According to the U.S. Bureau of Economic Analysis, during the first three months of 2008 Americans saved on average just $2 out of every $1,000 of disposable income (i.e., two-tenths of 1%). That’s the worst savings rate since the government starting tracking it in 1947.
From the WSJ Online (subscription required):
No, don’t spend that “stimulus check” on a flat-screen TV. That money, thanks to the federal deficit, comes from your kids. Do them a favor and save it.
Americans saved during all but the worst years of the Great Depression. They managed to save around 8% of their disposable incomes during the recession of 1982, and even more during the fuel crises of the 1970s.
Here’s the reality: We live in a culture fueled by spending and credit. The Americans who remember the Depression and the days of rationing because of war have long since retired. Workers today have no real concept of scarcity.
The recent “subprime” crisis was caused by too much borrowing. The government’s response: Borrow more and send out “stimulus” checks. Retailers are now trying to entice consumers blow the cash in their stores