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As shown by a study by the St Louis Fed, savings have been on a steady decline since the '80's, accelerating down, with the increase on the reliance of credit. When more of one's income is used to pay down debt, there is less to set aside as savings. Not only is it simple logic, it's simple math. When one has a finite amount of income, then it's uses must be prioritized. And, since unlike government, ordinary people have to pay their bills when due, higher credit debt, leaves less money for savings.
"Consumers have racked up more than $2.2 trillion in purchases and cash advances on major credit cards in just the last year. And it's become a habit for them to spend more than they have. The overall credit card debt grew by 315 percent from 1989 to 2006, according to public policy research firm Demos.
To compound the problem, fewer people are paying their credit cards bills on time. The percentage of people delinquent on their credit cards is the highest it's been in three years, according to CardTrack.com." CNN
The problem is not a lack of income, but spending beyond it.
__________________
John
Ontario 32 - Aria
Free, is the heart, that lives not, in fear.
Full, is the spirit, that thinks not, of falling.
True, is the soul, that hesitates not, to give.
Alive, is the one, that believes, in love. JCP
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