Quildavyr
Man of sick jokes!
I would say,yes 
Americans: Jesus saves !! (Why don't you?)
- Thread starter Rik Meleet
- Start date
Shadylookin
master debater
I don't save because I'm expecting massive hyperinflation any time now
I actually have about 8k in savings a good chunk of it came from saving up money my relatives would give me for holidays/birthday and spare change. While other kids would blow theirs on stupid stuff I saved it all up. Once my CD is up I plan on putting that money into a mutual fund of some sort not sure what's good though.
I actually have about 8k in savings a good chunk of it came from saving up money my relatives would give me for holidays/birthday and spare change. While other kids would blow theirs on stupid stuff I saved it all up. Once my CD is up I plan on putting that money into a mutual fund of some sort not sure what's good though.
betazed
Seeking...
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Rik,
Of the numerous reasons why the savings rate (however it is computed) has gone down the most important one is that Americans (as almost every one else in the world) has come to expect more of life in general and pay for it by the same earnings that they may obtain from a 40 hour work week.
Admittedly, owing to productivity gains a 40 hour work week does pay more (in real terms) than it did say 40 years ago. But the average expectation of what is a good life has far exceeded that productivity gain in 40 years.
So you spend a bigger proportion of your earnings today just to be an ordinary guy than you did before.
Perhaps this article today in the Washington Post will clarify more.
Of the numerous reasons why the savings rate (however it is computed) has gone down the most important one is that Americans (as almost every one else in the world) has come to expect more of life in general and pay for it by the same earnings that they may obtain from a 40 hour work week.
Admittedly, owing to productivity gains a 40 hour work week does pay more (in real terms) than it did say 40 years ago. But the average expectation of what is a good life has far exceeded that productivity gain in 40 years.
So you spend a bigger proportion of your earnings today just to be an ordinary guy than you did before.
Perhaps this article today in the Washington Post will clarify more.
Masquerouge
Deity
betazed
Seeking...
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- May 9, 2003
- Messages
- 5,224
[off topic]
Thx. Nice to see that nothing much has changed on CFC during the time I was gone.
We still have a global warming thread, the babe thread and a thread on a physics question all on the first page.
[/off topic]
Hey! You're back!
Thx. Nice to see that nothing much has changed on CFC during the time I was gone.
We still have a global warming thread, the babe thread and a thread on a physics question all on the first page.
[/off topic]
In the short term, the Bush administration has horribly punished savers and investors with his policies, the utility of investing in USD was lower than spending USD. As well, the wrong message got out about how to spend money (just that spending money was 'good for the economy').
Saving money IS really good for the economy, because if you're saving money then you're probably trying to invest it wisely (or you're giving it to someone who's investing. Spending money wisely is also good for the economy. Spending it foolishly is almost the broken window fallacy, and is not very good for the economy at all (unless you're giving it to a wise spender)
Saving money IS really good for the economy, because if you're saving money then you're probably trying to invest it wisely (or you're giving it to someone who's investing. Spending money wisely is also good for the economy. Spending it foolishly is almost the broken window fallacy, and is not very good for the economy at all (unless you're giving it to a wise spender)
betazed
Seeking...
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Not quite.
Saving your money is maybe good for some economy even if it is spent and invested wisely; not necessarily your economy. e.g. say you are a Chinese citizen. You save your money and put it in a national bank. The government takes that money and invests it in US T-bills (the best investment at that point in time) to fund the US federal deficit.
It is good for the US economy - maybe {if the US government takes that money and spends it in a war then it is not good for them either}. It is good for Chinese foreign policy -maybe {if Chinese sovereign wealth funds can buy US assets at some time with it}.
But it is definitely bad for Chinese economy.
There are lots of nuances that you have to take care of in economics. Hence it is an art and not a science!
aelf
Ashen One
Not quite.
Saving your money is maybe good for some economy even if it is spent and invested wisely; not necessarily your economy. e.g. say you are a Chinese citizen. You save your money and put it in a national bank. The government takes that money and invests it in US T-bills (the best investment at that point in time) to fund the US federal deficit.
