Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Thursday, February 01, 2007

Spending is the New Saving

"People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago."

"The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases."

"During the Great Depression when one-fourth of the labor force was without a job, people dipped into savings in an effort to meet the basic necessities of shelter and clothing."

"Economists have put forward various reasons to explain the current lack of savings. These range from a feeling on the part of some people that they do not need to save because of the run-up in their investments such as homes and stock portfolios to an effort by many middle-class wage earners to maintain their current lifestyles even though their wage gains have been depressed by the effects of global competition."

"For December, the savings rate edged down to a negative 1.2 percent, compared to a negative 1 percent in November. The savings rate has been in negative territory for 21 consecutive months."

"The savings rate has been negative for an entire year only four times in history — in 2005 and 2006 and in 1933 and 1932."

4 Comments:

At 2/01/2007 02:01:00 PM , Anonymous tom stone said...

If i didn't believe everything in W's "State of the Union "address,i might be concerned.Thank goodness the republicans are in charge and we don't have to worry about deficit spending,wild foreign adventures or big government! W is Inarguably the greatest American president to take office in this century!!!and will be until '08.

 
At 2/01/2007 05:35:00 PM , Anonymous Anonymous said...

tom,

Gee, if we are lucky maybe there will be an emergency, elections will be cancelled and he'll just stay president!

 
At 2/03/2007 08:10:00 PM , Anonymous realist said...

Like it will make any difference which party is in office, divide and conquer suckers

 
At 2/03/2007 10:24:00 PM , Anonymous TS said...

The U.K has the" monster raving loony" party which would likely attract large numbers from both our major parties if we imported it.

 

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