2007-11-23 12:29:04 · 6 answers · asked by CD 1 in Social Science ➔ Economics
The US savings rate was about 10% of GDP until 1980. Since then it had undergone a steady decline and is now less that zero. This decline is even more puzzling because conventional wisdom was that high income earners saved a higher percentage of their income, and this group has received an ever increasing share of GDP. One possible explanation is that because of the inflation of asset prices, first in the stock market and then in housing prices, they have been able to increase their wealth without cutting back on consumption, that is savings. Another is that the money spent on education should actually be counted as investment in the future, that is savings, and in most developed countries more of the education cost are paid by the government. If this is the case, it is the government that that accounts for the lack of savings, both by running large deficits, and by not providing educational investments.
OR maybe our newly rich have just gone a spending spree.
2007-11-23 14:50:47 · answer #1 · answered by meg 7 · 1⤊ 0⤋
In order for the economy to run, people need to throw around the dough. If too many folks saved money, there would be depression. The government absolutely loves that its people go out and buy worthless products, keeping the factories churning, trucks running, and everyone employed.
If everyone in the nation didn't spend any money for just one day, businesses would collapse. In fact, many push for this day after thanksgiving to not buy anything-
http://www.adbusters.org/metas/eco/bnd/
2007-11-23 13:01:40 · answer #2 · answered by Bugmän 4 · 0⤊ 1⤋
because the government taxes us to damm much, houses are so expensive, and most folks view the equity in their house as a type of savings. Also people look at their Social Security as a type of savings. After all that, there ain't much left to save.
2007-11-23 12:37:38 · answer #3 · answered by Anonymous · 0⤊ 1⤋
Because Americans are by nature very materialistic....they have to have the latest version of everything and the best. It's not about keeping up with the Jones anymore, it's about leaving them in the dust.
2007-11-23 15:10:54 · answer #4 · answered by Anonymous · 0⤊ 1⤋
That is a statistic. I believe you need to question in comparison to what? If you compare salaries to savings probably we make more so in proportion we save less.
2007-11-23 12:39:13 · answer #5 · answered by Nancy 3 · 1⤊ 0⤋
Because America is largely "Acquisition-centric". American life revolves around having what your neighbor does not. We are also a culture that has been taugh immediate gratifiation is a way of life, so BUY IT, WHY WAIT?!?
(debt, that's why...)
2007-11-23 12:34:24 · answer #6 · answered by videochaz0r 2 · 1⤊ 1⤋