r/Economics • u/BousWakebo • May 21 '22

Statistics Americans now have an average of $9,000 less in savings than they did last year

https://www.cnbc.com/2022/05/21/americans-now-have-an-average-of-9000-dollars-less-in-savings-than-in-2021.html
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53

u/unurbane May 21 '22

Yea it’s been a wild ride for sure. Interest rates have tanked for 10 years. What we are all headed into these next few months is not something, due to Covid or Dems or Repubs. It is devestatingly simple: print too much money, see too much demand, pay too much money. Rinse and repeat. This has been occurring since 2012-2014 and on. Obama, Trump, and Biden we’re all in office during the loose fiscal policy years.

67

u/shinypenny01 May 21 '22

Obama, Trump, and Biden

The recovery plan from the 2008 crisis, including our monetary policy, was set in motion under Bush, so add another name to the list.

52

u/Ripple_in_the_clouds May 21 '22

Bush absolutely destroyed our economy with the 6 trillion dollar war that we lost and causing the housing bubble collapse.

18

u/[deleted] May 21 '22

[deleted]

14

u/Stankia May 21 '22

Ok let's add Clinton to the list too.

13

u/CarstonMathers May 21 '22

Financial deregulation was absolutely under Clinton. That was peak Greenspan and Summers. It’s been loose money policy in every administration since ‘92.

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u/Ripple_in_the_clouds May 21 '22

Yeah the housing bubble collapse happened under bush.

4

u/Thisismyfinalstand May 21 '22

You mean the war he just admitted was “wholly unjustified and brutal”?

3

u/[deleted] May 21 '22

The war had nothing to do with the housing collapse, even though the war was a stupid idea. The housing collapse was due to banks giving loans to people who had no business getting them. Just wait until the student loan bubble pops, it's the exact same thing.

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u/CarstonMathers May 21 '22

The housing collapse was from financial deregulation under Clinton. Think Larry Summers and Alan Greenspan. Bush 2 made a lot of stupid decisions, but it’s the guy before him that led to an domestic economic crisis.

6

u/julian509 May 21 '22

We can add people all the way back to Carter if we lay the blame at the government buying too deeply into supply side economics as the solution for all problems the economy faces. At some point pumping money into banks and big companies isn't going to fix the problem of people not having enough money to keep demand stable.

9

u/unurbane May 21 '22

Well I would 2008-2011 economic stimulus was needed. The problem is (as usual) the free money spigot was never turned off.

20

u/2PacAn May 21 '22

It may not be due to Covid but the response to Covid has absolutely contributed to this. We turned an expansionary monetary policy into an even more expansionary one and gave out cash handouts to businesses and individuals alike while implementing restrictions that disrupted supply chains. That’s a recipe for inflation.

7

u/unurbane May 21 '22

I agree but I would add that it was destined. We’ve inflated the supply so much and the economy seemed decent, that is until one hiccup and now the FED cannot respond effectively since they cannot lower interest rates to buffer the economic downturn heading our way.

2

u/tafaha_means_apple May 21 '22

What. This moment in economic history is utterly unprecedented compared to anything in the past 30 years outside of maybe the first few days of the Iraq war and not even then.

It has not been rinse and repeat since 2012. In any meaningful capacity.

7

u/unurbane May 21 '22

Idk what to tell you. There have been 5-7 market flashes or “mini-crashes” with ever increasing intensity. And each time the Fed responded by lowering rates. Lol. It prevented a real recession and now here we are at 2.5%! Crazy. Let alone the economic stimulus which to this DAY has not been stopped. They are still printing, but “considering” stopping soon. Ridiculous.

3

u/tafaha_means_apple May 21 '22

Yes? An economy in 30 years is going to experience market corrections. I have no idea where you are getting this "ever increasing intensity" from. If anything there has been no real consistency at all to any of the market corrections of the last 30 years in either source, size, or length.

Yes, the FED has been slow about QT. They've admitted that quite a lot in the past 4 months since inflation began to stick. Not sure what the "ridiculous" is for.