National Savings Rate: American Idiots

[DC Tom]

It's not funny!! It's not funny!!!

 

:wallbash:

 

I want to show that to my wife, but she'd think those are all good ideas.

[We Come In Peace]

I want to show that to my wife, but she'd think those are all good ideas.

:lol:

[Joe Miner]

I want China

 

http://www.youtube.com/watch?v=M1jQFnMFLIM

[TPS]

 

 

Yes, stupidity has a lot to do with it. Didn't know where to put this but this is the best place as any. What I deal with on a regular basis.

Stupidity about financial issues does not explain why the personal savings rate has declined over time. We've been a consumer oriented culture since the end of WW2, it's just that the toys have changed over time.

 

Neither one of those things explains the long term trend.

 

Oh, it was entertaining though.

Edited March 26, 2013 by TPS

[Chef Jim]

Stupidity about financial issues does not explain why the personal savings rate has declined over time. We've been a consumer oriented culture since the end of WW2, it's just that the toys have changed over time.

 

Neither one of those things explains the long term trend.

 

Oh, it was entertaining though.

 

Trust me, I live in the real world and stupidity has a lot to do with it.

[B-Large]

http://research.stlo...ata/PSAVERT.txt

 

Further proof Americans are dumber than we give them credit.

 

I am often surprised when I run into so many retarded Americans with regards to money. I just heard a commercials about a Credit Union that is urging people to switch the credit card balance to a lower rate, to get a lower monthly payment on holiday spending...

[ExiledInIllinois]

 

 

I am often surprised when I run into so many retarded Americans with regards to money. I just heard a commercials about a Credit Union that is urging people to switch the credit card balance to a lower rate, to get a lower monthly payment on holiday spending...

 

EXACTLY!

 

When are people going to STOP spending. Time to come clean, start saving and shut the consumer spending down... People can live with a lot less. You know, I get the funny feeling that a lot of people depend on our culture's stupidity.

[IDBillzFan]

Stupidity about financial issues does not explain why the personal savings rate has declined over time. We've been a consumer oriented culture since the end of WW2, it's just that the toys have changed over time.

 

Neither one of those things explains the long term trend.

 

Oh, it was entertaining though.

 

It's as simple as this: the average person doesn't save as much these days because they choose not to.

[Magox]

It's a problem. Wages are stagnating and people are spending at the expense of their savings. This isn't rocket science, If you have wages that are stagnating, and the cost of living is increasing, and combine that with increased spending at the expense of piling on of additional credit and exhaustion of savings, then you have a long-term problem. As TPS pointed out, the downturn did alter consumer behavior, and we began to save a little more as a nation, which was a good thing. Those savings have helped spur the spending we are seeing today, and yeah 401k's and stocks are going up, so that is helping fuel consumer sentiment as well, at the moment, but we all know that this run isn't sustainable.

[B-Large]

EXACTLY!

 

When are people going to STOP spending. Time to come clean, start saving and shut the consumer spending down... People can live with a lot less. You know, I get the funny feeling that a lot of people depend on our culture's stupidity.

 

Its why most Americans don't identify with the Govt Spending and Public Debt issue in this country. They keep hearing Medicare, SS will not be touched, ever, and they associated that with their own lives and that there don't have to be tough choices to be made.... its makes sense when you think about it, most Amercians do not fear debt, they relish it- and those who don't relish it at least see it preferable to say "no" to wingin out the Discover Card...

 

My in-laws are always cryig that the have no money, they can't retire.. boo-hoo, whoa is them.... but they just bought a $2,000 headboard for their bed.. not in cash either, bet you... not only is that something no one needs, their son-in-law builds custom furniture and would have done it for materials costs... you talk about !@#$ing stupid... sheesh...

 

It's a problem. Wages are stagnating and people are spending at the expense of their savings. This isn't rocket science, If you have wages that are stagnating, and the cost of living is increasing, and combine that with increased spending at the expense of piling on of additional credit and exhaustion of savings, then you have a long-term problem. As TPS pointed out, the downturn did alter consumer behavior, and we began to save a little more as a nation, which was a good thing. Those savings have helped spur the spending we are seeing today, and yeah 401k's and stocks are going up, so that is helping fuel consumer sentiment as well, at the moment, but we all know that this run isn't sustainable.

 

I can go into almost any American household, organize their expenses (they don't do it themselves, guaranteed) and cut 20-30% wihtout them starving or bleeding out of their eyes... ohm there would be bitching and screaming about not being able to watch Honey Boo-Boo and craking up that stove and oven, but I'll bet I could do it, easily, if not cut more...

 

You may be asking, "Does B think he knows what is best for others?"

 

The answer: Yes, yes I do...

[peterpan]

There are more things people demand these days and our standard of living hasnt increased accordingly. Ditch the cell phone and cable TV and Internet (they didnt even exist a few years ago) and thats 200 bucks a month, or 2400 a year.

