Comments on: Oh no, not that! The savings rate is increasing

By: Mack jackson

Mack jackson — Thu, 16 Jul 2009 05:30:59 +0000

Ya i agree that saving is very much essential for secure future. According to me there are number of chances of unexpected expenses for which we need some emergency fund.

By: Anita

Anita — Sat, 04 Apr 2009 20:45:43 +0000

Saving is the best thing for me and family right now and I feel great whenever I save $$$ and add to our emergency fund… Thanks for the info… Also I distribute this free price comparison and deal finder on the internet… Get your now and start saving on all your purchases… I saved 30% on Locksmith services

By: Roger

Roger — Wed, 11 Mar 2009 04:48:57 +0000

To paraphrase St. Augustine, ‘Lord, make us thrifty… but not yet.’

In other words, I think that Keynes was right; the only way out of a recession is to increase spending, whether by governments, by individuals, or both. Hopefully, this situation will remind people that things can go wrong, and that saving some of the profits you earn is always a good thing.

By: troy

troy — Wed, 11 Mar 2009 04:27:12 +0000

the problem with the “savings rate is increaing” headline is it mistaken belief that it is some how voluntary.

Of course the savings rate is increasing. It has to. The real issue is WHY is the rate increasing.

Since it is due to tougher credit availability on everything from home loans to credit cards and car loans, student loans, etc the WHY becomes the problem.

If society was saving to save that would be great. But society is saving because they have no other choice.

When credit starts being extended again at some point in time, the savings rate will drop back down as fast as it rose.

This is a temporary “savings” bonanza and not a real shift in societys behavior.

By: Vincent

Vincent — Tue, 10 Mar 2009 19:55:22 +0000

Because of this weak Economy, nothing good will come in short term.
I am just wondering how long it will remain like that or if it will go deeper
Good post

By: Jeff@StretchyDollar

Jeff@StretchyDollar — Tue, 10 Mar 2009 15:11:42 +0000

I agree with your point about thrift. It will get the economy through in the long run, but as soon as this thing evens out and gets somewhat back to normal, there are those who will return to their previous spending habits, but if we can remember what we’ve learned through this situation we’ll be better off.

By: David

David — Tue, 10 Mar 2009 14:31:51 +0000

Great article! Savers are getting too much crap from economists and the media.

I know that yes, technically saving will hurt business. But I think it creates a more sustainable economy.

We would not have had the boom economy of the past without overspending and overuse of credit.

Is that what we really want to return to? Look how it turned out.

I agree that saving will be better in the long run. We can’t spend our way out of this. It would be like trying to dig your way out of a hole in the ground.

By: Dana

Dana — Tue, 10 Mar 2009 13:06:55 +0000

The problem is that the system has been set up for the past few decades to accommodate and reward debt instead of savings. It’s not surprising since the US has not produced enough to justify its level of spending, but has instead resorted to consumption to sustain growth.

The article by Drhousingbubble is worth a read.

http://www.doctorhousingbubble.com/banks-save-while-us-consumers-are-expected-to-spend-the-convoluted-problem-of-creating-a-debt-based-consumption-system/

By: Mackenzie

Mackenzie — Tue, 10 Mar 2009 12:32:30 +0000

The problem isn’t really the savings rate, the problem is that it’s changing faster than the economy is able to cope with. In normal times, the rate changes slowly, over a period of years, and the economy is pretty easily able to absorb the change. But when everything changes all at once, it creates all kinds of ripples. Things will be fine in the long term, but there are some growing pains.