Geithner Still Claims Savings Rates Are Up. Savings Rates Still Ain't Up.


Treasury Secretary Tim Geithner, speaking in India:

While unemployment remains unacceptably high, the private sector has added jobs during four of the past five months, private investment is increasing, productivity growth is very high, the financial system is recovering, private savings have improved and our economy is now borrowing significantly less from the rest of the world.

Actual personal savings, per Bureau of Economic Analysis:

Personal savings: A rocky road down.

From February 2009, the first full month of the Obama Administration, to February 2010, the personal savings rate fell by more than one full percentage point. February 2010 is the most recent report from BEA. Had we included January 2009, the last month of the George W. Bush administration, the drop would be even more precipitous. In that month, the savings rate was 5 percent.

(I have not been able to locate the BEA report for December 2009. The placeholder 4 percent figure was derived by averaging November's 4.7 percent and January's 3.3 percent.)

None of these numbers are terribly high, so perhaps Geithner means personal savings are increasing over a longer window. There is a popular though incorrect belief that U.S. savings rates went negative in the middle of Decade Zero, so perhaps this is why the Treasury secretary never gets questioned on this point. In reality, the average personal savings rate over the past year has been about where it was during Bush's tenure, and well below where it was during the Clinton Administration:

Americans don't save anymore. Just admit it.

Geithner should explain what he means when he claims that "private savings have improved." Or he should stop claiming it.

Patriotic coverage of Geithner's visit:

NEXT: Pot Prohibition As Farm Aid

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Health insurance company gets flooded with the inquiry: “Where do we get the free Obama care?”


    1. Also: CBO says debt is unsustainable, but Elmendorf still totally cool with the numbers for Obamacare, even though they were totally cooked. But since every other major bill is also cooked… it’s okay!

    2. For what it’s worth, I don’ think that discussion is completely out of context here.

      I think ObamaCare really was poorly timed in terms of where we are in the cycle, and I think we’d have to be nuts not to think it has made companies more reluctant to hire.

      1. It’s all related, I think. When you look at our future tax burden (for they will raise taxes before they cut entitlements), the question of disposable income and savings is definitely a factor. Mostly because we won’t have any.

        1. That’s why I believe that not only will a national VAT wreck our already fragile economy, I don’t think it will even raise as much revenue as the so-called elites think it will.

          1. It really can’t. How can you buy things when you don’t have any money?

            For some common sense…

          2. In the short run, VATs do gush some quick cash, but it is unsustainable (see EU). Since consumers don’t see the immediate effects, save a minor increase in goods and services (assuming only a VAT is applied) it would be bitched about for a period of time, then accepted since once a VAT is place, its like herpes.
            Only when the destructive aspects of such a hidden tax, and I prefer to regard it as a tax on merely existing either business or individual, are demonstrably seen in the economy is when it’s too late.

            Applying a VAT without repealing the income tax is a guaranteed free market killer. Gotta burn the village to save it.

          3. It won’t, history shows that Federal tax receipts have only ranged between 17 and 22% of GDP since WWII. That takes into account wild swings in the tax rates from a high of 91% to a low of 28%.

            Americans simply won’t provide that amount of resources to Washington regardless of the tax rate. The left seems to think we will swallow higher taxes without considering our relentless attempts to avoid them. Even the wealthy who demand they and other aristocrats be taxed more don’t consider that their fellow rich don’t behave so submissively.

            1. The wealthy who bitch disingenuously that they “don’t pay enough in taxes” are shitbags of the highest order. They are free to fork over to the government their cash at anytime; you can be sure the government won’t refuse it. Better yet, they are free to rent a blimp and dump money on a crowd people if they so choose.
              It’s a hypocritical and false sense of moral superiority.

          4. Is Washington really proposing a VAT or is this just theoretical? I must have missed something..

  2. Gee, bureaucrats seeing what they want to see? Using stats in the media in the run up to an election?

    It’s hard to believe somebody would do something like that.

    The statement that “productivity growth is very high” can be read more than one way too, but I don’t think very many people think that “productivity growth” here is a sign of a healthy economy…

    Right now, that probably just means there have been a lot of layoffs.