 

Thats 4% of a 60k salary. Add that to what people are saving today and its closer to historical averages.

[ExiledInIllinois]

There are more things people demand these days and our standard of living hasnt increased accordingly. Ditch the cell phone and cable TV and Internet (they didnt even exist a few years ago) and thats 200 bucks a month, or 2400 a year.

 

Thats 4% of a 60k salary. Add that to what people are saving today and its closer to historical averages.

 

That is what I was getting @. There are so many things that can be cut out.

 

But... I suppose you can cut out the landline phone... People don't buy newspapers like they used to... Make those stuff up w/the new tech.

[boyst]

Well, what about folks like me? Not a millionaire by any means but I am spending now more easily then I was in the 90's? Many many things are more affordable right now, especially high dollar and rare items. You can buy 1-ton trucks for just a tiny bit more then fancy girlie ones. You can get so much better value right now it is not even funny.

[Magox]

You can buy 1-ton trucks for just a tiny bit more then fancy girlie ones. You can get so much better value right now it is not even funny.

 

It's a demand issue, back when gas prices weren't quite as high, people wanted the big trucks, now that prices are higher, not so much.

[dayman]

It's a demand issue, back when gas prices weren't quite as high, people wanted the big trucks, now that prices are higher, not so much.

 

Well the general point that you can get very nice cars for reasonable end prices is true...the quality of affordable cars is up...

[Chef Jim]

 

 

That is what I was getting @. There are so many things that can be cut out.

 

But... I suppose you can cut out the landline phone... People don't buy newspapers like they used to... Make those stuff up w/the new tech.

 

Dumped the landline a year or so ago and cable a couple of months ago. Don't miss it at all. Didn't even miss the super bowl.

[4merper4mer]

 

 

 

 

I can go into almost any American household, organize their expenses (they don't do it themselves, guaranteed) and cut 20-30% wihtout them starving or bleeding out of their eyes... ohm there would be bitching and screaming about not being able to watch Honey Boo-Boo and craking up that stove and oven, but I'll bet I could do it, easily, if not cut more...

 

You may be asking, "Does B think he knows what is best for others?"

 

The answer: Yes, yes I do...

 

What percentage of the average Americans expenses to taxes comprise? How about cutting that too?

[Chef Jim]

 

 

What percentage of the average Americans expenses to taxes comprise? How about cutting that too?

 

Hey now that's a !@#$ing brilliant idea!

[ICanSleepWhenI'mDead]

I find it easier to spot trends when looking at a graph rather than a table:

 

http://research.stlouisfed.org/fred2/data/PSAVERT_Max_630_378.png

 

I also have a few questions about the methodology for calculating "PSAVERT." A minor quibble is that the data is "seasonally adjusted." I don't like data sets that have been adjusted in ways that aren't necessarily obvious.

 

A bigger issue is what counts as savings? For example, do principal payments on a mortgage count as savings when calculating PSAVERT? Not obvious to me, but here's one site that says yes:

 

http://seekingalpha.com/article/48742-what-does-the-personal-savings-rate-tell-us-about-the-economy

 

Same site also says that 401k contributions count as savings, which seems like it ought to be the right result, but its not immediately obvious to me that the government calculates the PSAVERT number that way.

 

I'm leery of projecting my preconceived notions of what's happening to societal savings rates onto this data set. It's a shame, because it makes the rant I'd like to go on intellectually dishonest.

[Dean Cain]

I find it easier to spot trends when looking at a graph rather than a table:

 

http://research.stlouisfed.org/fred2/data/PSAVERT_Max_630_378.png

 

I also have a few questions about the methodology for calculating "PSAVERT." A minor quibble is that the data is "seasonally adjusted." I don't like data sets that have been adjusted in ways that aren't necessarily obvious.

 

A bigger issue is what counts as savings? For example, do principal payments on a mortgage count as savings when calculating PSAVERT? Not obvious to me, but here's one site that says yes:

 

http://seekingalpha.com/article/48742-what-does-the-personal-savings-rate-tell-us-about-the-economy

 

Same site also says that 401k contributions count as savings, which seems like it ought to be the right result, but its not immediately obvious to me that the government calculates the PSAVERT number that way.

 

I'm leery of projecting my preconceived notions of what's happening to societal savings rates onto this data set. It's a shame, because it makes the rant I'd like to go on intellectually dishonest.

 

Read this from San Fran Federal Reserve Bank.

 

http://www.frbsf.org/education/activities/drecon/2005/0508.html

 

Cliff notes:

 

As previously mentioned, national saving is comprised of two subparts: public (government) and private saving. Government saving is the difference between government receipts and government expenditures. Private saving is the difference between income and outlays of the private sector. Private saving can be further disaggregated into saving by individuals (personal saving) and saving by firms (retained corporate earnings).

 

Since IRA and 401(k) contributions are not part of personal outlays (and, therefore, must be included in the difference between personal income and personal outlays), these contributions are included in national saving computations.