Can't imagine why no one is saving $$$$. By the way, today Kraft Foods announced it was cutting 8000 jobs, in addition to the 1,500 it cut last year. More than 3 million jobs lost since Bush took office. Kinda hard to save big bucks from those unemployment checks. Not to mention we have a President who gives tax cuts to companies who outsource American jobs.

Rubepublican morality has infected the entire country. Borrow borrow borrow, don't think about tomorrow. Me me me, to hell with the community. I want, therefore I spend.

We've got war, gawd, $300 tax cuts, and big payments on SUV's. What else do we need?

No savings? WTF did all those people spend their $300 on?

I'm a financial advisor, and I'll be the first to say that Americans aren't saving nearly enough.

But the computation of the savings rate leaves a lot to be desired, too. It doesn't count capital investment, or company-matched contributions to retirement plans. That is a huge portion of people's savings, right there--in income-producing real estate, corporate investment, and contributions to 401k's, SEP's, SIMPLE's, and pension funds. The formula basically adds up companies' and individuals' bank savings accounts, and nets out government deficit spending. Well, with interest rates at historic lows, investors have been looking for alternatives that pay more than 2.5%.

And, were the savings rate the bellweather predictor many think, Japan's economy wouldn't have been in the crapper for the past 15 years--they have, by far, the highest savings rates in the world. Hasn't helped them.

So, every time a company buys back stock, retires bonds, or an individual buys an apartment building--doesn't add to the savings rate. But it should, IMO.

Me me me, to hell with the community. I want, therefore I spend.

----

That's been the American moto for decades.

On 9-15-01 Bushling instructed us to go shopping. Thus we do. I don't see the problem. We're fighting terriesters.

RisR

Good point. With interest rates so low, why would anyone want to put their money into a savings account when there are so many other options to save and gain more. Found it interesting where you said that pensions, 401K's, etc. were NOT counted as savings. Learn something every day.

RIR,

Agree re: savings rates, though I'm lost about why individual saving rates should be affected by corporate buybacks. Re: Japan, most of their trouble came not from the savings rate, but rather the overvaluing of real estate and the reluctance of the banking industry to reform, update, and write off massive bad loans, due to their overly deferential mode of doing business.

or an individual buys an apartment building

This is living in the world of American reality I tell ya. Dam it all, I missed out on that apartment building with 35 units.

Yep, the life and money of most Americans.

Wait a second, CC,

Individuals' contributions to the plans are considered savings, but companies' contributions are not. For example, if you contribute $2000 a year to your 401k and your employer matches that with another $2000, your contribution is counted, but the employers' is not.

Same goes with SEP's and SIMPLE's, where the employer contribution is usually much higher.

Agree re: savings rates, though I'm lost about why individual saving rates should be affected by corporate buybacks.

* * * *
I'm not arguing that it should. But the model assumes that the companies have just spent all their cash, when it's not true--they are buying back their own equity, or paying off debt in the form of retirement of bonds. That translates to savings down the road, as well as today, and also higher income later.

This is living in the world of American reality I tell ya. Dam it all, I missed out on that apartment building with 35 units.

Yep, the life and money of most Americans.

* * * *
OK, how about when you pay down your credit card? Or accelerate your mortgage payments? That's still adding to your net worth, but doesn't add to your savings rate. Fact is, bank deposits are easy to calculate by the fed, because most of them are insured up to $100,000, and so banks report their deposits daily. Repayment of principal on credit cards, revolving accounts, and mortgages aren't so easy to get numbers for.

All I'm saying is that you have to read these statistics very carefully.

But the model assumes that the companies have just spent all their cash, when it's not true--they are buying back their own equity, or paying off debt in the form of retirement of bonds. That translates to savings down the road, as well as today, and also higher income later.

They are spending money not saving it and it has an ability or potential to translate into savings or higher income which to a corporation these are both the same.

RIR,

OK, how about when you pay down your credit card? Or accelerate your mortgage payments? That's still adding to your net worth, but doesn't add to your savings rate.

It does not add to your net worth unless it is finite. For example, if 10 years ago I bought 100 shares of enron by your terms I would be adding to my net worth -VS- the same money is savings.

No, if you have a $1000 balance on your credit card, and you use your income to pay it down to $200, it still adds to your net worth in the same way it would if you were to open a savings account for $800. But the statistics miss that.

