Friday, February 5, 2010
Americans must start saving again by David Newville
Are Americans spending more? The crucial variable to bring about the balance in savings and investment is interest rate. And Americans' inclination to spend a lot and to save less might become a future problem. For instance they might need to make loans from foreign economies and this is exactly what is happening at the moment. Two third of American economy constitutes from consumer spending but spening a lot causes the interest rate to rise so does the cost of borrowing from foreign economies. This article only poses the questions; answers lies in policy makers mind.
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To me, it would seem common sense that Americans would want to save especially since a majority are worried that China is growing and financing our debt. I believe that saving is more of a cultural idea, look at Japan and China both countries think long term and a majority of their citizens save their money. In order for saving to become a priority, I agree with the author, the government needs to take bold actions. I personally like the idea of creating a savings account for every child at the start of birth.
ReplyDeleteNewville hit it right on the money when he said easy credit helped us to get into the mess we are in today. It is WAY to easy to get a credit card and that quick credit is putting tons of people into debt.
ReplyDeleteWe need to be the ones to start saving and putting our country back together. America cannot keep depending on other countries to get us out of the mess we are in.
I am shocked that "more than a quarter of Americans do not have a bank account". It should be a requirement that everyone over 18 have one and/or if you start a job and are on payroll to have one.