Peter Peterson, the founder of the Blackstone group is lamenting the lack of personal savings in the US. He says this is a bigger problem than the current recession. He may be right when he says that since there is no domestic savings, foreign countries holding our debt can hold our economy hostage.
Unfortunately he blames our attitude of “want it now” for out lack of savings. Here he is dead wrong. If you go and open a savings account these days you will find out two things.
1) You will likely pay a fee for having a savings account.
2) The interest rate you receive on your savings will likely be well below inflation.
Bottom line, when you save, YOU LOSE MONEY.
I don’t know about you but I can’t see why the interest rate on savings shouldn’t be some percentage of the loan rate, AND it should always be better than inflation. The banks are jerking us around, charging fees everywhere they can, keeping savings interest rates low, and now using our tax dollars to pay exec salaries and bonuses. Mr. Peterson has a lotta sand to sit in his fancy suit and talk to us about how bad we are for not saving.
Maybe in our little way by not saving we are telling the MARKET that we want change. But why should they change, if we don’t give them enough at the teller window, they’ll get it from our tax bill.
http://money.cnn.com/video/ft/#/video/fortune/2008/12/02/fortune.500.peterson.saving.fortune
I have never been a good “saver.” (Ask your wife about my teenaged-attempts at saving up to go to Europe.)
But then, I’ve never felt there was much incentive to save money; the interest you get is from another planet… a planet where you don’t get any interest.
Why do the banks charge us 22% on a credit card (where we’re “renting” their cold hard cash) but only give us a nickel’s worth back on a savings account (where they’re renting OUR cold hard cash). There aint no equity in that.
To receive any kind of decent interest you have to get a CD or something, which requires a fairly large amount to start with. So you have to save up before you can start saving. Yeah… that’ll happen.