Moneywar is seriously confused. Corporations are swimming in money from profits squeezed out of US working poor & chinese slave labor, with the help of crooked lobbyists and politicians. This is exactly the situation in Europe when the US declared its independence and made debtors prisons illegal as well as the basis for our labor movement juxtaposed to our asphalt jungle and depression.

Moneywar chose a priceless example~what if you bought ENRON stock! That Royal Scam would have wiped you out!

No it doesn't, it give a net savings of debt of $800.00.

You are trying to say that if I get a new credit card and get a 3000 dollar limit it is a net savings of $3000. No, to use it creates debt. While if I have 3000 dollars in savings to use it I still have no debt.

One of the key indicators of wealth is a person's equity in their home. Thanks to the low low low interest rates, most Americans have cashed out and spent THAT money, as well. Hoping for better days, I would imagine.

Well, once the bills start coming due, BushCo will probably be living in Arabia or somewhere. A lot of money is being made, and none of it invested in the future.

The Republifundes gave away our country's future over a belief in a failed economic policy and a $300 check. Congrats.

No, try to follow me here.

You have a credit card with a $1000 balance, and you've just gotten $500 from your job. You could put it into the bank, which would increase the savings rate. But if you paid off half of the credit card, which is smarter, it would NOT show up in the savings rate.

Bay,

Moneywar is seriously confused. Corporations are swimming in money from profits squeezed out of US working poor & chinese slave labor, with the help of crooked lobbyists and politicians.

I am not confused you are. Corporations profits are not to be confused with personal savings, they are not the same. But that is the problem, most think it is.

Corporate cash increases stock dividends but does not contribute to savings until it becomes money. Assets are not savings.

RIR,

I followed you but you failed to follow me. Yes, paying down the credit debt is smarter but then there was no savings just debt payoff.

Savings refers to cash without debt so paying off the card to reduce the interest still does not contribute to his savings. It contributes to less debt payout.

But it also results in lower interest expense, which means more income later.

Bayviking is right, but not for the right reasons. Corporations' cash levels are the highest in history, and 2003 and 2004 saw the highest levels of corporate debt buyback in history.

That's one reason interest rates have stayed so low, despite heavy government borrowing--corporate demand is near zero.

Rightsright,
You may be right in your assessment on 401K and other retirement packages.
How many American workers do you think have that type of retirement plan?
3%? 10%?
Just curious?
And what about the unemployed, or minimum wage workers?
It is easy for a guy like to to talk about sunny futures, but there is a vast population of people in the US that don't have the same opportunity that you have.

Bay,

The corporations are swimming in money because they have traded their corporate capital assets in for cash. This is the problem with america right now.

In America, only about 48% of all companies offer a 401K package and only about 2/3rds of the people contribute. Most people don't get in because they can't make ends meet.

No need to save. Hillary will be in power soon. Democrats will take care of us from cradle to grave. Just ask Ted K.
They will tell us what to do, how to live and where to go and how to thank them.

The problem here is people have no cash savings. Using the value of increase in ones home is not savings because in order to get this money for spending one either takes on debt or sells the asset.

In September and October 1998, the personal savings rate for Americans (consisting of contributions to individual savings accounts as well as employer and personal contributions to 401K, IRA, and similar pension plans) dipped below zero for the first time since the Great Depression. For the entire year of 1998, personal savings totaled just 0.5% of personal disposable income. The figure shows that last year's rate is merely the latest step in the decline in a savings rate that averaged 7.6% in the 1960s, 8.2% in the 1970s, 6.7% in the 1980s, and 4.8% in 1990-94, before eventually dropping to 2.2% in 1997.

There is broad disagreement among economists over the causes for this trend and its potential impacts on the economy. But regardless of the causes, the savings decline means that households have increasingly less prepared for dealing with unforeseen events such as the loss of a job, a reduction in work hours, or a rise in interest rates.

I don't have a dime in a 'traditional' savings account... they're crap.. you put money in the bank they give you 2% and turn around and loan it back for 6%-21%.

I have a an emergency account with 1500 the rest of my savings are in my 401k and another 3 months worth of mort and living expenses are in a low yield money market account that lets me write checks, everything else is not liquid..

I buy used cars and pay cash for them, i have no credit cards, store cards etc...

