Americans saving less than nothing

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dewayne Hendricks <dewayne () warpspeed com>
Date: January 9, 2006 1:26:38 AM EST
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] re: Americans saving less than nothing
Reply-To: dewayne () warpspeed com

[Note:  This comment comes from reader Steve Schear.  DLH]

> From: Steve Schear <s.schear () comcast net>
> Date: January 8, 2006 9:16:49 PM PST
> To: dewayne-net () warpspeed com
> Subject: Re: [Dewayne-Net] Americans saving less than nothing
>
> At 07:28 PM 1/8/2006, Dewayne Hendricks wrote:
> > Americans saving less than nothing
> > Spending could outstrip income in 2005, which hasn't happened since
> > the Depression
> > - Tom Abate, Chronicle Staff Writer
> > Sunday, January 8, 2006
>
>
> > Given how much red ink households racked up in the first 11 months of
> > last year, Lansing said the nation's personal savings rate could well
> > be negative for all of 2005.
> >
> > That, he added, would be "the first such occurrence since the Great
> > Depression."
>
> Due to the weakening of contract law by the courts, allowing  
> companies to shrug off pension obligations and shift them onto the  
> backs of citizens, perverse incentives in our tax code and aided by  
> the Federal Reserve almost all of most middle class family's net  
> worth's are whittled down to their homes.  The lack of real savings  
> and the economic cushion it affords means many families will be  
> unable to weather any sustained downturn and, despite assurances to  
> the contrary by the ever rosy sycophants feeding at the public  
> troughs, trigger a second Great Depression. One of the excesses  
> that proceeded the Depression were zero-down, interest-only, home  
> loans very similar to today.  One of the reforms put in place after  
> the depression was a requirement for a conventional mortgage.
>
> The savings situation is made far worse by the enormous balance of  
> trade deficit, public and private debt (and average of > $350,000/ 
> citizen) versus their net worth (< $50,000).  Writing in the spring  
> issue of The National Interest, the venerable Peter F. Drucker  
> asserted: "The U.S. government deficit . . . is fast becoming the  
> sinkhole of the world financial economy. The persistent U.S.  
> deficit creates a persistent deficit in the U.S. balance of  
> payments, which make both the U.S. economy and the U.S. government  
> increasingly dependent on massive injections of short-term and  
> panic-prone money from abroad."
>
> When the U.S. Treasury reported the official 2004 federal budget  
> deficit at a record $413 billion the hisses and boos in the  
> financial media were unrelenting. Two months later, the Treasury  
> reported the actual 2004 deficit -- using generally accepted  
> accounting principles (GAAP) -- was really an incredible $11.1  
> trillion [1], up from $3.7 trillion in 2003, yet nary a word was  
> heard in the financial media, from Wall Street or from any  
> political denizen of that former malarial swamp on the Potomac. An  
> exception, of course, was Treasury Secretary John Snow, who signed  
> the government's financial statements, but the data release was as  
> low key as physically possible.  http://www.gillespieresearch.com/ 
> cgi-bin/bgn/article/id=596
>
> If events follow their usual course, after the coming financial  
> debacle has laid waste to most American's dreams of continued  
> prosperity for themselves and their children and a modicum of  
> comfort in retirement and the bread lines return and then recede  
> into history those in authority will once again be successful at  
> deflecting blame from their unwillingness to rein in public  
> spending, the ponzi game of wealth redistribution through taxation  
> and their mismanagement of the currency in pursuit of unwise social  
> programs and the repayment of powerful political patrons.
>
> Steve
>
> The past does not repeat itself, but it rhymes.
> Mark Twain
>
> We learn from history that we do not learn from history.
> Hegel

Weblog at: <http://weblog.warpspeed.com>



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