Low savings rate in US seen as danger

[OhioChick]

Source: Zee News-India

Washington, April 15: The European Union's monetary chief said Friday that the United States' low savings rate and large budget deficit pose a risk to the global economy.

In comments after making a speech in Washington, EU Economic and Monetary Affairs Commissioner Joaquin Almunia, from Spain, said that while the economy of the euro currency zone has been strengthened by reform, global economic imbalances could undermine it.

"We are living in a global economy with big imbalances not created by the euro area," he said.

Thirteen of the 27 EU member countries currently use the euro currency.

During his speech at the German Marshall Fund, Almunia said the world's largest economic powers should take advantage of current prosperity to reform their economic policies. He said that while Europe was changing its policies, others were not.


Read more: http://www.zeenews.com/articles.asp?aid=365917&ssid=51&sid=BUS

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Uh-Oh...

[Laughing Mirror]

1. EU's monetary chief is just being polite calling it a "low savings rate"

It's been a negative savings rate for the past two years. Negative means minus, lower than low.

How is anybody supposed to save anything with these slave wages we have to try to eke out a living on. Don't blame us poor slaves. We work as many jobs as we can, send members of our family off to Iraq to get killed or maimed, just to help us pay the rent. Still we can't always keep the wolf away from the door. Save? Are you serious? We work until we drop but we cannot perform the impossible.

[Deja Q]

2. And the credit cards they want everybody to use as means of compensation?

I miss the days when the corporations gave proper wages and encouraged us to save. People did save. People could save. People still got what they wanted in reason.

Credit cards are a curate's egg. Meant for times of no income, they are perverted; workers getting lower paid jobs and are encouraged to use the card for everything up to big cruise vacations. (some tv adverts are astonishing in what they say.)

Didn't credit cards make their presence known in the late-60s?

[Sen. Walter Sobchak]

3. They have been around since the turn of the last century,

But only really came into their present general purpose form in the 50's with Diners Club and Americard (now VISA)

They didn't really however become common place until the end of the usury laws in the late 70's because until that point credit cards were a money pit as the cost of money was usually higher than the legislated interest rate. Therefore the banks who issued credit cards were very selective because giving a credit card to someone who would carry a balance would lose them money.

But once the usury laws were off the books, credit cards for every man, woman, child and goldfish became profitable for the credit card industry because they could set interest rates that were profitable.

[TexasLawyer]

4. The US does not have a LOW savings rate

It has a negative savings rate. That's not just low-- it is non-existent and moving steadily backward.

From the article:

The savings rate in the United States has been negative for almost two years.