Why don't Americans save?

Quote from Specterx:
I think Americans don't save partly for cultural reasons (conspicuous consumption and ostentatious displays of wealth used to be prized in our culture; maybe not so much anymore). A documentary I was watching the other day interviewed this guy who was making over $100,000 a month for several years at the height of the credit bubble. Now his house has been seized, all cars sold off etc. etc. and he's forced to rent an apartment. Can you imagine somebody making >$1 million a year and being so stupid and shortsighted as to fritter away every cent of it? That's the world we lived in.
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The media tends to overexagerate things and find the worst case scenarios. Anybody making 100k a month and not saving at least 10 of it is an idiot and deserves what he got. I have learned, like many others that things don’t always get better, sometimes they get worse, a lot worse.

The rich who have seen their lifesyles downgraded and portfolios lose 40% are stilling doing a lot better than the guy making $8 an hour who got his hours cut or maybe laid off. I don’t save $1000 a month anymore not because I don’t want to, it’s because I'm not making the money I used to.
Quote from Specterx:
I think the other big factor is that wages haven't kept up with inflation. It's just not possible to fulfill the average American's material wants (and 'wants' easily become 'needs') on the average American's salary. People make up the difference by borrowing and refuse to give up "necessities" like $100-a-month cable service. C'est la vie.
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This is exactly the point I’ve been trying to make and people don’t want totalk about it. When the Man created the Federal Reserve, this was the means by which their wealth would continually increase while the workers wages are continuously stagnant. I think you might be confused as to which “necessities” people are borrowing to pay for. When my health insurance goes up $40 a month and I don’t get a raise to pay for it, I have 3 options. 1) Work more hours to pay for it or attempt to get a higher paying job through increased skills. 2) Borrow money to pay for it, or 3) Cancel the policy and go without health insurance. All these options benefit the rich at the expense of the poor/middle class. Do this year after year and you wake up and it’s 2008 and the economy is crumbling. BTW I don’t have cable, it’s a waste of money. $36 a month for Blockbuster and I get all the free rentals I want.
Quote from Specterx:
In your case, the problem is that pizza delivery is a zero-skills job. It doesn't require physical labor, specialized knowledge, or experience. If you want to earn more (in preparation for going out on your own) I strongly recommend learning a trade like plumbing, electrical work, or carpentry. These jobs require more physical labor, but also probably pay more than an entry-level desk job where you'll be competing against people with college degrees. It's also easy to go out on your own once you've got the skills down and a few years' experience.

Alternatively, have you considering being a policemen/sheriff's deputy, prison guard, fireman, something like that? I know a guy who made 60-70k a year as an independent mover. You won't get rich doing these jobs but you'll be able to save quite a bit by living cheaply.
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I have already addressed this in the below post. The “zero skilled job” argument is just crap that people came up with to justify low wages. 50 years ago the creed was, “work and you deserve to eat.” Now it has turned into, “you don’t deserve to eat because we’ve deemed your job requires no skill.”

Still, nobody has been able to explain why pizza delivery used to pay so much and now it doesn’t. In another 5 years, those skilled jobs will be asking the same question. Why am I not making what I used to? I heard they are going to insource doctors from China and India now. I also saw how a routine doctors visit can now be done at Wal-Mart with a technician with a video camera. The doctor is somewhere else and looks at a screen and diagnosis it from there. Soon they’ll be outsourcing doctor’s visits. So soon doctors will be asking the same question. I wonder what the justification will be then. You gonna tell a doctor they have a no skill job?

http://www.elitetrader.com/vb/showthread.php?s=&postid=2256631#post2256631

BTW I found a big discrepancy in the forex market tonight. I tried it on my live account and it worked perfectly I got over 400 pips on 3 trades. Maybe I've finally found something.
 
Quote from Sam Mcgee:

I've written it here before, the reason that Americans spend too much is because of the amount of television that they watch. Look up any statistics for the hours of television and you'll see that Americans watch almost double the amount compared to any other county. Why do Americans watch so much TV? It's because most of the best programs are made for the largest market place, the United States. Other countries are not as interested in American TV because it isn't made for them.

I lived in the United States for a while about 20 years ago and that was the biggest difference I noticed, after dinner just about everyone was planted in front of the TV there.

The other thing that leads to excess consumption in the United States is that their mortgages are tax deductible. What happens is that as soon as some equity is built up in a home, people use that as a source of extra money to spend. In a round about way, the American government is subsidizing excess consumption with these tax deductions. The amount of money that the United States government has given up for these tax deductions is roughly the same amount that the government is in debt.

