Report: Half of the Country Has No Savings

depression-era-unemployment-lineWe have occasionally followed new reports on the economic condition of the public and the news is rarely good. After an extremely very poor jobs report, a new study found that twenty-eight percent of Americans have nothing in their savings accounts and another 21 percent have no savings account at all. Only 29 percent has $1,000 or more in their accounts.

The recent survey by America Saves, as part of a campaign from the Consumer Federation of America, surveys 1,000 people three times per year for its Personal Savings Index.

Not surprisingly, top earners continue to sock away savings — 84 percent of people who earn more than $100,000 annually reported to be interested in saving compared with 72 percent of people with annual incomes between $50,000 and $75,000 and 68 percent of people who earn less than $25,000.

The economic situation in this country is far worse than most people appreciate. We live in economically stratified areas where there is little interaction between distant economic classes. These reports are a startling wake up call for policy makers. The goal of everyone having a few months cushion for bad times is clearly not occurring — leaving at least half or more of the population on the razor’s edge of poverty.

Source: CNBC

128 thoughts on “Report: Half of the Country Has No Savings”

  1. To the person raising the ante on minimum wage. I say raise it to $500/hr. and McDonald’s workers can live next door to successful attorneys. That’s the way economics works, right???

  2. “no resources cite INCREASING RENTS as a reason for the failure of Cabrini Green.
    Addressing an argument no one made is called a “straw man.”

    “Fleming posits that every subsidized dollar leads to at least an equal amount of increased costs.
    Subsidies distort the market, sometimes raising costs, sometimes creating shortages (e.g., Cabrini).

  3. Dusty

    You clearly understand the SF situation but then continue to cite regulations and zoning.

    They’re out of room. Your already cited supply and demand.
    It’s a wonderful city. ‘Wonderful” drives expense.
    It was once destroyed. Destruction leads to regulation.
    It is on a fault. Faults lead to regulation.
    It is a charming city. Charm leads to expense and regulation.
    It has a temperate climate. Temperate leads to value.
    It’s a great cultural city. It has great restaurants. There is great beauty an hour out of the city.
    Green space is good.
    They’re out of room. They’re out of room. They’re out of room.
    The suburbs are full.
    People who have a valuable property are very much in favor of regulations and zoning.

    New York is the same.

    We’ve got the very very rich who can afford those cities and you’ve got the rest of us that have to settle for Bakersfield.

    We need a little income re-distribution if you want to go back to the good old solid middle class days. Are you willing to do that?

  4. Calypso

    Once you’ve controlled your laughing jag, you’ll note that no resources cite INCREASING RENTS as a reason for the failure of Cabrini Green.

    Fleming posits that every subsidized dollar leads to at least an equal amount of increased costs. He posits that is what has happened with college costs and it follows with subsidized housing.

    I think he is wrong and you badly understood my point about Cabrini Green.

  5. What I don’t understand is why the hell you cited them as illustrative of how some struggle and the evils of regulation and zoning that have blocked their ability to own

    I cited them as living in San Francisco where I am familiar with the cost of renting and owning, having once lived there and being aware of the rent that they were paying for a flat in the city. Also to cite San Francisco as one of the poster children of the reasons that housing is so expensive. Regulations, restrictions, building fees and rent control all contribute to the lack of housing inventory in San Francisco.

    It is more of a problem for SF than many other places because there is not anywhere to expand. They cannot expand their housing inventory without going into high rise tenement types of buildings. In addition the building codes, especially for earthquake standards make it very very expensive to build new.

    The surrounding suburbs are full up and in many places zoning mandates open spaces (which I am not against) which further limit the footprint where housing could be built. While many people CAN afford to live in places where housing is restricted, the people who are most adversely impacted are those who would benefit from being able to live closer to their work.

    SF used to be a relatively middle class city. Now it is impossible for a working family to live there and very very difficult unless you have substantial means.

    The NIMBY effect is the main reason the urban areas in California, in particular, are so expensive.

    I’m not saying there should be no regulations or zoning. That would be crazy. However, there should be some sort of reality in the zoning and regulations that don’t price people out of the market and still allow rational and safe growth.

  6. Annie,

    Yes. We have learned something since 1960. Yes. It is possible to build nice federally subsidized housing. Well probably not anymore – not with the Republicans running the House.

    And wanna bet the rents in that subsidized housing are not increasing five-fold because of subsidies?

  7. Mike, I assumed that is exactly what you meant when you mentioned Cabrini a Green.

  8. Cabrini Green was a deliberate choice in reply to Fleming’s comment that college subsidies to students have been the driver of increased college costs and leads to student debt and federal housing subsidies would produce the same increases in housing costs and ultimately tenant housing debt.