The only payment i have is my house payment... and that should be gone in about 6 years...

bankers do not like me!!!

This give a little detail as to what is going on and why savings for corporations are up and why they are down for Individuals.

1. Profits are up, but the wages and the incomes of average Americans are down.

* Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivity--the growth of the economic pie--is up by 13.5%. 1

* Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods. 2

* Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389. 3

I cannot imagine how anyone can see this as a good thing. It is moving the country into the wrong direction. The simple fact of hearing about just before the great depression is not by accident.

2. More and more people are deeper and deeper in debt.

* The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years. 4

* The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago. 5

* The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%. 6

* The personal savings rate is negative for the first time since WWII. 7

RIR,

* The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%. 6

And this is the very idea you think is a good thing.

Moneywar,

I've been reading over the thread, and I've got to agree with RIR. If paying off $800 on a credit card doesn't increase your net worth by exactly $800, you're calculating net worth incorrectly.

I'm lost on your point with the $3000 debit card.

The links show data 7 years old, most recently from the 4th quarter 1998. Any newer stuff?

RIR,

"how about when you pay down your credit card? Or accelerate your mortgage payments? That's still adding to your net worth, but doesn't add to your savings rate."

But stats have shown folks are going deeper and deeper into debt, not the other way around.

Also, aren't these numbers personal savings only, i.e., not influenced by corporate expenditures, buybacks, etc? Are you & Money looking at the same data? Sorry if I'm dense.

The Republican right always look at the high end corporate profit but refuse to look at the real world and that is the American citizen.

3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession). Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%. 8
The unemployment rate is relatively low at 5%, but still higher than the 4% in 2000. Plus, the percent of the population that has a job has never recovered since the recession and is still 1.3% lower than in March 2001. If the employment rate had returned to pre-recession levels, 3 million more people would be employed. 9
More than 3 million manufacturing jobs have been lost since January 2000. 10
4. Poverty is on the rise.

The poverty rate rose from 11.3% in 2000 to 12.7% in 2004. 11
The number of people living in poverty has increased by 5.4 million since 2000. 12
More children are living in poverty: the child poverty rate increased from 16.2% in 2000 to 17.8% in 2004. 13
5. Rising health care costs are eroding families' already declining income.

Households are spending more on health care. Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003. 14
Employers are cutting back on health insurance. Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000. Taking population growth into account, 11 million more people would have had employer-provided health insurance in 2004 if the coverage rate had remained at the 2000 level. 15

Dan,

We are not talking about net worth, we are talking about savings and they are quite different but RIR does not seem to get this.

Moneywar,

Wow. This new data is eye-opening. It's obvious people have taken on more and more debt with the low interest rates and the subsequent rise in home values. The silver lining, if there is one, is much of this money borrowed at low rates will be repaid with inflated dollars.

Dan,

The links show data 7 years old, most recently from the 4th quarter 1998. Any newer stuff?

I was just posting the chart because it visually shows what is going on. If you continued the chart till the present it just continues down smaller and smaller and now it is below the zero line.

Individual America is in the hole as far as money is concerned.

Money,

I think you and RIR were arguing at cross-purposes. His point was there are some monetary moves, like paying down a high-interest credit card, which do not show up on the "savings" charts.

Geez...more scary info. Thanks for it, Money.

Justsomeguy and moneyway arguing about US savings rates? this is priceless, you guys obviously have NO significant financial education.Get a life.

Is it Gw's fault? That's your idea someguy. GM, Kraft, Worlcom, outsourcing, etc is GW's fault? Wake up, no let me rephrase that, go back to lala land.

Some vague "facts" posted by moneywar are laughable too. Just look around your town, are people hurting? For sale signs all over, soup kitchens packed full, all cars falling apart in dire need of repair, nobody going on vacation, no one able to pay for college, no new home purchases, people lying out in the streets with no money? How about the malls, are they empty, same with Best Buy, circut city, comp USA, Tiffanys, etc. Even Walmart sales are down as people head to more upscale shops. Does that sound like a sick economy. 5% unemployment is not low enough for moneywar? HA go back to lala land. You ARE WAY off base.

This is a very disturbing trend. Last year when the savings rate in September dipped negative, economists blamed Katrina and Auto incentives to lure people into new cars as the reasons for the negative savings rate.

