A Yahoo article, which says saving is for suckers, caught my eye a few weeks ago. The article is a mess of contradictory statements and theories, but perfect for those needing something to justify their spendthrift ways.
“Welcome to the world of ultra-low interest rates, where profligacy is richly rewarded and saving is, well, for suckers. Those who've opted to be austere with their personal finances have found themselves on the losing end as governments and central bankers have worked to get people to borrow and spend in the wake of the global recession.”
The article goes on to say:
“No one is saying Canadians should abandon thrift and go on a wild spree of gluttonous consumption. Indeed, Ottawa has set up tax-free savings accounts to encourage people to save. But the competing priority of spurring economic activity means the interests of savers have taken a back seat and made it that much harder to act responsibly.”
So what is it, should we spend or save?
“Whatever happens, Ritchie Hok, an actuary living in Ottawa, is convinced savers will ultimately wind up paying the price for others' imprudence. At the peak of the U.S. housing bubble, Hok lived in Minneapolis and saw the excesses first-hand. While there he resisted those who urged him to get into the market; a wise move given prices are down 40 per cent there. Now that he's in Ottawa, though, he's hearing all the same arguments for why he should take advantage of low rates and buy a house before prices rise even further. He's convinced Canada's housing market is a bubble that will eventually burst, and when it does, policy-makers will rush to people's rescue. "My fear is that most people in Canada are now debtors and not savers, and so governments will enact policies to help them because they make up most of the population," he says. "Savers may get screwed on the way down, too."’
I don’t think the owners of the more than 2.3 million properties that filed for foreclosure in 2008 would agree that spending like there’s no tomorrow was a good idea, do you? In 2008, one in 54 homes was foreclosed on in the United States, an 81% increase from 2007 and a 225% increase from 2006. Many of these homeowners are still living in tent cities with next to nothing to their names.
Seems to me like the driving force behind Occupy Wall Street is to get the government to help people who really need it - up to this point, they've been focusing on bailing out financial institutions, not individuals. If you're in deep debt and continue to live in an expensive house and drive a Beamer instead of a beater, no one is coming to your rescue.
Should we spend or save? I'm betting on save.
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