Today I was wondering why savings rates are said to be lower per capita in the U.S. than most of the other industrialized nations (I've heard the above said and assume it to be true).
So I'm just wondering why might that be? Does it have to do with over consumption of resources meaning having more begets wanting more, or is there another reason as to why which might not be easily as recognized? I would think as one of the richest, if not the richest, nations of world, Americans as individuals could easily save more than any other nation in the world.
Can you shed some insight?
(question not intended as person-specific)
From Neocon's post from the Cato Institute:
"Savings. The savings rate did not rise in the 1980s, as supply-side
advocates had predicted. In fact, in the 1980s the personal savings rate fell from 8 percent to 6.5 percent. [16] In the 1990s the average
savings rate has fallen even further to an average of 4.9 percent
[17]--although the rate of decline has slowed.
The decline in the personal savings rate in the 1980s was disappointing, but two factors mitigate the implications of these statistics. First, the drop in the savings rate was partly a natural response to demographic changes in America--namely, the baby boomers entering their peak spending years. Second, the savings rate data fail to account for real gains in wealth, which clearly are an important form of savings. The real value of capital assets and property doubled from 1980 to 1990. The Dow Jones Industrial Average nearly tripled from a low of 884 in 1982 to 2,509 in 1989. These increases in the value of stocks, bonds, homes, businesses, and so forth added to Americans' balance sheets hundreds of billions of dollars of wealth that are not accounted for in the savings rate statistics. "
(Note: I understand what the above is saying as a substitute for savings, but it doesn't really explain why Americans are more prone to accumulate saving through assets than good 'ol fashion savings accounts especially in light of an aging population). |
