[frankjr]

I am assuming housing value is excluded from the savings rate. I wonder if mortgage loans are included on the debt side.

[syriacus]

Home ownership is up. Money can't be two places at once.

[Investment Biker]

Someone once said - There are only two thing you can do with money. You can spend it or you can save it to spend later.

[A.Hun]

They had to find some bad news somewhere....lots of good info on the savings rate and how this is figured on this thread:

http://www.freerepublic.com/focus/f-news/1568624/posts

[JimRed]

My first thought as well; home equity is way up. And the rate of return (at least over the past four or five years) has been much higher than most savings plans.

[paudio]

I didn't see how they estimated savings in the article. Is it only the residual of earnings minus consumption?

[Semi Civil Servant]

When the comet strikes Earth and 2/3 of the people are killed off, home owners will be sorry they sunk all that money in a drastically depreciated asset...

...just thought I'd add another worst case scenario....

[DM1]

"dipped into previous savings in 2005 - to the tune of one half of one percent of their after-tax income"
um aftertax income apparently does not include pretax items like 401Ks etc. so Americans could be saving more just not in completely liquid assets

[Trajan88]

Save more than one makes?

Incredible... a new "law" of thermodynamics has been discovered that will free one's soul.

[Eagles Talon IV]

Ok folks, one more time. This is how the government calculates the savings rate.

The rate of increase in consumer spending is subtracted from the increase in wages and the result is called the rate of savings. If spending climbs 1% while wages increase only .5% the resultant "savings rate is a negative .5% (.5%-1%=-.5%) It doesn't matter if in fact the money spent by the consumer was spent on a mutual fund, stock, gold or any other hard asset. The savings rate as figured by the government does not include home ownership, retirement accounts, collectibles or anything else of the kind.

It is the most useless and misleading of the statistics put out by the government.

[Toddsterpatriot]

You read it right. The average household didn't save a dime last year.

Incorrect.

[rightinthemiddle]

We need to take into account the increasing number of seniors who are not saving anymore, but spending their savings.

[Dont_Tread_On_Me_888]

Savings rate lowest since the great depression (living on borrowed time?)

Why save money if those who have money will have that money taken away from them to give to those who do not have money, but want money?

Also, why save money when the government will tax that money to pay for illegal aliens or welfare groupies?

We were all told to "be wise with your money, invest and save" but the worthless slugs who live off welfare get free money off of our sweat and tears.

Worthless slugs get rewaded--self-sufficient "attemptees" get screwed. This is the USA today. This is why the savings rate is so low.

When the hurricanes came, those with homeowners insurance paid a HUGE deductible. Those without homeowners insurance got free FEMA money (usually, far more than needed. The fraud is incredible). They will get things back to normal with free money (from taxpayers).

We were also told to save for retirement. We saved, but we will be taxed to death to pay for those who did not save so the savings we "saved" will be lost to those who did not save but are not getting OUR savings--you can take that to the bank, assuming, of course, you will have a reason to go to the bank the way the government will tax us into oblivion.

[MD_Willington_1976]

"Americans seem to be spending money they don't have just to maintain a lifestyle to which they've become accustomed."

What's in your wallet...

[ScreamingFist]

Home ownership is up. Money can't be two places at once.

Unless your home is paid for, you don't own it....period. If you don't own your home, having some savings is a good thing.....I've never seen anyone eat their home in bad times.

[Clintonfatigued]

The story is more complicated than the article indicates, but this is still bad news. Not helping is that financial institutions encourage people to make unwise choices.