{"id":1498840,"date":"2022-05-31T18:14:58","date_gmt":"2022-05-31T22:14:58","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1498840"},"modified":"2022-05-31T18:15:06","modified_gmt":"2022-05-31T22:15:06","slug":"americans-are-only-saving-a-tiny-fraction-of-their-income-heres-what-that-means-for-the-economy","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/americans-are-only-saving-a-tiny-fraction-of-their-income-heres-what-that-means-for-the-economy\/","title":{"rendered":"Americans Are Only Saving A Tiny Fraction Of Their Income. Here\u2019s What That Means For The Economy."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">34<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Famericans-are-only-saving-a-tiny-fraction-of-their-income-heres-what-that-means-for-the-economy%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1498840&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>As rising price levels continue to pressure American families, many appear to be dipping into their savings to cover added costs.<\/p>\n<p>As <a href=\"https:\/\/www.dailywire.com\/news\/americans-draw-from-their-savings-to-fuel-summer-costs-new-inflation-report-says\">inflation outpaces gains in income<\/a>, Americans are spending beyond their means to cover their expenses. Households saved a slim 4.4% of their after-tax income in April \u2014 the lowest level seen since 2008, according to a Bureau of Economic Analysis report released on Friday. Meanwhile, <a href=\"https:\/\/www.federalreserve.gov\/releases\/g19\/current\/default.htm\">Federal Reserve<\/a> data indicate that balances for credit cards and similar types of debt soared at a 35.3% annualized rate in March \u2014 the fastest one-month surge since 1998, according to <a href=\"https:\/\/www.nytimes.com\/2022\/05\/27\/business\/economy\/pce-inflation-april.html\">The New York Times<\/a>.<\/p>\n<p>A fundamental reality in economics, however, is that a lack of savings renders investment impossible. David Bahnsen \u2014 the founder of Manhattan-based wealth management firm The Bahnsen Group \u2014 told The Daily Wire that long-term economic activity is threatened by the low rate of savings. \u201cInvestment is the precondition for productivity, which is the precondition for growth. Therefore, declining savings means declining growth,\u201d he explained.<\/p>\n<p>\u201cWe cannot ever invest a single dollar that is not first saved; all invested dollars are first saved dollars,\u201d Bahnsen continued. \u201cIf one believes that greater investment will feed greater productivity, then one must favor greater savings, which is the sine qua non of investment.\u201d<\/p>\n<p>President Joe Biden sympathized with families facing higher prices in a Monday opinion piece for <a href=\"https:\/\/www.wsj.com\/articles\/my-plan-for-fighting-inflation-joe-biden-gas-prices-economy-unemployment-jobs-covid-11653940654?mod=hp_opin_pos_2#cxrecs_s\">The Wall Street Journal<\/a>. \u201cAmericans are anxious. I know that feeling. I grew up in a family where it mattered when the price of gas or groceries rose,\u201d Biden wrote. \u201cWe felt it around the kitchen table. But the American people should have confidence that our economy faces these challenges from a position of strength.\u201d<\/p>\n<p>Bahnsen added that Americans have not yet cut back on spending due to inflation; rather, they have only changed the composition of their spending.<\/p>\n<p>\u201cThe decline in the savings rate reflects the \u2018roll-off\u2019 of savings impact from the government transfer payments of just over a year ago,\u201d Bahnsen said. \u201cThe credit card use increase reflects the reality that temporary government \u2018stimulus\u2019 becomes permanent American spending very easily.\u201d<\/p>\n<p>Biden <a href=\"https:\/\/www.dailywire.com\/news\/inflation-is-the-key-political-problem-biden-powell-meet-to-discuss-taming-high-prices\">met<\/a> with Federal Reserve Chair Jerome Powell on Tuesday in an effort to support the central bank\u2019s moves to roll back its monetary stimulus. The Fed <a href=\"https:\/\/www.dailywire.com\/news\/the-fed-jacks-key-rate-up-half-point-as-inflation-surges\">hiked interest rates<\/a> by 0.5% earlier this month \u2014 the largest rate increase since May 2000 \u2014 in an attempt to curb rising price levels. The move followed a 0.25% rate hike from near-zero levels two months ago.<\/p>\n<p>However, Heritage Foundation research fellow EJ Antoni told The Daily Wire last week that \u201cthere is very little reason for consumers to think that price increases will somehow stop.\u201d<\/p>\n<p>\u201cWe have seen wholesale inflation \u2014 the prices businesses pay \u2014 outpace inflation at the consumer level for every month of Biden\u2019s presidency,\u201d he commented. \u201cThere are tremendous costs that have yet to be passed on to consumers, meaning much more inflation is already baked into the cake.\u201d<\/p>\n<p>As energy prices continue to rise, the new expenses will \u201ctrickle down to all goods and services across the economy, putting additional upward pressure on prices in the coming months,\u201d Antoni added.<\/p>\n<p>Indeed, Monday marked the <a href=\"https:\/\/www.dailywire.com\/news\/heres-how-much-gas-prices-have-risen-since-last-memorial-day\">highest Memorial Day gas prices<\/a> in more than a decade, according to data from AAA and the U.S. Energy Information Administration. Prices at the pump hit $4.62 per gallon on Memorial Day 2022 \u2014 53% higher than the $3.03 per gallon on Memorial Day 2021 and 136% higher than the $1.96 per gallon on Memorial Day 2020.<\/p>\n<p>Even before COVID-19 and lockdown policies suppressed driving demand at this time two years ago, gas prices were roughly $2.85 on Memorial Day 2019 \u2014 meaning that today\u2019s prices are 62% higher than equivalent pre-pandemic levels.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As rising price levels continue to pressure American families, many appear to be dipping into their savings to cover added costs. As inflation outpaces gains in income, Americans are spending beyond their means to cover their expenses. Households saved a slim 4.4% of their after-tax income in April \u2014 the lowest level seen since 2008, &#8230;<\/p>\n","protected":false},"author":99,"featured_media":1498876,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1498840","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1498840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1498840"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1498840\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1498876"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1498840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1498840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1498840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}