[RoseC@SEC.GOV: The Dollar]

[Alan]

Lan Barnes wrote:
> 
> People can't save when their income all goes to basic food, shelter,
> clothing, and transportation.

These would be the same people I see driving around in 60,000 dollar 
SUVs, I presume?

> 
> Even when long-term savings are unprofitable, there will still be a
> savings rate because of people gathering such boluses of money as down
> payments (houses, cars). Thus a really low savings rate like 0.02% is an
> indication that there is very little discretionary income in the
> society.
In 1998 during the .com boom, the rate was only 0.6%
It was averaging 8% in the 80's and started a rapid decline in 1994.
It was on a downslope throughout one of the largest economic expansions 
in U.S. history.
I don't think it has to do strictly with the amount of available 
discretionary funds.
> 
> Draw your own conclusions.

Kids learn their habits through their parents.
If they aren't taught to save and they learn instant gratification 
instead, then saving is a foreign concept to them.

The other change significant to me(because of my upcoming 
participation), is the absolute lack of need to assemble a large down 
payment for a house.
My parents had to save 20% in 1980, I need a few thousand for closing costs.

  But as nice as it is that some people
> have that situation, the numbers say that it's an aberration. Most people
> are really strapped.

I really used to think so as well.

But now that I live in the state with the highest unemployment rate in 
the country (2003) and which is a contender for 2004, I don't buy it.

People up here live nicely. I see many new cars, the restaurants are 
always full, and there just isn't that "malaise" that I remember from 
when I was a kid and inflation was the killer.
Now, obviously they are paying for all this through easy credit, but do 
"strapped" people really drop $800 on car payments every month? Maybe 
that's why they are strapped. Maybe Oregon has a higher concentration of 
stupid  people who don't understand that eventually they will have to 
pay off that credit card debt?

I don't know, but around here, it sure doesn't feel broke, even though 
by the numbers it should.

A person who steadily put even a little away each
> paycheck could expect to get out a lot more money that went further at a
> later date. Do the numbers today and you'll see that savings accounts
> evaporate.

Even half of the historical stock market return gets you a decent 
retirement if you contribute early and often enough.

-ajb