This trend has continued and the effects of Katrina couldn't have been that great on the entire nation, and the massive discounts from the auto makers ended. So now what is the reason people are spending more than they make? Personally I think the root of it lies in energy costs. My home heating bills would have doubled if I did not replace my windows last August and gas is 30% higher than last year.

The continuing negative trend in the savings rate tells me that people are no longer putting luxury items on credit, but now are putting living expenses on credit. This trend is very disturbing.
Very disturbing indeed.

Using debt , to aquire more debt,all with a negative asset value. Damn!

ENRON invented "virtual assets" and Bush liked the idea.

The continuing negative trend in the savings rate tells me that people are no longer putting luxury items on credit, but now are putting living expenses on credit. This trend is very disturbing.
Very disturbing indeed.

Posted by jimmywallback at 2006-01-31 08:21 AM

Jimmy, I think you are right. IMHO this is the most disturbing point of all of this.

I will disagree with a lot of what has been posted here and put this blame on the consumers themselves. I don't necessarily disagree with Moneywar's figures but when you talk about any one household then most of the problems are created when people go out and buy shit they don't need with money they don't have.

"Personal saving is the amount left over from disposable personal income after expenditures on personal consumption, interest, and net current transfer payments. This amount is available to acquire financial assets such as bank deposits and mutual funds, to use towards acquiring a home, or to reduce liabilities by repaying principle on mortgages or consumer debt. "

* * * *
No, that isn't right. And I'm surprised that the Bureau of Economic Analysis doesn't know how to spell "principal".

The savings rate does NOT take into account principal reduction, nor does it factor in employer-sponsored savings.

Americans save far too little. No argument out of me here--I see it every day where people on the cusp of retirement have only $60,000 and they ask me how to stretch it out over 20 years. Impossible. But the savings rate measure leaves much to be desired.

We are not talking about net worth, we are talking about savings and they are quite different but RIR does not seem to get this.

* * * *
I do "get it". Americans' net worth is at an all-time high, at over $50 trillion. I didn't make that point, until now. I'm only saying that the savings rate measure leaves out of the equation much of what Americans consider savings.

I have a lot of money in my 401k. But a lot of that money was put there by my employer, which since has grown. I consider that money saved for the future, but the government doesn't have any of it show up in the savings numbers.

Assets are not savings.

Posted by moneywar at 2006-01-31 12:02 AM | Reply

This man is brilliant. NOT!

"Personal saving is the amount left over from disposable personal income after expenditures on personal consumption, interest, and net current transfer payments. This amount is available to acquire financial assets such as bank deposits and mutual funds, to use towards acquiring a home, or to reduce liabilities by repaying principle on mortgages or consumer debt. "

* * * *
No, that isn't right. And I'm surprised that the Bureau of Economic Analysis doesn't know how to spell "principal".

The savings rate does NOT take into account principal reduction, nor does it factor in employer-sponsored savings.

Americans save far too little. No argument out of me here--I see it every day where people on the cusp of retirement have only $60,000 and they ask me how to stretch it out over 20 years. Impossible. But the savings rate measure leaves much to be desired.

Posted by Rightisright at 2006-01-31 10:12 AM | Reply

Now who am I going to believe, the agency THAT CALCULATES THE SAVINGS RATE or you?

Hmmmmmm. My money would go on the people that actual do the calculation, I would think that they know how they come up with their own numbers.

You are correct in that it does not take into account princpal reduction or employer sponsored savings, because it does not measure those things.

Listen closely, it measures the amount of income left over after monthly expenditures. It does not matter where it goes, it is what is available to save or invest or pay down debt.

I do "get it". Americans' net worth is at an all-time high, at over $50 trillion. I didn't make that point, until now.

I see now Corporate Oligopolies are Americans' now.

Assets are not savings.
Posted by moneywar at 2006-01-31 12:02 AM | Reply

This man is brilliant. NOT!
Posted by dirtman580e at 2006-01-31 10:50 AM | Reply


Assets are any property owned by a person or business. Tangible assets include money, land, buildings, investments, inventory, cars, trucks, boats, or other valuables. Intangibles such as goodwill are also considered to be assets.

Davethe wave,

You are the only one in Lala land. Yes you keep looking out your front window and see that all is grand. I prefer for you to stay this way, anything else as far as actual reality is too much for people like you.