It is good for the US economy - maybe {if the US government takes that money and spends it in a war then it is not good for them either}. It is good for Chinese foreign policy -maybe {if Chinese sovereign wealth funds can buy US assets at some time with it}.
But it is definitely bad for Chinese economy.
There are lots of nuances that you have to take care of in economics. Hence it is an art and not a science!
The problem is what you're spending on. Chances are, a lot of the (consumer) goods you are buying are imported from countries that have a real advantage in producing them. To use the China example, the US is suffering a massive BOP loss to China. The latter can then use its dollar reserves to manipulate the exchange rate. A healthy export market is good for the Chinese economy. On the other hand, it strengthens US dependence on Chinese imports, which would increase the US' BOP deficit... One wonders how long this cycle could go on before something bad happens to the US economy.
On that note, this is another nuance to consider: a current account BOP deficit is not good, while a capital account deficit can be good. If you save, chances are your money is going to be invested or used to buy capital goods (also an investment), which are likely to encourage economic growth in the long run.
I totally get what you're saying. I was mostly talking about the American economy. [more pedantic] Though I think it's very possible to save & invest in China, to China's benefit. Any USD investment is available to be spun into a local business, as soon as a good one rears its head. And it's better to have more USD available, than less. China is chock full of opportunity if you have money.[/] Though I know what you mean, it's perfectly easy for an (say) African warlord to stripmine his economy and build a nest egg elsewhere.
Purchasing goods from countries that have a real advantage producing them is a great idea, as long as the purchases are wise. If the good is an actual asset (i.e., appreciates over time, holds its value, or generates income) then it is very much in everyone's interest that it be purchased by you.
The real problem with the trade imbalance with China is that we purchase too many non-assets (or even liabilities). They're paying the ecological cost, and we're having our purchasing power diluted.
aelf
Ashen One
Yup. That is why a current account deficit is generally a bad thing. I believe you are refering to the capital account.
It doesn't mean you can't ever have a current account deficit, though. I read an article (maybe from the Economist) that postulates that having a larger share of capital account deficit in your BOP deficit might cover the costs of a current account deficit because of the growth potential it brings to the economy.
GenMarshall
High Elven ISB Capt & Ghost Agent
I guess it's time to demand more raises in our paycheck!
The US is the safest debtor in the world, but who knows. You'd have to ask JerichoHill.
Ecofarm
Deity
See signature.
Welcome back Betazed.[off topic]
Thx. Nice to see that nothing much has changed on CFC during the time I was gone.
We still have a global warming thread, the babe thread and a thread on a physics question all on the first page.
[/off topic]
Maybe Gothmog will show too!
Americans have been trained by TV and retailers to be impulse buyers and ignore consequences that are not immediate. Saving takes effort and discipline and we are not so good at either.
FriendlyFire
Codex WMDicanious
Chazumi
No debt except for mortgage.
How much left on the mortgage mate ? I would have thought all your money would be placed as extra repayments in order to reduce the interest payments. Though your lucky in a way that US interest rates are 2.25% our are 7.25% here
Way too much generalization about Americans here, as per usual. I for one save well over 70% of my gross pay, and invest fairly aggressively. I'm very thrifty; I've had the same (fully paid for since I got it) small car for a decade, I buy about 2 or 3 'outifts' of clothing a year, and I drive as little as possible. Etc. For me, it's all about long term. I dare say that no European on this board is as efficient with their finances, as I am. I.e., how much you are paid -- and how far you can make it go / grow.
But, these stereotypes are always entertaining.
But, these stereotypes are always entertaining.
aelf
Ashen One
Maybe checking the current account debt would help. IIRC, America beats any developed country.
Yeah, any time people bash the U.S. for it's debt, you inevitably have some honest German (or others) step forward, and point out that percentage-wise, the U.S. actually has significantly less debt than they do.
IIRC, Japan is the worst. It's almost hard to understand how they're able to sustain that level of debt without some kind of collapse. The gov't there has a heavy hand in managing it closely. But still, it's something like 1/4 of the total world GDP, I think. Percentage wise, there's no comparison to the U.S. numbers. America just has large numbers, so it 'seems spooky'. But like anything else, it's all relative.
