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Location: Macroeconomics Unit II - Aggregate Demand and Aggregate Supply
Discussion: Why don't Americans save?
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kl_0511 |
40. RE: Why don't Americans save?
Mar 2 2008, 7:37 AM EST
It is just like what everyone is saying; there is a cultural factor. While Americans are more focused on the now Asians are more concerned about the future. And like Angel said another reason is because spending keeps the business cycle flowing. All the money saved would be worthless if inflation occurred. However, it isn’t great to constantly be in debt either. Thus, Asians prefer to save and have a secure future.
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HowardJing |
41. RE: Why don't Americans save?
Mar 2 2008, 7:56 AM EST
As everyone else is saying, it is basically cultural differences. Here is a brief anecdote:In Brooklyn, my friend has an XBox 360, PS3, and Nintendo Wii. Wow this guy must be rich right? Unfortunately that's not true. His family's credit rating is so bad that none of them can have credit cards :(. Apparently this means that he can't take the SATs because they require a credit card for payment. I am pretty sure my family is richer than my friend's family, considering I go to to a $20,000 a year private school. Nevertheless, the only console I own is a five year old PS2. I don't plan on buying a next generation console either even though my family has more than enough money. Why? I guess it's because Asians tend to save more than Americans. Do you find this valuable? |
julie.lin |
42. RE: Why don't Americans save?
Mar 2 2008, 8:59 AM EST
americans dont save has a little to do with cultural values and ethics, because Asians tend to have a higher marginal propensity to save than those of Americans. you can say what right or whats wrong, it all depends on people's personal values. I think the biggest cause of this is that because Americans pay a lot more taxes than do Asian countries in general, and because Americans are provided with benefits after their retirement. Asians don't have that as much. Thus, Asians have more needs to save more than Americans do, because they do not receive benefits as they reach old age.
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jinnykwon0314 |
43. RE: Why don't Americans save?
Mar 2 2008, 9:56 AM EST
The reason why I think that Americans don't save depends on their conception of spending money. In Asian countries, most have just become well-developed and many people still live in poverty in some places. Moreover, since American has been a developed country for a relatively longer period than Asian countries, it has experience in providing better welfare and pensions for the poor, whereas some countries are still improving on that task. Thus, for Americans, the concept of money is different and they do not see the vitality in saving up since they put more emphasis on the present rather than the future because there are well-organized elderly welfare systems that will be able to provide necessary living requirements. However, Asians have this theory that they MUST buy a house or buy land or save up lots of money in order to survive their future life when they won't be able to earn any money. I think that the whole issue is involved with the governmental system and the welfare system that influences the conception of spending and saving.
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jenniferchoi |
44. RE: Why don't Americans save?
Mar 5 2008, 4:28 PM EST
It seems like Americans give more priority in the present, while Asians like to save up for the future. In addition to what others have said, this, I think, also depends on the countries' economic stability. For example, in America people generally acknowleges that there always is up-and-down in the economy, and during its recession, knowing that the phase will one day be turned, Americans do not worry much about saving more. But in Korea, for instance, people save more and more becuase their economy is not as stable, and then want to prepare for such recession since they are not sure how bad the recession will be and how long it will last. So I think this is another reason why Asian countries have more marginal propensity to save.
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LauraGambineri |
45. RE: Why don't Americans save?
Jan 10 2009, 12:23 PM EST
The question "Why don't Americans save?," is very broad. Of course this is not a statement concerning all Americans, and not all Asians save much, but I do believe the majority falls into the given categories. Why Asians save more than Americans I cannot answer factual, but I am sure they are aware of their benefits in saving up for the future. That Americans spend more than they earn, and save less as their wages go up, does not have to do much with the "Americans". It goes through generation, if one family doesnt save money, the child is likely to do the same. Like others have mentioned before, the economics state plays a role in the savings of the people. If there have been no major problems in the past people tend to save less as the risk of loosing everything, and needing to go to the savings, is lower. The same goes for several problems hitting the economy that one is already used too. Of course one cannot say they are used to everything, but if recurring problems or several small block the system, one is not getting hurt. Saving is not an unknown word to the Americans, but it is one that is maybe less used. If all Americans would start saving up their money, and spending less on prodcuts, there would be short and long term effects on the economy. In the short run, products will decline in price, and sellers might end up with an overproduction. But if all/or most Americans would save more money and stop spending it, a long term effect would be business crashes. Sellers would not be able to sell the same amount as before, the production would have to be decreases, and a loss would be incounted as the costs like rent, and wages would still be the same. There are always consequences to saving and to spending; and the economy is affected no matter what. The fact that the Americans don't save might just be the reason why their economy is still going on.
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alexsvensson |
46. RE: Why don't Americans save?
Jan 14 2009, 11:54 AM EST
Just as most people have mentioned, I believe that it is a chiefly a cultural factor behind the fact that Americans tend to spend more than Asians. America is supposed to be a land of opportunities for many, and once people have earned a living, they also feel that they should be able to spend the money that they have earned from years of hard work. I also think that many Americans feel safe no matter what happens - that they are in some way isolated from the rest of the world. If you look at Asians they are perhaps more careful about spending their money, because they look at their neighboring nations, where government struggles could potentially make you lose a large amount of money. However, after the economic crisis, I think it will be harder for Americans to return to their previous state of consumerism, and perhaps pay a little more attention to how much cash is being taken out of their bank-accounts each day.