Corporate cash increases stock dividends but does not contribute to savings until it becomes money. Assets are not savings.

Posted by moneywar at 2006-01-31 12:02 AM | Reply

Moneywar is dead on. Booming stocks only help stockholders.

Most americans aren't stockholders, and do not live off of interest or bull markets.

Most americans live off of pay wages which have gone down compared to inflation.

Money war dead on! OMG It's easy I guess you all DID NOT go to businesss school. ASSETS MINUS LIABILITIES EQUALS NET WORTH

I can't believe the shit you post moneywar. I have handled so many estates where the deceased was FILTHY rich from thier property. How can you say their net worth doesn't "count" to thier net worth. Sure ANYTHING can lose value...even CASH and GOLD. Fuck off you douche b*gs

Dave,

Yet again you show such disdain for the topic at hand. Savings. What part of that don't you understand.

Are you trying to say that net worth counts toward their savings? I would like to see more of your thought.

Dave,

I can't believe the shit you post moneywar.

Truth hurts doesn't wave the dave. Get out of the house more and go look around with open eyes and not with the filters you currently have on.

Now who am I going to believe, the agency THAT CALCULATES THE SAVINGS RATE or you?

Hmmmmmm. My money would go on the people that actual do the calculation, I would think that they know how they come up with their own numbers.

* * * *
The BEA doesn't do the calculation. The Commerce Department does.

And, you left out the part where they subtract government borrowing to arrive at their already erroneous savings measure.

Most americans aren't stockholders, and do not live off of interest or bull markets.

* * * *
Hate to sound picky, but every single American with a pension or a 401k or a profit sharing plan or an IRA or a SEP or a SIMPLE or a Keogh or a stock mutual fund IS a stockholder, and DOES live off of interest and bull markets.

And, you left out the part where they subtract government borrowing to arrive at their already erroneous savings measure.

* * * *
What THAT means, is that even if Americans save an additional $40 billion, but combined federal and municipal bond underwritings total $41 billion, you get a negative savings rate. Which is also wrong--most municipal borrowing goes toward capital projects: roads, bridges, highways, sewage systems, schools--that, again, add to the net worth of the country.

RisR

I can't comment as effectively as moneywar so I'll try and keep it brief.

America is increasingly being divided into two classes; for the sake of discussion we'll call them the haves and the have-nots.

Personally I fit in the have not's category so I think I see some things that are a completely different world than what the haves see.

Now I'm not trying to debate why the have not's are have not's if you believe the democrats it's all big business' fault. If you believe the republicans it's the stupidity of the have not's that is to blame. While I will readily admit to having made some dumbass choices in life and blame no one but myself for those choices I have been shat upon by enough employers to see that both sides are somewhat correct.

Let me lay out a scenario for you.

A hard working young man has three kids. He works two jobs to support his wife and children. One job pays a salary of 1400 a month for this salary he works 50+ hours a week takes unlimited abuse from his boss and lives off coffee to keep up with a job that needs to have 3 people doing it but the boss will only hire one cause he knows that one can do it. For his second job he works for a much better boss works about 10 hours a week for an average pay of 20 bucks an hour. Now the second employer would love to have him for more hours a week but simply cannot afford to.

So working 60 hours a week this young father makes a total of $2200 bucks. Now mind you with three children the fed poverty line is 19k so he's not living in poverty, which means that he doesn't qualify for any help. However the full time job charges 800 a month to insure his family which on 2200 a month for 5 people is well out of reach so he and his children have to gamble that young and healthy as they are there will be no major catastrophe.

Now this young father of course does not manage to save anything because on 2200 there simply isn't enough to save. Now he's not running out and buying DVD players or Ipods or any needless things. His wife buys store brand foods to keep a food budget that would make the frugal gourmet drool, yet still no savings. SO he puts everything he can into his house hoping that by the time he retires he will at least have no house payment and maybe just maybe he can live of SSI.

Now tell me this is good for the country?

Now let me tell you that young father is me and I can point to almost every one of my friends who lives in the same situation. Now is having a whole class of people who are hard working fairly smart yet can't afford to save good for the country?

There is something seriously wrong with where our society and our economy is going and if something is not done soon it will reach critical mass.

