So, the citizens, almost instinctually started to save again. IN THAT is the way to recover the economy.
I stated on this blog as soon as I heard about the bailout that it wouldn't matter to the USA economy that we would be building our economy all over again.
By saving, the banks the citizens are investing their monies can begin to lend. There are formulas for any bqnk to establish 'safe lending' while maintaining the fiscal integrity of the bank for its depositors.
Don't let any hype get in the way of being financially solvent. Increasing savings is a sound way for Americans to establish credit again in the Small Business and Housing sector. It is going to take time, but, it will be worth it.
During the Bush Years everyone got used to the 'fiscal high' and 'quick return.' It isn't there anymore. The USA has been raided of its treasury and its economy and it will take time to rebuild. There isn't anymore spinning gold out of straw. That ended at the end of 2008.
Increasing USA Saving Rate is a Good Sign (click title to entry - thank you)
Sun, 06/28/2009 - 22:45 EDT
Surging U.S. Savings Rate Reduces Dependence on China
Government data today showed that the household savings rate rose to 6.9 percent in May, the highest since December 1993, as personal spending increased less than incomes. The rate in April 2008 was zero. Most of the rise in income in May was due to one-time government stimulus payments to seniors
Nouriel Roubini, an economics professor at New York University and chairman of RGE Monitor, forecasts that the savings rate will ultimately reach 10 percent to 11 percent. What’s critical, he said in a Bloomberg Television interview on June 24, is how quickly it increases.
A rapid rise in the next year because of a collapse in consumption would push the economy, already in its deepest contraction in 50 years, further into recession, he said. If it occurs over a few years, the economy may grow.
From 1960 until 1990, households socked away an average of about 9 percent of their after-tax income, government figures show. Americans got out of the habit in the 1990s as they saw their wealth build up in other ways, first through surging stock prices and then soaring home values, Gramley said....
