According to the magazine, Global Finance, “Household saving rates as percentage of disposable income in the U.S. has declined from 7.3 in 1992 to a mere 1.7 in 2007, at the start of the financial crisis.” [54] People are squandering their savings and even increasing their debt to “stay in the game,” with the full endorsement of the advertising industry.
Such a negative savings rate has grave social and financial repercussions. It is a time bomb that will explode in times of crisis when our financial confidence is compromised. When a rainy day comes, we often find ourselves with little or no savings, yet we must still pay for the credit we received to fund needless consumption. When such a turn takes place, people stop their over- consumption abruptly, causing companies to cut their work forces. Then, state income from taxes drops and the crisis quickly escalates.