Feb 2, 2007

Hot News For Generation Young -- Visa/Master Card Are Not Savings Plans

I know this may come as a surprise to many of you, but sending money to make a card payment is not the same as putting money in the bank. After reading Martin Crutsinger’s article, on a Commerce Department report, I thought that many of you might think that it is.

Last year we came the closest to breaking a record, that has held since 1933, than at any time in 74 years. What record is that? Why silly, it’s our savings rate. Last year Americans saved a negative 1%. The record was set in 1933 with a negative 1.5%. There have been only 4 times that the United States has had a negative savings rate, twice during the Great Depression 1932 & 1933, when unemployment was at 25% and again in 2005 & 2006 when unemployment was 5% or lower.

On top of that the average American tapped into their Visas and Master Cards increasing their personal debt levels to highest amount in history. Of course the consumer would get an A from wall street who is cheering while the DOW, fueled by consumer spending, is hitting new highs and from Uncle Sam they would get an A+ for following the governments stellar example.