[odegaard]

$this->bbcode_second_pass_quote('OilFinder2', 'o')degaard I was trying to mimic your calculation.

I do not understand where you got the "95" from for spending for both the employed and unemployed. 95 what? Percent of something? Dollars?

Let's say you interviewed 100 people. 10% were unemployed, 90% were employed.

Income
The income of the 10 unemployed people would be 0 (assuming no income from anywhere).= $0 total
Let's say the average monthy income of the 90 employed people was $2000 = $180,000 total (90 * $2000)
-------------------------------------------------------------------------------------------------
Total income among the 100 interviewees would be $180,000

Consumption
Let's say the average monthly consumption expenditures of the 10 unemployed people was $1500/month = $15,000 total
Let's say the average monthly consumption expenditures of the 90 employed people was $1800/month = $162,000 total
--------------------------------------------------------------------------------------------------
Total consumption of the entire group would be $177,000

Since savings = income - consumption, we get:
Savings = $180,000 - $177,000 = $3,000

Since we're talking about the savings rate: $3,000 / $180,000 = 1.66% savings rate....

[Tyler_JC]

I think we could be missing an important point.

The top 20% of households earn about half of the income.

Their behavior has a much larger impact on the national savings rate than the behavior of the bottom 80%.

Moreover, unemployment benefits provide a much larger share of one's income for the bottom 80% than it does for the top 20%. And the top 20% is far less likely to lose their jobs in this recession compared to the bottom 80%.

The previous models were assuming perfect income equality which is obviously not the case.

If a person earning $200,000 a year goes from saving $40,000 to saving $80,000, that can swamp the impact of a few unemployed construction workers.

One of the biggest shifts, in my opinion, is the huge reduction in NEW consumer debt. Credit cards are being cut off. Middle/Working class people can't get access to new loans. Instead of spending 110% of their income, they are spending 100%. That also has a big impact on the savings rate.

If a $50K/year person goes from spending $55K to spending $50K, society has $5,000 less debt. Put another way, society has $5,000 more savings. Why shouldn't we count this as new savings? A decline in borrowing has the same net effect on society as an increase in savings. If I earn another $100 at work or my bills drop by $100, my standard of living improves by the same amount regardless of the reason.



Consumer debt, which had been growing rapidly, has stalled out.

We added roughly a trillion dollars a year in new consumer debt each year between 2002 and 2008. Now we aren't adding any new net consumer debt.

Households are rebuilding their balance sheets.

[vision-master]

$this->bbcode_second_pass_quote('', 'M')oreover, unemployment benefits provide a much larger share of one's income for the bottom 80% than it does for the top 20%. And the top 20% is far less likely to lose their jobs in this recession compared to the bottom 80%.

[Quinny]

$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('', 'M')oreover, unemployment benefits provide a much larger share of one's income for the bottom 80% than it does for the top 20%. And the top 20% is far less likely to lose their jobs in this recession compared to the bottom 80%.

[vision-master]

$this->bbcode_second_pass_quote('Quinny', '')$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('', 'M')oreover, unemployment benefits provide a much larger share of one's income for the bottom 80% than it does for the top 20%. And the top 20% is far less likely to lose their jobs in this recession compared to the bottom 80%.

[Ludi]

Looks like you might be just as likely to lose your high-paying job as your low-paying job.

"The job losses in this downturn are hitting workers across all income levels and job categories, and the cuts are swifter and broader than in past recessions."

http://www.cnbc.com/id/27597020

I'm trying to find statistics by income level, but so far, no luck.

[vision-master]

$this->bbcode_second_pass_quote('Ludi', 'L')ooks like you might be just as likely to lose your high-paying job as your low-paying job.

"The job losses in this downturn are hitting workers across all income levels and job categories, and the cuts are swifter and broader than in past recessions."

http://www.cnbc.com/id/27597020

I'm trying to find statistics by income level, but so far, no luck.

[vision-master]

How Young Engineers and Our Economy Are Betrayed

$this->bbcode_second_pass_quote('', 'T')he Georgia Dome, home of the Atlanta Falcons football team, was recently crowded with cheering fans and adrenaline-filled competitors. A thrilling competition crowned new champions.

But this was not a football game. It was a robotics competition for high school students interested in engineering, a program that now attracts about 200,000 student-competitors and nearly 100,000 volunteers.

Known as FIRST (For Inspiration and Recognition of Science and Technology), this program demonstrates that there is no shortage of American engineering minds. Started nearly 20 years ago by Dean Kamen, the inventor of the clever Segway, which officials scoot around on, this competition develops future American engineers.


