February 8, 2011
Why Americans Can’t Save Money
Introduction
Ed Nacional
For a short time, Americans seemed to be born-again savers. In the second quarter of 2009, in the depths of the Great Recession, households put away 7 percent of disposable income, compared with under 2 percent in the third quarter of 2007. Yet the savings rate is falling again, down to 5.3 percent in December.
According to a Harris Poll released last week, 27 percent of Americans have no personal savings and 34 percent have no retirement savings, an increase from over a year ago.
At the same time, people are spending more. Borrowing is up, perhaps a sign of consumer confidence in the recovery.
Why was the era of thrift so short-lived? Why are Americans spending again, yet unable to save?
Read the Discussion »