Above-median income and close to zero saving

Tuesday, March 28th, 2017

There is a significant portion of the population with above-median income and close to zero saving, Arnold Kling notes:

I think it is hard to tell a story that explains that in terms of rational behavior. Remember, we are talking about a lot of people, not just a few random exceptions.


  1. Alrenous says:

    So, valuing status highly. See also: cognitive transaction costs.

  2. Rollory says:

    “I think it is hard to tell a story that explains that in terms of rational behavior”

    I think it is far more likely that Mr. Kling has simply failed to grasp something very basic.

  3. Kirk says:

    Hmmmm… Lemme see: Interest rates have been damn near zero for how long, now? And, the benefit to saving is…?

    The wonder isn’t that these people aren’t saving money in the banks, the wonder is that anyone is saving money anywhere in the economy.

    I sometimes wonder if these genius types making these pronouncements have the brain power to get out of their own way, walking through doors. It sure doesn’t seem that way, listening to them pronounce “wisdom” on whatever they decide to talk about.

    I mean, it isn’t like anyone has really been incentivizing anything like saving for the future, now is it? Instead, the decisions made in the government and all the rest of society press for more spend, spend, spend, while not doing a damn thing to say anyone ought to be saving for a rainy day. What is the message of the mass media in popular culture? Is anyone making rap songs about putting ten bucks a week into a bank account, or are they all talking about how to blow your wad on champagne and high living?

  4. Wan Wei Lin says:

    Money in a fire proof safe at home is getting the same interest as the bank for the most part plus it’s available 24/7. Security and accessibility have more value than interest these days.

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