Retiring Early

Thursday, February 01, 2007

Still not saving enough...

Piggy BankI saw at least one other blogger commenting on this article about Americans not saving enough money, and I expect a few more... It's an interesting article, both from the perspective of "aren't they done studying this yet" as well as the supposed explanations for why we aren't saving enough. Here's my favorite quote:
"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."
Wow. Really? We've all become such good investors that our portfolios are keeping us warm at night? I also don't buy the housing claim, but this idea that depressed wages and maintaining lifestyles is an interesting claim. It may be a bit of a stretch, but it's definitely an interesting point.



  • At 3/08/2007 7:14 AM, Anonymous Anonymous said…

    This is a somewhat perplexing situation, Bernake complains that we need to go to China/Japan to get loan capital...since the US has such poor savings rate.
    Yet, he keeps interest rates at 5%.

    I don't think we really know what's going on with savings (liquid $ in money market/savings versus investments in housing or stock market.)

  • At 3/08/2007 7:17 AM, Blogger fin_indie said…

    Your point is noted, but it somewhat presumes that if interest rates were higher, we'd be saving more. I don't know if that's the reason people aren't saving more.


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