Feb 13, 2006
Last year, all of us taken together spent more than we made. The economists call that a “negative savings rate.” It was the first time since the depths of the Great Depression in 1933 that we spent more than we earned.
In fact, it’s worse than what it sounds – because that total includes all the wealthy people. If you ignore them, the rest of us dipped even further into our savings or into credit.
If economists really looked at what people earned, with an average between $25,000 and $35,000 a year, they would have no trouble understanding what happened. Look at the price of housing, gas, electricity and home heating oil. Look at the price for a new car – and look at prices at the grocery store.
Only somebody making a million dollars a year could wonder why the work force has no money for savings!