Two AP articles snagged, nay, demanded my attention today. First this:
Americans’ Savings Rates Decline in 2005
WASHINGTON — Americans are spending everything they’re making and more, pushing the national savings rate to the lowest point since the Great Depression.
(…)The Commerce Department reported Monday that Americans’ personal savings fell into negative territory at minus 0.5 percent last year. That means that people not only spent all of their after-tax income last year but had to dip into previous savings or increase their borrowing.
The savings rate has been negative for an entire year only twice before – in 1932 and 1933 – two years when Americans were having to deplete savings to cope with the massive job layoffs and business failures caused by the Great Depression.
But not to worry, the AP economics writer has us all figured out — he knows what the problem is!
soaring home prices apparently have convinced people they don’t have to worry about saving, a belief that could be seriously tested as 78 million baby boomers begin to retire.
(…)This time the reasons for the negative savings rate are vastly different. Americans are spending all their incomes and then some because they feel wealthier because of soaring value of their homes, which for many Americans is the largest investment they own.
You heard it here first, folks. Sure, Depression conditions are here, but it’s the people’s fault. We just feel so damned wealthy, it’s gone to our heads. We have no sense. We’re just on a spending spree, throwing money away on (and I quote) “medical bills and other consumption.” Nice.
And Detroit is really feeling the heady pleasures:
Super Bowl Host is U.S. Poorest Big City
DETROIT – Before the Super Bowl kickoff this weekend, private planes will land here, limousines will clog the streets, and lavish parties will be thrown for those with famous names or lots of money. The kitchens of Ford Field will be stocked with two tons of lobster.
Much of the rest of Detroit, though, is a landscape dotted with burned-out buildings, where liquor stores abound but supermarkets are hard to come by, and where drugs, violence and unemployment are everyday realities.
Officials in the nation’s poorest big city see hosting the game as a huge boost. They say it will be a catalyst for further development and provide a chance to improve Detroit’s gritty reputation. They hope visitors will take note of new restaurants, clubs and lofts downtown. To make sure the city makes a good impression, dilapidated buildings have been torn down, roads repaved and landmarks renovated.
Yet with the exception of a few square miles in the center of town, many residents say they have not seen any improvement. And they don’t expect the Super Bowl to have an effect on their lives.
“They spend all that money on the Super Bowl … but they ain’t doing nothing for here,” said Arthur Lauderdale, 59, who lives about four miles from the heart of downtown on Detroit’s east side.
(cross-posted from Unbossed.)