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Post by kramer on Mar 2, 2009 15:53:47 GMT -6
I can say from my point of view, as soon as I heard words of serious economic doom from B.O., I stopped about 95% of my spending.
Obviously, I wasn't the only one who reduced spending based on his words of doom...
I wonder if the positive words come after all of their left wing social program spending bills have been ok'd?
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Post by unlawflcombatnt on Mar 2, 2009 18:02:05 GMT -6
There's one obvious way that savings can increase -- when the incomes of the most affluent rise. The most affluent already spend a smaller fraction of their income than the non-affluent. Thus, if the incomes of the top earners increases, and everyone else's stays the same, the savings rate will increase. Needless to say, the reduced availability of credit also increase the savings rate, by reducing consumer ability to spend borrowed money, thus subtracting from spending without subtracting from income. I suspect, however, that the savings rate of the lower 80% of the income spectrum has actually declined, as 4 million jobs have been lost over the last year (an employment decline of -2.7%, and real weekly wages declined -1% in 2008. Combining the -1% 2008 real wage decline with a -2.7% employment decline gives an aggregate wage decline of -3.7%. Thus again, if there's been any savings increase, it's come mostly from the reduced spending/increased income of those at the top, and from those who rely on non-wage income.
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Post by kramer on Mar 2, 2009 22:12:21 GMT -6
There's one obvious way that savings can increase -- when the incomes of the most affluent rise. The most affluent already spend a smaller fraction of their income than the non-affluent. Thus, if the incomes of the top earners increases, and everyone else's stays the same, the savings rate will increase. Needless to say, the reduced availability of credit also increase the savings rate, by reducing consumer ability to spend borrowed money, thus subtracting from spending without subtracting from income. I suspect, however, that the savings rate of the lower 80% of the income spectrum has actually declined, as 4 million jobs have been lost over the last year (an employment decline of -2.7%, and real weekly wages declined -1% in 2008. Combining the -1% 2008 real wage decline with a -2.7% employment decline gives an aggregate wage decline of -3.7%. Thus again, if there's been any savings increase, it's come mostly from the reduced spending/increased income of those at the top, and from those who rely on non-wage income. Good points ULC. I assumed that the savings were from ordinary folk who have stopped spending.
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