Americans: Jesus saves !! (Why don't you?)

[Rik Meleet]

Because, unlike Europeans, Americans are pretty much all idiots. Unlike Europeans, we don't have any fiscal responsibility. Unlike Europeans, most Americans don't even know how to do simple financial math, because unlike europeans, most Americans are born stupid (from all the chemicals that we have in our food, unlike in Europe), and if they aren't born stupid then we go through our horrible public school system (unlike in Europe, Americans don't care about education). Unlike Europeans, we'd rather eat 20 big macs and drive SUVs all day than save money. Unlike Europeans, we have to pay for EVERYTHING because our fascist government (elected becuase we're all stupid) doesn't give us any social programs. Unlike Europeans, we're tricked into donating our savings to churches anyways, because unlike Europeans, Americans are all stupid sheep who believe they will go to hell if they don't donate to evangelical christian groups. Unlike Europeans, Americans are incapable of appreciating the finer things in life. Unlike Europeans, we don't understand how to have fun if we aren't spending money (and unlike Europeans, when we do spend money, we don't spend it on fine food and art and books, but rather on violent video games and big macs). Unlike Europeans, we're addicted to spending all our money at the gas pump, because unlike Europeans, we're too stupid and lazy to use public transportation. Unlike Europeans, we have no ability to look towards the future, because unlike Europeans we pretty much all believe that the rapture/apocalypse is going to happen very very soon, so we have no reason to save money.

Please don't blame us Rik, we're just a bunch of lazy idiots. We're all so stupid... please teach us your European ways!

As you should know by now I create these threads in order to learn. So please refrain from posting these kind of posts in threads I start. Thank you.

America is the consumer of last resort. Since the dollar is the reserve currency, it is much easier for America to have a low savings rate because everyone else in the world has to hold dollars in reserves to back their currency and they have a supply to lend America. That means a lot of purchasing power is locked away because everyone is holding dollars, and America gets cheap loans in order to make up for the gap. But what happens is that the increasing deficit eventually brings the dollar back down, which is the problem with being a reserve currency. The same thing is starting to happen to the euro, as people hoard reserves of euros...

Some monetarists think it's only a matter of time for the USD to be devalued as a currency (for instance disconnected from the oil-price etc.). Are you saying that, if the monetarists are right, the US will lose the postion you paint and can't afford to "not save" any longer ?
And what other consequences do you see ?

(I'm not educated well in economics so if these questions are silly; that's the reason)

 

[Perfection]

Ummmm, source?

 

[Rik Meleet]

Ummmm, source?

Who are you asking for a source ?

If you ask me for a source of things in post #1, see the spoiler iat the bottom.
If you ask me for my statement in post #21: I didn't get that from an internet source so I can't really provide a source right now.
If you ask someone else, please identify the post that has a statement that you want sourced.

 

[Marsden]

As you should know by now I create these threads in order to learn.

I thought so, too, and I am not an economist, but I tried to demenstrate that one statistic without a more complete picture is of somewhat dubious value. The credit burden I and many other Americans have trumps (overpowers) the desire to save. I also think it's a left over of the Cold War psycology that to save a lot of money in the bank isn't going to help when the missles start flying. Maybe that's out of date thinking but the generations were shaped in that thought pattern.

 

[Rik Meleet]

I thought so, too, and I am not an economist, but I tried to demenstrate that one statistic without a more complete picture is of somewhat dubious value. The credit burden I and many other Americans have trumps (overpowers) the desire to save. I also think it's a left over of the Cold War psycology that to save a lot of money in the bank isn't going to help when the missles start flying. Maybe that's out of date thinking but the generations were shaped in that thought pattern.

The cold war reason sounds unlikely to me. America would just have missiles flying by - Europe would have missiles, planes, tanks and Warsaw-pact soldiers 'flying' by. I think that's far more reason to think the bank isn't going to help at that moment.