    Federal housing subsidies did not drive up rents.

    I assumed most every reader would understand that the well-known, highly publicized failure of Cabrini Green was NOT increasing rents loading tenants with debt. I repeat, no tenant was burdened with debt caused by increasing rents. I assumed Cabrini Green was understood to have been illustrative of a failed policy that promoted segregation and furthered poverty and crime. I was trying to point out that Fleming’s comparison was without merit.

    Next time I’ll try not to overestimate our mutual understanding of the history of subsidized housing in the United States and the significance of Cabrini Green in public housing.

    And, Dusty, your kids are obviously doing just fine. More than fine. What I don’t understand is why the hell you cited them as illustrative of how some struggle and the evils of regulation and zoning that have blocked their ability to own. And it never occurred to me to ask what they earned (why did you then proceed to publish their earnings while being careful to emphasize they made at least $500,000?) – so perhaps the “none of my business” was unnecessary.

  9. Thomas Sowell. Ha! From the Friedman school of economics.

    It’s evident your position is grounded by nothing except ultra conservative ideology. Your position is that every government subsidy is bad. That’s the beginning and end of your story. I assume your own professional and personal financial situation reflects those beliefs.

    And the quote you supplied is nothing but drivel. ‘Sadness’? Are we overrun with rent control?

    I’m not interested in your right wing tracts.

  10. Oh Mike

    You mean THIS Cabrini-Green? This is your shining example? Really?

    At its peak, Cabrini–Green was home to 15,000 people,[2] living in mid- and high-rise apartment buildings totaling 3,607 units. Over the years, crime, gang violence and neglect created deplorable living conditions for the residents, and “Cabrini–Green” became synonymous with the problems associated with public housing in the United States. The last of the buildings in Cabrini–Green was demolished in March 2011.

    Nice what subsidies can build. (sarcasm) Section 8 slums is not what I had in mind when discussing zoning and other regulations that make housing and rentals go up . Single family housing and rentals in areas where you don’t take your life into your hands in crime ridden rabbit warrens.

    Even Time Magazine doesn’t have much nice to say about Cabrini Green.,29307,2034317_2215123,00.html

    So sorry, Dusty. Break into your retirement and give the kids the down payment AND sign on the mortgage. (Credit terms are damn tight)

    Not that it is any of your business but “the kids” haven’t been kids for about 20 years. They have a combined income in the mid 6 figures (that means 500K or better a year). If they couldn’t afford a house by now that is just too damn bad. (They own two homes in other cities)

  11. Housing projects were a bad idea. I think we can all agree on that. Subsidized housing needs to be interspersed among the cities’ various neighborhoods. The Supreme Court agrees.

  12. Mike citing Cabrini Green as SUPPORT for his proposition: priceless. Via Wiki:”Over the years, crime, gang violence and neglect created deplorable living conditions for the residents, and “Cabrini–Green” became synonymous with the problems associated with public housing in the United States.”

  13. The effect of government subsidies is the same in college and housing.

    Thomas Sowell:

    “The political meaning of “affordable housing” is housing that is made more affordable by politicians intervening to create government subsidies, rent control or other gimmicks for which politicians can take credit.

    Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them.

    Even in an era of much-ballyhooed “change,” the government cannot eliminate sadness. What it can do is transfer that sadness from those who made risky and unwise decisions to the taxpayers who had nothing to do with their decisions.

    Worse, the subsidizing of bad decisions destroys one of the most effective sources of better decisions– namely, paying the consequences of bad decisions.”

  14. Fleming

    Oh yes. All that federal subsidized housing in the 60s resulted in unaffordable housing in Cabrini-Green with tenants saddled with huge housing debt.

  15. Fleming

    And thanks the worthless comparison between college subsidies and housing subsidies that is void in stating how they are similar.

  16. Government subsidies for college tuition only ended up raising tuition even further, contributing to the huge student loan debt crisis that itself keeps young people unable to afford a house.

    “The basic problem is simple: Give everyone $100 to pay for higher education and colleges will raise their prices by $100, negating the value of the aid. And inflation-adjusted aid–most of it federal–has certainly gone up, ballooning from $4,602 per undergraduate in 1990-91 to $12,455 in 2010-11.”

    Thus begins a classic upward price spiral caused by government intervention: Subsidies raise prices, leading to higher subsidies, which raise prices even more. Yet this higher education bubble, like the housing bubble, will eventually pop. Meanwhile, large numbers of students will graduate with more debt than they would have in an unsubsidized market.”

    Same problem exists when you subsidize housing.

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