Posted on 01/31/2006 7:02:38 AM PST by SoFloFreeper
It can't be true. The only available jobs are flipping burgers and that's if you can beat that illegal immigrant to the employment line.
Can't be true. I saw MSNBC spinning this as bad news yesterday. /Sar.
Something about a teeny, tiny drop in future expectations.
The MSM is shameless in their distortions.
"Then why is Bush's economic poll numbers so low? Isn't this a bit of a disconnect?"
It looks like somebody has been manipulating their poll numbers. The MSM would never do that. </sarcasm>
Because the other 30% just read MSM and listen to liberal TV broadcasters. They won't ever get the truth from these sources. 30% of the rest of the people are blotto from drugs or alcohol and they don't care what the economy is doing.
The reason that personal savings is so low is that home ownership and housing costs are so high. Mortgages are counted as debts, and, hence, negative personal savings. Home ownership, however, is not counted as savings.
Because it is plainly a good thing, the fact that home ownership is not included in personal savings makes that metric a miserable, counter-productive one. It's plainly a bad thing that the cost of home ownership is so high, but that factor also makes it all the more remarkable that the rate of home ownership is so high.
The highest in three years doesn't say a hell of a lot. In fact, given the economic doldrums we were in in 2002, it's pretty damned pathetic that the public perception is no better than it was in 2002. The good news is that the consumer perception is at least finally headed in the right direction.
Ask temporary employes, farm workers, gas station employees and other small business employees if they have 401s. In the majority of cases the answer is no.
It is good that home ownership is high, but by the BEA's own website, payments on principal would be counted as savings. Now if you refinance and take equity out, then even if you do make payments on principal that year, your savings might be negative. I've known and heard of WAY to many people using home equity loans to finance vacations or other expenditures like that... insanity...
Yes, payments on PRINCIPLE count as savings. BUt that means that you incur the debt when you buy the house, but only incur the savings of the house when you pay the house off.
Say someone buys a $240,000 house. He's payed off $60,000. And the value of the house is now worth $430,000. Now, if this were a stock or mutual fund; they'd say that he has liabilities of $180,000 and assets of $430,000 for a net savings of $250,000.
Insanely, the way that it is scored, as I understand it, is that the mortgage counts as $240,000 debt, his $60,000 of payments on principle as assets and a net savings of -($180,000).
I'm 57 and haven't had a savings account since I was a teenager. I don't plan on starting one, either.
I believe his question was if the contributions by his employer (matching contributions) were counted, and I'm not sure they are.
That's a good question - I have seen some sources saying yes, others claiming no....
If yes, my personal savings rate last year was higher yet, at 37%. Most is in new investments...
Good for you! And if you are anything like my clients, you had a good year (even better if you look back 12 months from now). Those returns aren't counted either, by the way.....
401k and IRA contributions are not considered in the savings rate. Savings are based on disposable income (after taxes) minus consumer (non-investment) spending. Because 401k and IRA contributions are pre-tax, they are not part of disposable income and therefore not savings.
It's a flawed statistic.
More here, The Savings-Rate Myth (Bogus assumptions based on a bogus government statistic) .
As long as you're not buying a house.
Personal saving is the amount left over from disposable personal income after expenditures on personal consumption, interest, and net current transfer payments. This amount is available to acquire financial assets such as bank deposits and mutual funds, to use towards acquiring a home, or to reduce liabilities by repaying principle on mortgages or consumer debt.
The financial assets mentioned in your link are considered savings because they are bought with after tax disposable income.
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