About the credit-burden. If one saves befores buying it'll seem to me he won't have a credit burden. Not saving to pay off the credit burden sounds a bit like a self-forfilling prophecy and a self-sustaining money-problem. I find that extremely interesting, but what I am really looking for is the reason why this difference between the USA and other countries exists.

I've been brainstorming and my answer for the cause of this would be more alongst the lines of 'Perhaps the American economic system is set up in such a way that it can't afford leaking too much money out of it via taxes and savings, while other economies are set up in such a way that it can afford this'.

Edit: And please refrain from making comments on the thread title. Create your own thread for that if you want to discuss that but don't spoil this serious info thread. Thank you.
BTW: I removed all none-serious spam-posts.

 

[Perfection]

Who are you asking for a source ?

If you ask me for a source of things in post #1, see the spoiler iat the bottom.

Oh it's in the masque post. Anyways, it doesn't give a link to how it was calculated so the statistic is not very useful. Knowing how this saving rate is calculated is would be a big clue in understanding what it means.

 

[Marsden]

The cold war reason sounds unlikely to me. America would just have missiles flying by - Europe would have missiles, planes, tanks and Warsaw-pact soldiers 'flying' by. I think that's far more reason to think the bank isn't going to help at that moment.

I'll rephrase. Flying missles aren't the problem landing nuclear warheads would be and tanks coming after isn't very threatening when you're a corpse. So I think your comparing being killed to being killed and run over afterwards, rather irrelevant as you'd be dead both ways. But that's just my opinion, so don't misunderstand, it might be a small or insignifcate part. Probably is. Don't take it the wrong way Rik, I'm not trying to be argumentative.

 

[MobBoss]

I think the point is that Americans have many other options for investing their cash than a low interest savings account....many with little or no risk what-so-ever. I mean, you can put your cash into a short term CD and still earn more interest than a savings account would. That, plus a combination of trying to pay down debt is probably the answer to lack of savings account numbers.

And might I suggest in the future, if you do wish to keep your threads serious as a learning tool to give them thread titles that correspond to how serious you wish the discussion to be.

 

[Perfection]

Indeed, I'm not certain that this is just savings accounts (that's Rik's interpretation), but if it is it just demonstrates how useless they are for anything other then a buffer to store a few month's worth cash. That's why I said I want to see how it's calculated earlier. Then we can know WTF the graph actually means before going off on the assumption that Americans have lost fiscal responsibility.

 

[Masquerouge]

Oh it's in the masque post. Anyways, it doesn't give a link to how it was calculated so the statistic is not very useful. Knowing how this saving rate is calculated is would be a big clue in understanding what it means.

I think the point is that Americans have many other options for investing their cash than a low interest savings account....many with little or no risk what-so-ever. I mean, you can put your cash into a short term CD and still earn more interest than a savings account would. That, plus a combination of trying to pay down debt is probably the answer to lack of savings account numbers.

Perf is right, we do not have an idea on how exactly the savings rate is calculated, but I would say that short-term CD, 401(k) and other stock investments should be considered savings.

I guess JH could help us there with what is considered personal savings.

 

[Masquerouge]

Indeed, I'm not certain that this is just savings accounts (that's Rik's interpretation), but if it is it just demonstrates how useless they are for anything other then a buffer to store a few month's worth cash. That's why I said I want to see how it's calculated earlier. Then we can know WTF the graph actually means before going off on the assumption that Americans have lost fiscal responsibility.

I think there is a strong case being made that Americans have lost fiscal responsibility over the past 15 years. Even the Fed says so.
http://www.federalreserve.gov/pubs/feds/2007/200720/index.html



Basically, no matter how it was computed, it's hard to deny that the metric called "personal savings" has constantly gone down since 1992.

 

[Perfection]

Nice try but that's a graph of "Equity Extraction and Personal Savings" not "Fiscal Responsibility"

 

[MobBoss]

Indeed, I'm not certain that this is just savings accounts (that's Rik's interpretation), but if it is it just demonstrates how useless they are for anything other then a buffer to store a few month's worth cash. That's why I said I want to see how it's calculated earlier. Then we can know WTF the graph actually means before going off on the assumption that Americans have lost fiscal responsibility.

