Almost Half of Americans have ZERO Savings

According to a new chart from Deutsche Bank’s Torsten Sløk, 47% of Americans save absolutely none of their income. This statistic has not changed much actually in the past few years. And the average saving rate in the United States, which began a precipitous decline in the 1980s, has started declining again after a short bump in 2012:

The falling saving rate is a worrying trend. A low stock of savings increases vulnerability to economic shocks. Expansionary economic policy has helped invigorate the economy by boosting consumption, through low interest rates. People save more during recessions—and more then businesses care to invest, leading to underutilised resources—so boosting consumption increases aggregate demand and jumps starts recovery. With saving rates already so close to zero, the government might have had better luck boosting the economy through its own dissaving, via deficit-funded stimulus, than through trying to encourage such behaviour in strapped households. And over the longer run, policies that discourage saving look foolish at current saving rates.

When you couple a shrinking savings percentage with the drop in Americans who have any savings at all, you get a pretty grim picture of our economic future. It is not just likely, but inevitable that the half of Americans who have no savings will be all too happy to steal from the small percentage of “hoarders” who have set something aside.

It’s like the fable of the grasshopper and the ant. Except for, in this version, the grasshopper votes for the exterminator, who trades the vote for a little strongarming of the diligent ant. The diligent ant has most of his savings stolen to feed the grasshopper and his kids, and so the ant decides it’s not worth it to save any more. Or work hard. And you end up all singing “March of the Volunteers” as Big Brother puts his boot in the face of humanity over and over again for the rest of time. You know, or something to that effect.

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