The students are extraordinarily diverse, coming from public and private schools and home schools, rich and poor, urban and rural, athletic and disabled. Colleges provide up to $10 million in scholarships.

Obviously, there is no shortage of teenage interest and aptitude in engineering. But their prospects for good American jobs are very limited.

Large corporations prefer to use H-1B visas to hire foreign engineers and computer technicians. H-1B workers increased threefold during the Clinton administration, and CEOs are constantly demanding that the number be raised or even unlimited.

Large corporations prefer H-1B foreigners because they work for lower wages with fewer rights. A recent study by researchers at top business schools reported that H-1B visas depress wages for software engineers and programmers by as much as 6 percent.

The cumulative effect, as described by another study, depresses wages even more. Many U.S. engineers even lost their jobs just after they were required to train their foreign replacements.

[Ainan]

$this->bbcode_second_pass_quote('vision-master', '
')Many U.S. engineers even lost their jobs just after they were required to train their foreign replacements.

[MarkJ]

Employment status of the civilian population 25 years and over by educational attainment


Many overqualified job seekers, second job seekers, teenagers, semi-retired, retired, seasonal workers, immigrants and underground economy workers also compete for the unskilled jobs normally filled by uneducated workers during tight job markets.

[MarkJ]

$this->bbcode_second_pass_quote('', '[')url=http://www.theonion.com/content/node/30200/]Report: Poor People Pretty Much Fu¢ked[/url]

WASHINGTON—According to the results of an intensive two-year study, Americans living below the poverty line are "pretty much fu¢ked," Center for Social and Economic Research executive director Jameson Park announced Monday.

"Although poor people have never had it particularly sweet, America has long been considered the land of opportunity, where upward class mobility is hard work's reward," Park said. "However, our study shows that limited access to quality education and a shortage of employment opportunities in depressed areas all but ensure that, once fu¢ked, an individual tends to stay fu¢ked."

According to U.S. Census Bureau statistics, 34.6 million Americans were living below the poverty line in 2002.

"Not only are the down-and-out fu¢ked, but the number of down-and-out fu¢ks is growing," Park said. "Conditions of disadvantage are often passed from one generation to the next, making it especially difficult for young people to emerge from the cycle of poverty."

"Man, my heart goes out to those poor fu¢kers," Park added.


As a result, Park said, there are more poor people, and those poor people are much more screwed than poor people were a decade or two ago.

"As the split between the upper and lower classes grows, and the middle class continues to shrink, we're moving closer and closer to what can only be called a 'no way out, dude. Sorry, you're fu¢ked'-type situation," Park said. "Not only are the poor fu¢ked at the moment, but any chance they once had of changing their miserable lives is pretty much gone, too. Essentially, they're fu¢ked for all time."

[vision-master]

stold from latoc.
$this->bbcode_second_pass_quote('', 'I')MO its just more toying with us for fun and they see the suffering ex-middle class and ex-workers of america reach for a crust of bread and then they pull it away and have a chortle. oh plus they get to saddle the government with even MORE debt to the banks THEY own. Its all good clean globalist fun, didnt you know? http://www.globalistagenda.org/ One of these IMF con men even wrote a book saying how it was GREAT to be wayyy in debt to them and how it was making modern society possible by stablizing the monetary system with more and more debt bondage of the populace. Like signing away your life to the likes of the Mediccis and the Rothchilds is the essense of Democracy itself(isnt it?)http://www.amazon.com/Free-Nation-Deep-Debt-Financial/dp/0374171432. well ill say the elite certainly are bold, and i guess the soft heads of so many give them cause to be. id say this, dont ever think the the interests of the common people and middle class are often aligned with the elite, they arent, so trying to have us all live by the same economic rules "free trade" and unregulated banking (repeal of Glass-Steagal Act, the allowing of third party options trading and of course mortgage securtization and the ridiculous carbon cap and trade scam, among many others) is a foolish and doomed notion. The problem is most people wont educate themselves enough to properly understand the economic princuples that govern their very lives, and to their detriment they are surrounded by liars and conmen who are trying to prevent them from doing so at every turn. For the same reason that plantation owners in the pre 1860 southern united states would not teach their slaves to read, the american establishment does not teach the citizens of the nation to understand economics in anything but a preverted and self enslaving perspective so the masses cannot defend themselves from even the most absurd ideas they propose. Its time to break these chains or die trying because the road we are on now is truly one that leads to serfdom to borrow from von Hayek.