Like I said I know that some of the blame rest on me however what happened to the American dream that you work hard and can get ahead? That only works when employers do not treat their employees as disposable.

"There is something seriously wrong with where our society and our economy is going and if something is not done soon it will reach critical mass."

Excellent post, Tao. You're exactly right. The middle class is being eroded by a number of factors, the export of our manufacturing jobs, outsourcing of white collar jobs, an increasingly regressive tax system, corporate globalization and free trade, and the dismantling of government programs that once helped working people gain entry into the middle class.

RIR,

Which is also wrong--most municipal borrowing goes toward capital projects: roads, bridges, highways, sewage systems, schools--that, again, add to the net worth of the country.

Yes it does, but it is not SAVINGS. What don't you understand.

I can buy a painting and it will add to my net worth but it is not savings.

Which is also wrong--most municipal borrowing goes toward capital projects: roads, bridges, highways, sewage systems, schools--that, again, add to the net worth of the country.

This is consumption and is a need or necessity, it has a value so therefore creates net worth but it is not savings.

Hate to sound picky, but every single American with a pension or a 401k or a profit sharing plan or an IRA or a SEP or a SIMPLE or a Keogh or a stock mutual fund IS a stockholder, and DOES live off of interest and bull markets.

I have shown you before dork, less than 48% of all companies in America even offer a 401K and to top this off less than 45% of all Americans have a 401K and it is declining every year and more so since Bush has come into power.

United ring a bell, it has scared Americans from investing in 401K's.

Tao,

Nice post, what is truely sad is you are the norm as far as America is concerned.

People like RIR listen to the old neo-classical school of thought that zero savings is good. They don't understand that our global economy has changed the way standards of economic out put is measured.

The economy is great for corporations, it is screamin, the economy is poor for the normal average American and is getting worse by the year. This republican party and most of all our politicians will bury the head in the sand until the populations begins to rise and voice this concern.

If our young generation does not voice their concern soon, the older generation is going to sell the young generation down the river for a good retirement never having a concern for the future after they are gone.

Money

That is part of the reason that I have started educating myself and trying to figure out a way to fix the mess that we are in.

It will get progressivly worse and while I am fighting that up hill battle to economic freedom. Too many of my friends simply do not understand what is happening to them or understand but do not see the way out.

Frankly alot of the blame can be laid at our schools. There is little to no instruction on personal finace there. I mean it's great that they are working on social issues since so many parents seem to fail to teach their children how to behave in society but good manners don't do alot to keep food on the table.

Oh yeah neither job offers a 401k, last job I had that did paid 9 bucks an hour. Try kicking .90 an hour into a 401k when that only leaves you 8.10 to live off.

People like RIR listen to the old neo-classical school of thought that zero savings is good.

* * * *
First of all, there is nowhere in the "neoclassical school" which says that. And neither do I. For the FIFTH TIME NOW, I AGREE THAT AMERICANS AREN'T SAVING ENOUGH!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I'm only saying that the methodology is flawed.

True, the majority of Americans don't have a 401k plan. Most small employers offer a different kind of plan: SIMPLE, SEP, KEOGH, profit-sharing, or a non-qualified plan? Why? Cost of administration and management fees. These types of plans are a lot less expensive. And when the employer contributes on Americans' behalf, it doesn't show up as savings, even though money is being set aside for the future. If that's not SAVINGS, what is?

Fact is, I want Congress to pass a bill that allows any American to be able to tax-deduct $15,000 per year, and add to their investment accounts. Want to get the savings rate up, like me? Fine--make it more tax-efficient to do so.

liberals love to say, Americans aren't saving enough--then they force us to pay taxes on even the lousy 2.5% folks earn at the bank. Back out inflation, and people are LOSING money after taxes and COL. Make it all tax-deductible and tax free. Until you do, don't pretend you care about the savings rate, which you don't understand in the first place.

Bush:"The best way to address the deficit and move toward a balanced budget is to encourage economic growth and to show some spending discipline in Washington DC."

Isn't this just laughable.

RIR,

I will say that the fact that my 25 bucks a year in dividend cost me 5 bucks a year in taxes is pretty retarted.

However tax advantages for the most part will not help folks like me. It's not so much that we don't want to save as we cannot save.

