I live in that pighole of a socialist europe where the government takes 50% of your salary, you don't get to work for your own pockets untill after the summer, and still people over here save more then 10% of their income. What gives? Is it because the FED has run a more inflationary course then the ECB eroding the purchasing power of the dollar causing people to search for alternatives? Or is it the US spirit where people are always on the outlook for the next bubble to grow so they can hop on and become rich overnight? Or is this how capitalism is supposed to work? If you can't cut it bad luck and good night see you in the souplines?
================== DeBe; Well several reasons; First[1st] there is more saving than reported by liars/news media; example,brokerage accounts, derivative accounts, derivative accounts with FDICsweeps[FED bank sweeps]. Besides Solomon said an ant saves for the winters . So some save. Then you have ladies that took $10,ooo out of FED insured bank, & goofed,put in in cracker box, accidently took cracker box to store for refund .......Ouch/pain. Lastly with all due respect to big banks like Citigroup, Lehman Bros, Bear Stearns, Morgan Stanley- they need to advertise savings accounts much more, much more.My dad was a commercial /retail banker & he got plenty of savings account business..........................................................................Cool.
Well most people (probably most of them over 40) will probably say itâs because Americans lead extravagant lifestyles, which may be true for some, but not most, in my opinion. But ask yourself, how much can you save when youâre making $10 an hour and health insurance is hundreds a month. Food and energy prices are continuously going up (until recently). Credit card companies take your interest rate from 8-24% for no reason other than they can and one bedroom apartments in the suburbs that cost $1100 a month. Etc. etc. Then after youâve worked hard and your employer never seems to have any money for a raise even though they are continuously raising their prices. Then people are told that to get ahead, you need to go to college and get an eduaction, which of course is perpetaully costing more as well. So you have to take out student loans, which hinder your ability to save once you graduate. And then it goes on and on like this until now when we have a negative savings rate. I have never been to Europe and donât know much about policies there, but I understand that the government (you the taxpayer) pays for a lot of the things that we pay ourselves in America. I donât see how this could ever be the most efficient way of doing this, but I guess somehow people are able to save more over there. Imagine how much more the US government could give back in tax cuts, repayment of the national debt, or more social programs to help people if we stopped spending nearly $1 trillion (by some estimates) a year on our distorted foreign policy and bloated military spread throughout the whole world for reasons nobody seems to understand. I donât mean to rant here or anything, but you asked a qustion and this is my opinion.
Why don't Americans save? ----------------- Question. Save for what? How much? To do what with? Save up for a house? A car? A vacation? You can buy almost anything you want on credit or low down payment or terms. (Well you could, since we are talking about the past). People have vacation clubs, Christmas clubs, they depend on tax refund checks as a sort of forced savings. How much are you talking here in the way of savings? For retirement? People don't plan for retirement until they are about 50. Basically because they have no money to save because they have been living, the two car, big house and toys lifestyle, that's if they survive a divorce or two. People have paid up life insurance they can borrow from. People sell their house. live off any leftover proceeds and SS when they retire. They downsize and rightly so, they need less. Do you know where savings go? Medical bills, spend it down so you qualify for medicare, a nursing home or long term care if you're sick, and you will be, because something is going to kill ya and take all your savings.
I've written it here before, the reason that Americans spend too much is because of the amount of television that they watch. Look up any statistics for the hours of television and you'll see that Americans watch almost double the amount compared to any other county. Why do Americans watch so much TV? It's because most of the best programs are made for the largest market place, the United States. Other countries are not as interested in American TV because it isn't made for them. I lived in the United States for a while about 20 years ago and that was the biggest difference I noticed, after dinner just about everyone was planted in front of the TV there. The other thing that leads to excess consumption in the United States is that their mortgages are tax deductible. What happens is that as soon as some equity is built up in a home, people use that as a source of extra money to spend. In a round about way, the American government is subsidizing excess consumption with these tax deductions. The amount of money that the United States government has given up for these tax deductions is roughly the same amount that the government is in debt. Consumption is good to build up an economy but when it gets excessive you end up with a trade imbalance. The money sent out of the country eventually has to come back to purchase something from the United States. What's left to purchase? The United States doesn't manufacture much anymore. The only thing of value left in the United States are shares of stock owned by it's citizens. In a round about way, the United States is being defeated in an economic war. Asia has no need to engage in a physical war with the US to take them over, they'll just buy them. I don't think that Asia planned it that way but they will certainly benefit from the situation. They would be wise to keep the price low for all televisions they send over.
what are you saving for..the next life? a newsflash.. you can't take it where you are going you can't drive it, you can't spend it, you can' t taste it! so go save it for .... god? does he need it?
Savings rate among who? I know plenty of people who "Save" or make their money work for them. Savings rate for the Middle Class is negitive because they rather pretend to have money than actually save for item X. Credit was created for the Middle Class and they learned how to abuse it. However, there is a % of the middle class that does save, who do live within their means. However, they are punished when the rest of the idiots outspend their earnings, get into massive debt and we end up with rates close to Zero. So, why Save? Either take risk to increase your return or spend it. The next 20 years, savings account will be worthless as will money markets and Cds. Euro land, your socialist society is in a far worse off position than the US. Your average DEBT for social services, for all those "Perks" as you would say, has created far more DEBT for your nation than what America has accumulated. So, while you save, your saving for what? Your life conditions will be far worse of in the next decade. Dark Ages are returning to Euro land for sure. So, I would say, buy up property, Land. Not Homes. Put your money in hard assets as a savings tool. Then spend it and enjoy it when you reach your level of return that you like.