More fodder for the 'Rich Man, Poor Man' debate

Is the economy robust and growing, or is everyone, led by the tone-deaf media, trying to sing "Happy Days are Here Again" with their heads stuck in the sand?

Savings Rate Lowest Since Great Depression

Americans are spending everything they're making and more, pushing the national savings rate to the lowest point since the Great Depression.

Soaring home prices apparently have convinced people they don't have to worry about saving, a belief that could be seriously tested as 78 million baby boomers begin to retire.

The Commerce Department reported Monday that Americans' personal savings fell into negative territory at minus 0.5 percent last year. That means that people not only spent all of their after-tax income last year but had to dip into previous savings or increase their borrowing.

The savings rate has been negative for an entire year only twice before _ in 1932 and 1933 _ two years when Americans were having to deplete savings to cope with the massive job layoffs and business failures caused by the Great Depression.

The article goes on to say that this time around its because people are feeling wealthy that they are spending more than they save.

That's a load of hooey, and if the writer doesn't know it, they should.

Economists make a big deal about how Baby Boomers are planning to retire quickly.

Most of the boomers we know have already resigned themselves to the idea that they will never be able to retire, or at least they'll have to work until their health or mind fails, or no one will hire them anymore.

The core rate of inflation last year was well north of 3 percent, actually about 3.4. That's an official government figure. The real number could be above that. At the same time personal disposable income rose 1.4 percent. By our rough, seat-of-the-pants "look ma, no calculator" reckoning, that's a 2.0 percent loss of purchasing power. No wonder people are borrowing.

"Yikes!" you cry out. "We thought the Oklahomilist was a conservative." Well, yeah, we are, but there isn't anything particularly conservative going on in Washington these days, especially at the level of the Federal Reserve, which is ordering the issuance of new credit and the printing of new paper money at an all-time clip. Outside of Dubya's tax cuts, which may not survive the semi-annual congressional gutting process, there's not much to get your hopes up.

For a better perspective, check out "Ice Station Retirement" by David Andrews, which might just be the most incisive piece of information you will read this year.