Americans spending their financial cushion
In the two years up to September, 2010, Americans have dipped deeper into their savings than at any point in the past six decades. That’s helping the economy now, but could leave it less prepared to withstand shocks in the future.
Americans withdrew a net $311 billion — or about 1.4% of their disposable income — from their savings and investment accounts, according to the Federal Reserve.
People are acting exactly as policy makers want, at least in the short term. By holding interest rates near zero, the Fed is creating an incentive to spend rather than save — or to “save” in a different way by paying down expensive debt.
One recent poll found that only 35% of Americans had enough emergency savings to cover three months of living expenses. The less money they have for a rainy day, the more vulnerable they will be to job losses and other income shocks.
About Post Author
Holte Ender
More Stories
Parlez-vous and Red Roses Too
Roses are a girl’s best friend, or so I’ve been told; at the same time, wondering why I wasn’t my...
Living In A Dead Man’s Town
The following contains extremely violent images some may find distressing. This is Part One of my anthology—you can find Part...
Sacred and Profane: The Complexity of Prison Spirituality
I’ve watched this unfold repeatedly, and I'm struck by the theater of it all each time. The inmates walk into...
MMA Is Saying Goodbye To Politics and Hello To People and Pets
Just in time for Christmas, I am changing our format from politics to just people and pets. Life is too...
The Best Tips On Interviewing Someone for a Job
One of the most essential elements of a recruiting process is to conduct interviews to choose the right candidates.
WTF? Loony Pat Robertson Leads Viewers In Creepy Prayer Against Dr. Ford
https://youtu.be/oyGx40KKO14 by Michael John Scott Loopy Pat Robertson is at the top of the list when you thought you've seen...
Americans have gotten into their disposable income only 1.4 percent?? Are you sure that number is right? I would think that it would be a LOT higher.
Somehow, WallStreet got into my disposable “retirement” income to the tune of about 78 percent. And I had the portfolio in a very conservative investment mode. I don’t believe that I’m the only one either.
The unfortunate fact is that WallStreet is a game that is rigged to benefit just a few super large investment banks and groups.
Anybody that believes different are fooling themselves.
Computers doing flash trading in milliseconds, offline hedges, exclusive short-sell groups, etc. Billions made in the churning and mixing of other peoples money with the gains eagerly divided up to the few and the losses passed to the American taxpayers.
My retirement plan?? Anybody know what body parts are going for these days? Somethings, I got 2 of so I figure….
That 1.4% number refers to savings and what people have taken, by choice, out of their retirement funds, I got it from the WSJ. You lost 78%. We lost almost 50% thanks to Wall Street which was not by any choice of mine, nor anybody else like you or I I’m sure.
Too bad our idiot elected officials of both parties don’t acknowledge this. If we cut govt spending we force the private sector deeper into debt,or shrink the economy further and increase the deficit.did you see who Obama picked to lead efforts to build jobs? Guy who worked to outsource US jobs by taking chinese bids over same amount US mfg bids,sold technology to China and took 16 billlion bailout$ using his business to mask financial shenanigans.We need to stop blaming Republicans-it’s both parties screwing us equally.
Trophy Husband and I are surprised at 35%… we thought it would be less. As for those expensive interest rates, try telling credit card companies, the ones charging 15%-30% interest, that you’re not sure if you can pay off the balance. Then, point out the prevailing interest rate and reiterate that you may not be able to pay the debt. Sometimes, creditors actually work with you. Rare, but worth a try.
These days, Trophy Hubby and I feel fortunate if we have three months’ of living expenses on our credit cards.
For decades the economy has been driven by consumers willing to take on debt, especially for houses and cars. People have no confidence in the economy and are unwilling to take the plunge into commodities that will turn things around. A total re-structuring of the tax system is the only way forward. Sorry millionaires I think you should contribute a little more to the country that gave you the opportunity to become wealthy in the first place.