About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Tuesday, August 23, 2016

Debt Question Raised - The Principle Of The Opposite

This post is written to respond to questions like long time reader DC asked regarding the referenced post – specifically DC questioned how the savings rate in America increased, regardless of the bond or CD interest rate yields, when "Americans have once again pushed up to record levels of consumer debt."
This is an excellent very intuitive question. 
The graph below shows household saving rates have increased in many countries with low or negative interest rates.  The referenced post was written to show that increased savings were being realized in many countries all over the world – not just the U.S. which shows a smaller uptick (really very flat) in household savings rates the past few years than the other countries on the graph.  In brief, the referenced post was talking more about other countries than it was the U.S.
The graph also shows that nonfinancial companies in Europe, the Middle East, & Africa are holding on to cash which was another part of the referenced post.
click on graph to enlarge
Although the U.S. savings rate has not increased as much as the other countries shown on the above graph have, the following graphs show that student loan debt is the only type of debt that has significantly increased in the U.S in the last several years.  Although students have a tremendous burden in paying off their student loans they will not worry about retirement savings for many years & accordingly are not the people the post was referring to.  Click on graphs to enlarge.
A good key to start saving is to reduce existing debt & people who have reduced credit card & home equity debt are in a much better position than they were a few years ago in this regard.  But the graph below shows that America is still debt heavy with almost two thirds of college graduates having student loan debt.
click on graph to enlarge

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