If you have never researched the history of banking i urge you to do so ASAP. Dont rely on one person. Be open minded. Realize that class warfare is alive and well and YOU are a combatant whether you like it or not. Our ancestors were very much more aware of the nature of elite persecution than most americans are today. They even had the notion woven into their fairy tales like the Wizard of Oz... THe Wizard of Oz, whats that got to do with banking you ask? What do you think Oz stands for but OUNCES! The book was written by progressive reformist journalist Frank Baum in the tradition of Jonathan Swifts Gullivers Travels which was also a political parable. The yellow brick road for the safety of the GOLD STANDARD and Dorothy's Silver slippers (yes in the book she had silver slippers)represented how silver let the common man conduct free commercial transactions in everyday life which helped create the american dream which was meant to be unburdoned by a credit card balance or subrpime mortgage. Savings were granted safety and interest with sound backing and silver coinage allowed transactions to execute at full value with no accrual of interest. Of course that sucked for the bankers but it was a lot better for the rest of us and for america.

The tin man, the scarecrow, even the lion all represented american political groups or actual figures in the lions case (see William Jennings Bryant). For more on the true nature of the wizard of oz see this link http://en.wikipedia.org/wiki/Political_ ... zard_of_Oz and for a good history of the origin of banking in the united states try this book Goldbugs and Greenbackshttp://en.wikipedia.org/wiki/ ... zard_of_Oz

[Tyler_JC]

The data are a few months old but you can still see the pattern.

Unemployment among the college educated (who make up the vast majority of the upper 20%) is around 4.5%.

Unemployment among those without high school diploma (who make up the vast majority of the bottom 20%) is around 13%.

Work hard, stay in school, and avoid the unemployment line.

Looks like the meritocracy isn't completely dead yet.

[odegaard]

$this->bbcode_second_pass_quote('Tyler_JC', 'U')nemployment among the college educated (who make up the vast majority of the upper 20%) is around 4.5%.

Unemployment among those without high school diploma (who make up the vast majority of the bottom 20%) is around 13%.

[vision-master]

$this->bbcode_second_pass_quote('Tyler_JC', '[')img]http://3.bp.blogspot.com/_8rpY5fQK-UQ/SbE2XIPnJoI/AAAAAAAAGFM/Vl7pEs-KqCk/s400/unemploymentbyed.png[/img]

The data are a few months old but you can still see the pattern.

Unemployment among the college educated (who make up the vast majority of the upper 20%) is around 4.5%.

Unemployment among those without high school diploma (who make up the vast majority of the bottom 20%) is around 13%.

Work hard, stay in school, and avoid the unemployment line.

Looks like the meritocracy isn't completely dead yet.

[odegaard]

$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('', 'M')oreover, unemployment benefits provide a much larger share of one's income for the bottom 80% than it does for the top 20%. And the top 20% is far less likely to lose their jobs in this recession compared to the bottom 80%.

$this->bbcode_second_pass_quote('odegaard', '')$this->bbcode_second_pass_quote('OilFinder2', 'o')degaard I was trying to mimic your calculation.

I do not understand where you got the "95" from for spending for both the employed and unemployed. 95 what? Percent of something? Dollars?

Let's say you interviewed 100 people. 10% were unemployed, 90% were employed.

Income
The income of the 10 unemployed people would be 0 (assuming no income from anywhere).= $0 total
Let's say the average monthy income of the 90 employed people was $2000 = $180,000 total (90 * $2000)
-------------------------------------------------------------------------------------------------
Total income among the 100 interviewees would be $180,000

Consumption
Let's say the average monthly consumption expenditures of the 10 unemployed people was $1500/month = $15,000 total
Let's say the average monthly consumption expenditures of the 90 employed people was $1800/month = $162,000 total
--------------------------------------------------------------------------------------------------
Total consumption of the entire group would be $177,000

Since savings = income - consumption, we get:
Savings = $180,000 - $177,000 = $3,000

Since we're talking about the savings rate: $3,000 / $180,000 = 1.66% savings rate....

[odegaard]

$this->bbcode_second_pass_quote('OilFinder2', 'A')s several people have pointed out here, in a recession employed people tend to spend less.

$this->bbcode_second_pass_quote('odegaard', '')$this->bbcode_second_pass_quote('OilFinder2', 'A')s several people have pointed out here, in a recession employed people tend to spend less.

[shortonoil]

Oily said:

$this->bbcode_second_pass_quote('', 'I')f the savings rate for ALL people is over 4%, and if we assume the savings rate for unemployed people is 0 or even negative, this means the savings rate for employed people must be quite high. In my little exercise last night I came up with an overall savings rate of just 1.66% with a large, negative savings rate for the unemployed, and a 10% savings rate for the employed. If, as the stats tell us, the actual overall savings rate is over 4%, this means the savings rate of the employed must be considerably higher than my 10% (and/or, the savings rate of the unemployed isn't so starkly negative).