More and more people are slipping into the lower class and once there most find it is near impossible to claw your way back up. Tell me on 2200 a month with a family of 5 how i am going to save anything tax advantages or not?

These types of plans are a lot less expensive. And when the employer contributes on Americans' behalf, it doesn't show up as savings, even though money is being set aside for the future. If that's not SAVINGS, what is?

What is done with this money?

You seem to think I don't understand, which is funny, understanding is knowing that net worth is not savings.

You seem to think being set aside for future is savings. Well, tell that to the United employees who lost more than 60% of the future you want to call savings.

It is consumption with a hope for a net return.

Tao,

More and more people are slipping into the lower class and once there most find it is near impossible to claw your way back up.

Hit this right on the head. As a matter of fact in the United States, when compared with all other OECD nations, the U.S. is the most difficult to get out of poverty. And what is really sad is we are one of the few OECD nations which is growing in poverty not decreasing.

Translation PLEASE MoneyWar OECD

Larry

Tell me on 2200 a month with a family of 5 how i am going to save anything tax advantages or not?

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I know. I wish I had something more clever to say than, "I know", but I don't. For five of the last six years, I was broke most of the time, too. I'm a single dad with four kids at home with me--and it's only recently that I'm able to save anything.

Thanks Moneywar I was trying very hard to wrack my brain but those 2 marbels up there wouldn't work. Thanks again.

Larry

RIR,

actualy it's only the last few years that I have slipped.

Household income has gone from 52k 5 years ago to 22k in '05

This new job was supposed to be my answer as in 3 months I have gotten 2 promotions and am now holding the #2 spot in the company however that doesn't change the fact that he still treats me like crap and pays like crap. Hell he threatened my job last week even though I'm producing 2 x as much as his next best employee (hence the 2 promos in 3 months) Of course at 1400 a month for 50+ hour weeks I just laughed. I mean for an average of 7.39 an hour I can flip burgers without his crap. However laughing at my boss when he's mad would fit into those bad decisions i have made with my life.

Bad decisions. Well, at least I can't say I've made any of those.

Except when I leased a brand new Camaro and had to pay $9900 with borrowed money from my parents to give it back when I joined the Army and couldn't afford the payments. Then I got married. Then divorced. Then married again and bought a big house I couldn't really afford and a new Lexus I for sure couldn't afford and a gigantic diamond ring on borrowed money, just before . . . getting divorced again.

I figure I've spent $5,000 on wedding cake I've never eaten, another $6000 on engagement rings I've never worn, $22,000 on cars I've never driven, and $16,000 on a swimming pool I curse myself for every time the thing needs another $65 in chemicals to keep clean for another month.

So, except for those things, I've made all the right moves, I would say.

RIR,

TMI, it does not lend to helping your side of the argument. It tends to further the idea that you are out of touch with real America.

I like the banter with you because you tend to come from a side or issue I could use more knowledge in.

You see a partial side on how the facts and figures are made.

Americans have imbibed Republican morality. Borrrow now. Our children will pay our bills. Take care of "ME," the right wing pastors will say it's holy. Praise "ME." Save? That's something Mom and Dad admired. Republicans don't do that sort of thing.

RIR,

I'm a member of several of those clubs.

My second wife walked away with EVERY PENNY she earned while we were married.

You have compeletly lost it moneywar. Assets minus liability equals net worth. Did you go to school? that's a real easy one, even for you. Yes Net worth is "Saving" is that a difficult idea for you to grasp.

You are the biggest windbag on the drudge!

So get a grip on what little intelligence you can muster, and look at that simple formula. You take ASSETS (these are things you own) subtract your liabilities (that's what you owe) and the difference is your net worth. If you had alot of "savings" (I trust you mean cash) but owe millions, are you really saving?

You are the biggest wind bag moneywar face it and I plan on slamming you whenever you rant from your blackhole of idiocy.

danforth and right.....well well...here is a bipartisan subject for you...I just checked to make sure the auto dsposit for retirement annuity made it to bank and think about the OUTRAGEOUS AMOUNT that is going to the ex because of texas community property laws.......AAARGGGGG
think of the extra gambling bets I could make......yuk yuk.........

and further proof that the three of us apparently know so much about....the one truth that we all three have regardless of poltical persuassion.....

all those times......we just THOUGHT WE WERE GETTING IT FOR FREE!!!!!!!