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JonathanRanstrand |
47. RE: Why don't Americans save?
Jan 25 2009, 12:29 PM EST
I agree with both Alex's and Laura's comments. There is perhaps a greater cultural tendency to save money (often for education) in Asia. It all comes down to two different groups of people with vastly different values. One factor I think may be important here though; in 1998 there was an economic crisis that swept through Asia, much like the current one but on a smaller scale. Do you think the tendency to save money might have increased because of that crisis, as Asians realized they could be financially vulnerable and wanted to have more of a "backup"? At the same time, there hasn't been as large a recession in the US in a long time, so perhaps US consumers have greater confidence in their economy and do not feel financially vulnerable?
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AlexHan |
48. RE: Why don't Americans save?
Feb 1 2009, 8:17 AM EST
hey good point. that's something I ddin't think of.Yea, Korea, as part of Asia went through a time of adversity back then and the Koreans still refer to that period as the IMF period. and that word still makes many businessmen shiver. This was also when Korean companies went bankrupt; like Daewoo. So yes, I think because of this history of a financial crisis, Asians are more cautious than Americans. Perhaps this also explains why American car companies aren't enthusiastic about cutting costs. Maybe they need to experience the consequences in order to realize the importance of minimizing costs in a time of recession. Do you find this valuable? |
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jordan_reid_zis |
49. RE: Why don't Americans save?
Feb 4 2009, 10:04 AM EST
It has always appeared like Asians are more organized and efficient than Americans in general, this extends into their financial existance. While americans like to display power by owning luxury over priced goods and live for the minute, Asians seem to save money which is not necessary for their imediate happiness. This means that when Americans choose to spend on things they may not need, Asians like to save. Correct me if i am wrong, but with the current financial climate, it appears that no one is really spending anyway.
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hannahbarkan |
50. RE: Why don't Americans save?
Feb 24 2009, 9:37 AM EST
I personally think that Americans spend more in comparisson to Asians because of the cultural. In America, there is such a incentive to spend on both big and small objects. Although, there are also lots of promotions and things to spend your money on in Japan, it is more acceptable to spend a lot in the US, with individuals often having more than one credit card, as well as teenagers having debit cards. Also advertising encourages us to spend. We are made to believe that we must have the object.
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BjornBorgers |
51. RE: Why don't Americans save?
Feb 25 2009, 12:36 PM EST
First of all, Americans tend to want to live the "American Dream", and own their own house, car, and have a family. One valid reason not to save however, one that most Americans probably do not think about, is that if you do not have much money saved, the taxes you must pay (over your near to non-existent savings) are a lot lower. Yes, one does pay property taxes, but why not have the bank pay those!? When you take out a loan for a house, it is theoretically owned partially by the bank until it is completely payed off. Therefore this also saves you money. So irronically spending as much as you can, can actually save you money... I however do not think that this is the reason that most Americans don't save. Maybe it's a different mentality in the east than in the west. In the east one works to enjoy life later, whilst the west feels that life's too short, so they should spend when it is possible and gives them utility...
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lailabrenninkmeijer |
52. RE: Why don't Americans save?
Feb 25 2009, 12:57 PM EST
I agree that it really has something to do with different cultures, backgrounds, and traditions. As mentioned before the people who have come to America and live in America tend to chase after the "American Dream" which is a fairly new idea compared to the pretty old background Asia has. Therefore I think that the Asians have more traditional values in which you don’t really focus on the short run but the long run. In western civilizations people tend to, although they do still save for the future, they might not push their entire money to the side there is also a tendency to live in the moment and live without any constraints. But this is also true for the Asians, so making a generalization that all Asians save would be misleading.
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AnastasiaLammer |
53. RE: Why don't Americans save?
Feb 27 2009, 3:12 AM EST
I think saving has alot to do with the culture one grows up in. There is countries/cultures like asia which see the importancy of saving of having money in the long run. The feeling of always living to the fullest when it comes to spending, is in my eyes not a comfortable living but there is others which use the prais live the moment. In that moment the saying most likely seems reasonable and gives the buyer satisfaction but in the long run this is what causes problems. to spend more money then there is. The western world focuses way to much on status symbols. Sadly we are all influenced by the media and the enviroment we life in. So if the person down the street drives a nice car the want of also driving this kind of car is big. Americans need to start learning and that saving has possitive effects on their living and taht one can not always have what they want.
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yaelburla |
54. RE: Why don't Americans save?
Mar 1 2009, 6:41 AM EST
One of the main reasons why I believe Americans are more inclined to spend money is due to the expectations and values people hold of America and the opportunities the country represents. While Asia is somewhat more traditional, America is constantly innovating and modernizing. They find new ways to promote different products and make them appear as more desirable or luxerious through advertising. America is very famous for the large display of logos on billboards and on Television; without advertising, and it those quantities, America is in some ways not really living up to their preconceived culture determined by people from all around the world. Known to have a great economy with amazing opportunities, America is not only in competition with Europe, but with itself as it strives to create new ways to superseed the next best product.
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NikiSpaniol |
55. RE: Why don't Americans save?
Mar 3 2009, 3:25 AM EST
Saving is so important because it gives the people that security that they need, in times where the economy isn't doing very well, just like now. Asians are very careful with their money because they can't or don't want to predict what will happen in the future. americans on the other hand are risk-takers. They spend their money without much concern about the future. Also as incomes do increase, maybe because of tax cuts, americans feel wealthier and therefore are more willing to spend money
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