Reply #21: Spendthrift nation

[leftchick]

http://news.yahoo.com/s/csm/20050803/ts_csm/asavings;_


NEW YORK - Americans have stopped saving for a rainy day.
Instead, they are living paycheck to paycheck, depending on credit cards to get them through emergencies, and hoping that the rising value of their homes will give them a retirement nest egg.

This personal economic chasm is showing up in the national savings rate, which has been declining for years. Tuesday, the Commerce Department reported that the personal savings rate fell to zero in June, the lowest since a one-month buying binge in the aftermath of the 9/11 attacks. The United States is on track to record a savings rate for the year below 1 percent, which would be the lowest since the depths of the Great Depression, when the rate turned negative.

The nation's paucity of savings is raising alarms from the Federal Reserve to consumer watchdogs who worry that the nation is counting on foreign savings to maintain a spendthrift lifestyle. Some groups are cranking up advertising campaigns to try to remind Americans that they don't need to participate in every sale.

And there are now high-level suggestions that the tax system needs to be changed to encourage savings instead of spending.

"In two generations it seems that we've lost the culture and habit of savings," says Nancy Register, of the Consumer Federation of America. "There's so much marketing pressure to spend and buy and have instant gratification. And if you can't buy it now, put it on your credit card."