site!
Can you possibly come up with a chart showing the savings rates by category of income? Similar to the taxes paid by income chart you have?
I hear people say that raising taxes on the wealthy would hurt our economy…How is that when they actually have the extra money to spend? Lower income does not have the extra money to spend so they just do not spend it. And with savings rates so low this not only affects now but the future as they will not have extra money for a long time until they can acheive enough in savings to be able to spend some extra money.
TRICKLE DOWN ECONOMICS DOES NOT WORK! Greedy corporations can simply pass the cost on to the consumer that mostly consists of lower income. Not fair!
I am in agreement that more laws makes things harder but We need to be able to put salary caps on these money hungry corporations with CEO’s making a killing when they have many employees making minimum wage. Like the oil companies for example…The top 5 made over 120 billion in profits and still are looking for tax breaks!
I am a union sheet metal worker and have been laid off for 12 months now. I cannot work in my field for 3 more years as I signed a contract to allow myself to get free training from the union. Why can’t we make corporations sign contracts keeping them from shipping jobs overseas or lose the ability to do business in the USA! If you want to do business in this country then keep the jobs here or GO AWAY!
SOrry for rambling. Just I have 5 kids…2 with special needs and without work I cannot support my family.
I am tired of hearing how the “bad mortgages” are a huge problem…How about getting people back to work so they can actually pay their mortgages? I was fully able to pay my mortgage until I lost my job. Now I am 3 months behind and very near losing my home. It has nothing to do with people spending more than they make like the media has everyone believing. I have 17% of my union hall currently out of work. 479 out of approx. 3,000 members not working. And the ones that are working are struggling to bring home 40 hour checks. And that is just one trade…The Carpenters, Plumbers, drywallers, masons, escavators, roofers and all the other trades linked to building new homes are also in very bad shape….WAKE UP BUSH!!! WE ARE IN A RECESSION AND HAVE BEEN FOR A LONG TIME!!!
September 30th, 2008 at 3:48 pm
Sharp edge you sound like the typical american”tired”. believe it or not you helped to put us in this situation, with the help of me and every other american in this country. We as americans dont demand more. I feel for you Sharp Edge, i too dont make enough to support my family, when i told my boss all he could say is that the company does not have the money. We cant change the past and playing the blame game will not help us either. what we must do is change, change today, and change NOW. we must be proactive about being selective with the people we spend our money with. we have to be ethical when all around us are theives. for example: i have not shopped at walmart for 4 years. since i found out that they treat their employees like crap, buy inferior products, and force american companies out of bussiness like vlasic pickles(http://www.fastcompany.com/magazine/77/walmart.html). people used to ridicule me and tell me that i am not hurting walmart, i would just smile and reply “yeah, but im sure as hell not helping them”. most of those people finally saw what i was talking about and have since stopped shopping there. to be totaly honest i went back to the method my grandmother used to use, i would gather all of the sales papers of the local grocers and find the things that i needed on sale. i would only buy those things needed first and usually in bulk. eventually i noticed that i was saving half of what i used to spend on food in walmart. then i noticed that i mostly got the buy one get one free items (something walmart does not offer)
not only was i saving money but i was saving other stores and keeping their employees with a job. remember that when walmart has no compitition their “low price always” will be “our price always”.
Sharp Edge, my grandfather and all of my uncles worked in a steel plant. it amazed me how that plant fueled the economy in the surrounding areas. what was beautiful and american about that plant was that for every piece of steel that anyone purchased they new they were giving not only to the steel company but to the steel workers, their families, and the economy. that plant gradually slowed production, as people retired they did not replece them. the money stoped flowing through the families. now the area that used to be alive, is now dead and resembles a ghost town.
there is not much that you can do, there is not much i can do, but together as a whole we can change this situation. we dont need a bail out package. we need a pitch in package. i will pray for you and your family Sharp Edge, and i will hope that you will do the same. you can e-mail me at Warrenpressure@yahoo.com
December 29th, 2008 at 1:41 pm
Savings would happen if people paid themselves first. How many in poverty have cell phones, HDTV, play video games, smoke cigarettes, drink coffee or pop (instead of water) and don’t take care of themselves? It is many. Yet they want more…free health care, guaranteed retirements, etc. Unions today only hurt business by making them non-competitive in a global market (GM, Chrysler, Ford, et al) and lawyers have increased the cost of doing business tremendously…and not just in the medical area. This New Year’s, every American should consider what is really needed in their lives and what is excess.
The country is now out of control. People have lost the drive that made the country great and in its place has come an entitlement mentality. Historically, this begins the end of a great civilization and the USofA is not immune. There needs to be drastic cut backs in entitlement programs (shock the system) and government needs to be cut back substantially to pay down debt before its pryamid scheme lay wreck to the country.
