Friday, August 08, 2008

Way 2 Save, America!

According to the president of the National Bureau of Economic Research, (on whose site I've been spending a lot of time lately researching various things) Americans didn't spend their stimulus checks. We saved 'em.

"Recent government statistics show that only between 10% and 20% of the rebate dollars were spent. ..Tax rebates of $78 billion arrived in the second quarter of the year. The government's recent GDP figures show that the level of consumer outlays only rose by an extra $12 billion, or 15% of the lost revenue. The rest went into savings, including the paydown of debt."

(Got that? Paying down debt is the same as saving. Better, even, if you pay down debt at 18% vs. saving at 4%)

Now, this is bad news for people that hoped the economic stimulus would help head off a recession. Yet it's good news for every individual who made a decision to put something away for a rainy day.

1 comment:

Anonymous said...

I never thought about it like that. Paying off debt is a drag, but it feels so much better when its gone.