Should Americans Be Saving or Spending?by Tim Manni
Last month we wrote that a bi-product of the current recession has been America’s “shift to savings“. Yesterday the Bureau of Economic Analysis (BEA) released the latest figures on personal income versus spending. In April personal income increased by $58.2 billion, or 0.5%, and disposable personal income rose $121.8 billion, or 1.1%. However, personal consumption expenditures declined $5.4 billion.
Is the fact that Americans had more money but spent less of it in April a good or bad thing?
Financial expert Peter G. Miller argues for the sake of saving:
While I understand the argument of those who want more spending, the reality is that the country will be better off if people are not impoverished and living paycheck to paycheck. One of the reason for so many foreclosures and bankruptcies is that many people have little or nothing in the bank for emergencies. That doesn’t make a lot of sense in an economy where people are losing jobs and cutting back hours and days is common.
More savings — I say it’s better to save then to spend. In time your country will thank you.
READERS: Are you siding with Miller, or do you believe consumer spending is the way to get this economy back on track?