    1. Soviet industry is buildink more tractors!

      1. Make big tractor for moose and squirrel?

  3. “There is a popular though incorrect belief that U.S. savings rates went negative in the middle of Decade Zero, so perhaps this is why the Treasury secretary never gets questioned on this point.”

    The reason why is that they revised the historical data set this last year. It had been previously reported that the savings hate had gone negative multiple times.

  4. When’s the last time Timmy told the truth about anything?

    I still want to see him indicted for the AIG bailout. I think that might make me as happy as the Spitzer scandal.

    1. It’s close, but the Spitzer still wins out for me because of the Swallower pics.

      1. This still brings me endless joy.

  5. Treasury Secretary Tim Geithner, speaking in India:

    (SugarFree’d-link alert)

  6. Timmeh and Ben should be sharing a prison cell. These two make Madoff look like a chump.

  7. Geithner should explain what he means when he claims that “private savings have improved.”

    It’s the introduction to the Opposites!

  8. Anecdotally speaking, my savings are gone. Shut the fuck up, Timothy Geithner.

  9. Speaking of lies:

    In what sense is “our economy now borrowing significantly less from the rest of the world”?

    1. In the sense that China is not part of the rest of the world.

    2. The same line of economic policy of “We are budgeted for X amount of deficit, but since we spent X-Y=Z, with Y being lesser deficit spending and Z still being a deficit, we saved money! Z proves it!”

  10. In the sense that less is more

  11. Somebody check to make sure he pays his taxes while he’s over there…

  12. Hey the rate at which savings are decreasing has slowed down. That’s an improvement!

    1. Is that your real hair?

      1. Hey the rate at which I’ve been losing hair has slowed down. That’s an improvement!

        1. Looks like an artificial stimulus, if you ask me.

          1. My hair is too big to fail!

  13. Yeah, India’s new banking rules just made it more difficult for my Indian employers (freelance) to pay me in a timely manner. Whatever those rules are, I’m decidedly NOT a fan.

  14. I think the take-home lesson here is sweet zombie Jesus, that first newscaster is super hot.

  15. Damn, I just couldn’t understand the accent. it’s been 20 years since I’ve been in college.

  16. Toxic Timmy was there to assure them that there really IS enough gold in the bullion banks to cover all of their crap paper gold, and to beg them NOT to demand delivery on their gold.

  17. Hey, look at a graph of prime rate over the same time period. What do you know, when interests rates are higher, money is actually worth saving, and saving rates are higher. When rates are lower, money isn’t as valuable over time, and saving rates go down. Connection?

    I would look at this graph:…..story.htm.

  18. while you are technically correct, the low was 1.2% in 2008Q1, you neglect to consider that this EXCLUDES mortgage interest. Once that is factored in I’d say there is a good chance it was negative for more than a few quarters.

  19. Indian girls are hot.

  20. Geithner should explain what he means when he claims that “private savings have improved.”

    Very well: I mean my private savings have improved.

  21. 1. Why the fuck is he talking to india about our economy? How much does a completely pointless trip like that cost?

    2. Per-SO-nal Saaa-vings? What language is that?

  22. wylie, you racist son of bitch. At least they bother to learn english unlike you Americans who can’t even speak your own language properly.Now go fuck your mother you inbred, redneck son of a bitch.

    1. Big tough guy behind your keyboard, aren’t you? You wouldn’t have the balls to say that in person because you know you’d need a full set of new teeth afterward. Whelp.

  23. Basic economics: Lower price ceiling on interest rates = lower savings than otherwise + higher borrowing than otherwise. So of course with the Fed dropping rates the savings rate was going to be depressed unless some other factor compensated.

  24. What you fail to understand is that Geithner isn’t talking about the savings rate for the average American nor is he talking about savings over a longer period of time. When Geithner says that personal savings have improved, he’s talking about the savings of people who work on Wall Street. People like himself.

  25. Geithner should save the erroneous claims for his tax returns.

  26. There is a popular though incorrect belief that U.S. savings rates went negative in the middle of Decade Zero, so perhaps this is why the Treasury secretary never gets questioned on this point.

    James Hawk

    Savings Account Rates

Please to post comments

Comments are closed.