In his blog, John Mugarian had an epiphany on why the Chinese have a saving rate of 50% whereas America has an essentially zero - ZERO! - saving rate:
I get very frustrated when I watch TV because of all the advertisements. I know, I should get Tivo or a DVR, but thus far I haven't.
A few weeks ago I decided to do something odd. I actually counted the minutes of ads while watching ABC's "Boston Legal". After I tallied the numbers I was shocked that 25 minutes of the hour long program were advertisements. This really frustrated me since I pay a fee to a cable company to watch my own TV, and then they waste 25 minutes of my time trying to sell me something during the show. Television is nothing more than a sales tool that has molded and shaped the minds and spending habits of consumers.
Then it hit me. Now I know why America has a zero savings rate, while the Chinese have a savings rate of 50%. Hence, my 4th quarter score above stands, Chinese 50%, the US 0%.
So, what is the American government doing about our dismal national saving rate? Well, for one, they went to China and tell them to save less! Mungarian wrote:
Link - via Memetician (photo: s2photo [Flickr], edited)
In Barron's (December 11, 2006, page 30), Al Hubbard, the assistant secretary to the president for economic policy told China's deputy finance minister, ““the Chinese need to move to a lower savings rate. It would both raise the standard of living and increase the quality of imports into China."
I would have loved to see the face of China's deputy finance minister after Hubbard made those comments. This is like taking financial advice from a person who (Lending Tree commercial) is "up to their eyeballs in debt".