Americans’ personal savings rate dipped into negative territory in something that hasn’t happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items. The Commerce Department reported Monday that the savings rate fell into negative territory at minus 0.5 percent, meaning that Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing.
The savings rate has been negative for an entire year only twice before _ in 1932 and 1933 _ two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs.
With employment growth strong now, analysts said that different factors are at play. Americans feel they can spend more, given that the value of their homes, the biggest asset for most families, has been rising sharply in recent years.
Morons… that’s my first thought. And then I stop and think, you know, if we have to invade Iran because the worthless nature of our money is on the verge of becoming apparent to the world, why bother saving it?
After all, you’re going to watch the empire begin to crumble, you might as well do it on a 50-inch flatscreen plasma.
I can’t help but wonder how the I=S crowd explains this. Was there also no investment in 2005?