Rate Cuts Not Helping
Most consumers are not seeing any difference even though the
Fed’s have cut rates. With the national savings rate having
been declining for more than 20 years, and the amount of
debt in this country growing instead – most people know that
a change must be made if the country is going to get out of
the recession that it is going into.
According to Goldman Sachs, the amount of accumulated net
savings for household, business and government savings as a
share of the Gross National Income was only 1.6% in 2006.
Now it seems that it has gone even lower in this past year.
In 2005 it was under zero and many thought it couldn’t get
worse. However, many nations pride themselves on being debt
free, or at least having low debt ratios. The United States
is a nation of debtors.
Household debt has increased to more than $13 trillion, and
more than $2.5 trillion is just credit card debt. About 10%
of residents have more than 10 credit cards, and 8.3% of us
owe more than $9,000 in credit card debt.
This means that on average, more than $2,200 is owed per
household. Not that this seems too terrible, but with credit
card companies increasing the amount of interest that they
are charging, along with the number of fees being tacked on
– debt is simply spiraling out of control – and the credit
card companies are feeding it.
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