Savings rate gets worse...

Sadly, the poor savings rate of the US public, a negative 0.4% in 2005, got even worse in 2006. It is now 1% according to the Commerce Department. The savings rate is typically, as I understand it, the amount of after tax income that people save. So, it being negative means the average person in the US is spending 1% more than their after tax income!

Here is an article on it. Here are some quotes from the AP article:

"[T]he Commerce Department reported Thursday that the nation’s personal savings rate for all of 2006 was a negative 1 percent, the worst showing in 73 years."

"The 1 percent negative savings rate in 2006 followed a 0.4 percent negative rate in 2005. There have been only four years in history that the savings rate has fallen into negative territory. The other two were 1932 and 1933 during the Great Depression."

Its funny, I don't remember seeing this make the headlines I would expect. This is a pretty serious problem....and sadly its our children who will pay for it.