Well, while of course anecdotal, I personally keep a couple of grand in the savings account simply for emergencies....like a car breaking down for something not under warrenty or if my hot water heater goes out...stuff like that. But once I feel comfortable with my savings account level, I just leave it alone and put my money into other areas....either investing or paying off additional debt (which I dont really have much of atm).

 

[Masquerouge]

Nice try but that's a graph of "Equity Extraction and Personal Savings" not "Fiscal Responsibility"

True, however what was of interest to me was the line "NIPA Personal savings".

Basically that measure has been calculated the same way for the past 80 years:

http://chickensmith.wordpress.com/2...lions-in-debt-negative-equity-disaster-ahead/

General economic principles state that consumers will save some of their disposable income and spend the rest. A negative savings rate means that U.S. consumers are spending more than 100% of their monthly after-tax disposable income . Other variables aside, the overall decline of personal savings (as has been consistently calculated over the past 80 years) indicates that the percentage of household savings has gone down to zero and is now in negative territory.

And while I'm still searching how the frack that "personal savings" metric is computed, my point was to say that it's down to unusual, and probably worrisome, levels, the likes of which were only seen once, during the Great Depression.

 

[Chazumi]

Chazumi
22 year old American male
Married, 1 Child

Owns 5 TVs, 2 Cars, and a House.

No debt except for mortgage.

Current savings combined with checking account balance: $22,733.12 (as of today)


BOOYAH STATISTICS!!

 

[Masquerouge]

Well. I am surprised:
http://commonlaw.findlaw.com/2007/02/us_has_negative.html

The savings rate from this BEA report is a calculation that takes total disposal income (after taxes) and deducts total spending. Note that this calculation doesn’t include all types of savings (e.g. pensions, 401(k) plans) and doesn't account for changes in household wealth (e.g. increasing value of real estate or other investments).

It does not include all types of savings. So this leaves us with two possible explanations for the recent decrease in the "personal savings" metrics:
- Americans are simply saving less than they used to(spending more than they earn)
- Americans are saving much, much more in 401(k) and pensions since 1992, and thus while the "personal savings" metric is now negative, Americans actually have the same amount of savings and all is well.

I hope my completely biased and sarcastic presentation of the two points will give you a hint as to which one I favor

 

[Chazumi]

I listen to Dave Ramsay all the time on the radio, you should hear the DOUCHEBAGS that call this guy.

"Hi dave! Well let's see, I make 38k a year, I have 90k in credit card debt at 23% interest, I have a 2008 Ford F-350 that costs me 2k a month, I have 3 kids, 120K in student loans, and, I just can't figure out why I'm not making millions!".

I love it, I love to laugh maniacally when these ******s call and they are screwed.

 

[skadistic]

Both!

We do spend more and we save more in other areas.

 

[Quildavyr]

Chazumi
22 year old American male
Married, 1 Child
Owns 5 TVs, 2 Cars, and a House.
No debt except for mortgage.
BOOYAH STATISTICS!!

Quildavyr
22 year old turkish male
Single,still student
Owns a house.
No debt,he has a dad.

On account 12500,00 €


You are better than me I guess...

Spoiler :

Congratulations!

 

[Chazumi]

Quildavyr
22 year old turkish male
Single,still student
Owns a house.
No debt,he has a dad.

On account 12500,00 €


You are better than me I guess...

Spoiler :

Congratulations!

Better than most people! Kidding!

No but seriously I just lucked out and wasn't stupid with my money like most people I see.

For instance: Buddy of mine owes me 161$ since January 2008. Still haven't been paid. He was so broke he had to borrow money to feed his daughter he said. So in the meantime of "I can't feed my family" this happened:

-Wife preganant again
- Bought a 2k HDTV
- Bought a dog (800$ all together)
- Dog got sick, spent 1400$ in 3 days all on credit to try to cure the dog.

This guy has good genes huh?