These are tough times and they will get worse. People look to the past and expect things will get better. Unfortunately, you need to look to the future and follow the trends to see the extremely difficult situation America is in today. Drastic measures are needed, but people don’t have the stomach for drastic results. And don’t buy the reasoning that the rich should bail out America…their wealth is easily moved to other markets where better opportunities reside.
The biggest problems lay in Washington. Maybe 5% of the politicians deserve to be serving the public. The rest should be voted out. Does America have the guts to stand up to the career politicians and vote them out in 2010, 2012 and into the future. Make them accountable, just as you would any employee. These politicans are on the same entitlement train of the public and its is only making the long-term pain more significant.
December 29th, 2008 at 11:22 pm
RE: Comment 37
Well said, mclocklart.
The Editor
January 21st, 2009 at 5:27 am
Why is everyone so surprised by the figures?
It’s quite simple, our manufacturing sector has been eroding from the 1970s onward and was dramatically accelerated by things like NAFTA.
Now if America is not really making anything but junk cars that nobody wants (not even us) then where exactly are we getting money from?
It is clear that this problem is based on human emotions that have been exploited by psychologists and focus groups working on keeping us Americans as consumers, and no emphasis on producing anything.
Why pay an American $25 an hour when you can pay someone in a foreign country $2 an hour?
All machines need operating systems and it is deregulation that has unleashed the animal of pure profit systems and corporate greed and obscenely wealthy CEOs whose only job is to raise stock values quarterly.
And guess what. We knew it but the gluttony and partying was soooo fun until it was time to clean house!
Happy job hunting at your nearest McDonald’s as that’s where we shall all work in time.
February 7th, 2009 at 9:56 pm
[...] we can’t ignore how miserable we are at saving money. The savings rate is much higher in Europe, nearing 14% and staying steady, while it has been declining in the US, Canada, and Japan. There [...]
July 3rd, 2009 at 8:38 am
Free Health Care, mclockheart? Show me a world where healthcare is free!!!
Single Payer healthcare is the only option. It will free up the citizens money to allow for a savings account, which is a luxury people cannot afford today.
Yes, I agree with you about cell phones and HDTV. And I have a computer. I have a cell phone and had to buy an HDTV because, well I need my Channel 11. But I don’t have pay tv or radio, an ipod, a GPS sytem, Guitar Hero or Wii …. And I STILL can’t pay myself first. Why? Because my health bills a too costly and that is what I spend my money on!!!!
Oh, And my dogs health bill, too. Yes, I have a dog. I had two dogs, but one died.
The bill ran us $4,000 just to find out we had to put her to sleep. So I guess it’s my fault for having a dog, too.
I should just sit in a room and shoot myself, huh?
September 22nd, 2009 at 5:11 am
Very interesting topic and great replies. Now, the interesting part of this all is that the US Economy, which has been top dog due to a thing called consumerism. The fact is that the US is and always will be relied upon by all other nations to be the consumer driven economy. However, these times are changing. Since this topic was posted, the savings rate has increased to I believe close to 5% at a time when our economy and the world economies are relying on us to get things going again and the shift has gone away from consumer to saver. How long this will last? No telling, because we are all creatures of habits good and bad. I can only hope that when this happens again, it’ll be less severe. Now interesting enough, there is a lot of talk about foreign currency reserves dropping the greenback. Although this will not happen overnight, because of the high fluctuations of the dollar and the desire of foreign currency reserves to have a less volatile and stronger currency, I can easily see the dollar being dumped slowly. This will not be good for any of us and easier for our debt holders to call back on that huge deficit of ours, possibly dropping our credit rating. Like citizens, like country?
Regarding savings rates, I believe that the interest rates on savings accounts and CD’s in other countries are far better and gives much more incentive to save for that rainy day compared to here in the US.
January 19th, 2010 at 1:47 am
Dont bet on any part of the world having to rely on the US to use its goods. China and India each have a billion, and their economies are on the way up. They will have an explosion of the new emerging “middle class”, and that middle class will want what we want here in the US. The data doesnt lie. China just passed up the US as the #1 purchasers of automobiles. How fast will that number grow in 10, 20 and 30 yrs as more and more Chinese can afford to buy cars ?
June 28th, 2010 at 2:00 pm
[...] Not true. Capital formation is high in China (as high as 50% according to this report in 2007)* and India (savings rate of about 25-30%, with 29.2% in 2004-5 ). Both are highly unequal societies (India more so than China) where households save a far greater percentage of their income than in America (about 2%). [...]
July 10th, 2010 at 2:55 pm
[...] US Savings rate compared with other industrialized countries: [...]