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".
"According to the BEA, the national annual savings rate fell in 2005 to its lowest point since the Great Depression: negative 0.4 percent. Since then, it has continued to fall, registering at negative 1.6 percent in May 2006 and negative 1.5 percent in June. Compare those numbers with 1985 when the national savings rate hit a record 11.1 percent and it's clear why economists are raising the warning flag." from BankRate
Google "American savings rate" and you'll see many other sources stating it's below 0%.
While saving that $80/month (for basic cable!), we get the added bonus that our 27 month old speaks in complete & detailed sentences, has well developed social skills, is amazingly polite, doesn't know what a commercial is, doesn't know what a "product tie-in" is, and never begs for crap he saw on tv. We are ecstatic that his first choice for fun is to play outside or read a book or play with his blocks.