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2006 personal savings drop to 74-yr. low

Discussion in 'Political Discussion' started by Holy Diver, Feb 1, 2007.

  1. Holy Diver

    Holy Diver Pro Bowl Player

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    WASHINGTON - People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.


    The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.


    Article:
    http://news.yahoo.com/s/ap/20070201/ap_on_bi_go_ec_fi/economy_33
     
  2. Real World

    Real World Moderator Staff Member

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    I'm waiting for people in here to blame the government. I can guarantee you that lots of people in here think this is the fault of someone other than those who spend their earnings irresponsibly. Life is certainly more costly than it was decades ago. There is no doubt about that. The problem is, most people do not sacrafice like years before. What was once a single car per home, is now 5 cars for 5 people. What used to be one or two Tv's per home, is now a TV in every room, plus one in the crapper. Add in Cell phones, XBox for your kids, and $2,000 per kid for gifts at CHRISTmas, and you can see why savings has declined. :D My point is, although the cost of living, IMO, is higher than yesteryear, most people tend to spend irresponsibly.

    Another contributing factor might be retirement accounts & the availability of credit. 30 years ago instant credit wasn't common. Furthermore, the safety of having equity in a home, or invesitng in a retirement fund has possibley contributed to people spending their incomes more freely.
     
  3. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Savings rate aren't the entire story people now are more heavily invested in equities, nad in the US peopel have a lot of their net worth tied up in real estate.
     

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