Consumption is good to build up an economy but when it gets excessive you end up with a trade imbalance. The money sent out of the country eventually has to come back to purchase something from the United States. What's left to purchase? The United States doesn't manufacture much anymore. The only thing of value left in the United States are shares of stock owned by it's citizens.

In a round about way, the United States is being defeated in an economic war. Asia has no need to engage in a physical war with the US to take them over, they'll just buy them. I don't think that Asia planned it that way but they will certainly benefit from the situation. They would be wise to keep the price low for all televisions they send over.
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Finally here's the evidence:
http://www.businessinsider.com/watching-tv-debt-hunter-college-2011-11
 
Quote from dave74:

Good point.

I believe television is the curse of a nation - especially America. TV will not only make you spend more, it will make you fat simply by sitting there for 3 hours, but also by the countless commercials for junk food. Never underestimate those guys on Madison avenue. They're smart enough to sell ice to eskimos and given enough commercial reps, you're gonna buy what they sell.

TV is bad enough for grown adults. But for kids, it's ten times worse. Smart people will get away from that idiot box and actually be constructive with their time. Really smart people won't even have a TV in their house.
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Good points;
Maybe thats why ,
they named it Eskimo Pie.

I heard on Christian radio recently;
TV time tends to encourage a lazy mind, if one watches enough of it. If one keeps a book handy, results may differ.
:D

And not to play the blame game ;
but actually i think US A saved more when the ad agencys [for banks] did more savings ads:D
 
Quote from Aaron Copland:

How would you feel if you worked all your life lived within your means? Saved a lot of money then lost it all in a failed bank, a bad fund manager.

Yes you are insured for 250k but what if you had 2 million in savings.

WELL WAKE UP! THAT’S EXACTLY WHAT HAPPENING.
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That is part of it. Alot of people have way too much trust in the wrong people. Scams are nothing new in human society the last mess with Alt A mortages and robo signing of loans and defaults shows what the system thinks of the average citizen. They are sheeple, fooder, plebs, and nobody will save them.
Alolt of people we lead down the primsrose path right into wealth destruction.
I elected not to by a house and I stand buy my decision. People are told it is a wealth building asset. If you take 100K and buy a house vs. buy 100K and buy 10 blocks of SPY. You will be ahead and more liquid by putting money into the SP500. A residence is a cost. People focus here in the states on all the upsides to home ownership. The state likes it and promotes it because it is a major source of revenue. Property tax,school tax, gargbage tax, water tax, etc.
The cost of home ownership are understated and sometimes not stated. Real purchasing power for people has dropped,incomes have dropped the cost of living is rising there is very little captial to put into reserves with this scenario. The media does help the issue by spinning the data to fit the agenda. If there is not another economic boom,reality will set in and is a vicious cycle in a stagflation economy.

All for One and Theft to All,

Akuma

Buy GOLD!!!
 
We don't save because we have access to credit and the ability to spend more. We have access to space to afford two cars, big houses filled with furniture, etc. And accumulating is a primal instinct.

If we didn't have access to credit (like in emerging markets) we would all be savers because we would have to pay for our stuff in cash.

And if we didn't have space to own two cars or a lot of furniture, then we would save more because we phyiscally couldn't spend. There is a limit to spending if you live in a 200 square foot studio.
 
Quote from Debaser82:

I live in that pighole of a socialist europe where the government takes 50% of your salary, you don't get to work for your own pockets untill after the summer, and still people over here save more then 10% of their income.

What gives?

Is it because the FED has run a more inflationary course then the ECB eroding the purchasing power of the dollar causing people to search for alternatives?

Or is it the US spirit where people are always on the outlook for the next bubble to grow so they can hop on and become rich overnight?


Or is this how capitalism is supposed to work? If you can't cut it bad luck and good night see you in the souplines?
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Because American culture is inherently individualistic, egocentric and based on temporary sensual self gratification, which is why most people would blow their paycheck on a holiday, flashy car, expensive clothes, ridiculous gadgets just for that moment of decadence with no thought of long term planning.

Look at steve jobs, he knew this very well, all his products are named I-something. The American psyche can be simply defined as "I,me,myself".
 
If people save, then a lot of excess capital is created that causes imbalances, pushes down interest rates and creates bubbles. People should enjhoy life, spend a lot and just save for what they absolutely need.

Saving made sense when currencies were tied to a commodity. Now saving does not make sense that money is credit. The more you save the more credit is destroyed, i.e. when you save, money is destroyed and the economy goes down.

I guess two people here will understand this. One is trefoil.

"Savings" is a Marxist propaganda.
 
Saving is fundamentally about spending less than you earn. It is something you need to do to have any hope of succeeding at capitalism.
 
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