Tag Archives: savings rate

The US Savings Rate Under Each President Since Ronald Reagan (Charts)


There has always been something of a fractured truth about the president’s role in the economy and wealth of the United States. Like a quarterback in the NFL, when things go right they get too much of the credit and when things go wrong they get too much of the blame. Because economic policies tend to lag most presidents spend their first term under the echoes of the previous president’s economic policies and not until their second term (if they get one) do you see potentially their own policies being felt. Never mind the impact that Congress also plays in setting economic rules and regulations, especially as it relates to the tax code. Lastly, the greatest wielder of any economy is the central bank or in this case the Federal Reserve. Unfortunately, we often force our perception to be reality.

In good times, Americans have notoriously under saved and conversely in bad times find it hard too save. Culturally, Americans have never been a country of savers. Some argue this has been a result more and more in recent generations of the societal safety nets in place that discourages savings behavior. There is some truth to this when you see countries in Asia where savings rates can be upwards of 30 percent arguably because there is no social security or government assistance of any sort if something were to happen. How a culture views debt and values possession can have an acute influence on households emphasis on savings.

So what exactly is the savings rate? Investopedia defines the savings rate as, “The amount of money, expressed as a percentage or ratio, that one deducts from his/her disposable personal income to set aside as a nest egg or for retirement. The cash accumulated is typically put into very low-risk investments (depending on various factors such as expected time until retirement), like a money market fund or a personal IRA comprised of non-aggressive mutual funds, stocks and bonds.” No president over the past 35 years has enjoyed a higher savings rate than Ronald Reagan at 12.7 percent and no president has enjoyed a lower savings rate than George W. Bush at 1.9 percent. Both, largely could be explained by the aforementioned Federal Reserve policy of interest rate movement. The Federal Reserve during Reagan’s tenure held interest rates in the healthy double digits, while the Federal Reserve during George W. Bush’s tenure in office were pushed toward near zero.

RONALD REAGAN (1/20/1981 – 1/20/1989)

Highest – 12.7% (November 1981)

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Lowest – 3.8% (April 1987)

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GEORGE H.W. BUSH (1/20/1989 – 1/20/1993)

Highest – 9.9% (December 1992)

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Lowest – 7.1% (August 1989) Screen Shot 2015-05-01 at 5.49.59 PM

BILL CLINTON (1/20/1993 – 1/20/2001)

Highest – 8.4% (December 1993)

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Lowest – 3.5% (December 2000)

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gEORGE w. BUSH (1/20/2001 – 1/20/2009)

Highest – 7.9% (May 2008)

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Lowest – 1.9% (July 2005)

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BARACK OBAMA (1/20/2009 – Present)

Highest – 10.5% (December 2012) Screen Shot 2015-05-01 at 5.53.38 PM

Lowest – 4.1% (December 2013)

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Source: St. Louis Fed

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HBCU Money™ Dozen 4/27 – 5/1


NobsDozen

Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure. We have made some changes here at HBCU Money™ Dozen. We are now solely focused on research and central bank articles from the previous week.

Research

Can a startup democratize big data apps? l CIOonline http://trib.al/61vRnQ4

Massive China market offers even more upside for Apple l NetworkWorld http://bit.ly/1DNmdCW

What third-party app crashed American Airlines pilots’ iPads, causing delays? l Computerworld http://ow.ly/Mme2m

Containers vs. virtual machines: How to tell which is the right choice for your enterprise l Networkworld http://bit.ly/1JEpDPb

Block Island Wind Farm Set to Start Spinning Next Year l RI Sea Grant http://ow.ly/MmeSx

Broadband is like a river (but not the way you think) l Computerworld http://ow.ly/MmgoS

Federal Reserve, Central Banks, & Financial Departments

Lessons from #Ebola for the world’s #health systems l World Economic Forum http://wef.ch/1G9DzzB

Fannie, Freddie could cost taxpayers $157.3 billion in a crisis l Housing Wire http://hwi.re/9cgjWF

4 #museums that will boost your financial literacy l Council 4 Econ Ed http://buff.ly/1DIiaaV

A theory of what determines market liquidity and how liquidity evolves over time l NBER http://bit.ly/1AlsRyR

Personal saving rate dips to 5.3 percent from previous month’s 5.7 l St. Louis Fed http://bit.ly/1QPLyow

77 out of 155 countries measured do not have adequate poverty data: l World Bank http://ow.ly/Mmis4

Thank you as always for joining us on Saturday for HBCU Money™ Dozen. The 12 most important research and finance articles of the week.

HBCU Money™ Dozen Links 8/26 – 8/30


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Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure. We have made some changes here at HBCU Money™ Dozen. We are now solely focused on research and central bank articles from the previous week.

Research

It is better to give HIV-positive babies prompt drug treatment than to delay l New Scientist http://ow.ly/or2mn

NSA broke into UN video teleconferencing system l ComputerWorld http://ow.ly/or2p7

A new understanding of an enzyme may lead to more effective antibiotics | Argonne http://today.duke.edu/2013/08/mray

Nearly 40,000 New Green Jobs Created Across America During 2Q 2013 l Clean Technica http://dlvr.it/3tYhtP

Any interested in SLAC internships, here’s a nice recap of a few of our programs l SLAC http://stanford.io/14KvZYD

Teach middle/HS in DC? Apply for Nifty Fifty Program & host 1 of our scientists at your school l EPA Research http://ow.ly/or2Dx

Federal Reserve, Central Banks, & Financial Departments

Real estate loans at all commercial banks declined 0.2% in July to $3.53 trillion l St. Louis Fed http://bit.ly/1foRjUW

Personal saving (as % of disposable personal income) was 4.4% in July, the same as in June l St. Louis Fed http://bit.ly/17oOZfy

Luxury builders better positioned in rising rate environment l Housing Wire http://hwi.re/3tZYxp

Kenya & Nigeria account for 62% of Internet users in Sub-Sah l World Bank http://wrld.bg/onGMK

Housing communities suffer from influx of renters l Housing Wire http://hwi.re/3tYXCK

What will happen when foreign lending to the United States stops? l Minnesota Fed http://bit.ly/195R0gb

Thank you as always for joining us on Saturday for HBCU Money™ Dozen. The 12 most important research and finance articles of the week.