Good News

Wow.  What can you do with headlines like “Economy Goes From Bad to Worse”.

I’ll tell you what.  Fight back with some good news.

Sundays are a good day for Good News.  After all, it’s the one day of the week dedicated to goodness.

So here’s some to think about: according to a recent AP story (”Economy’s Plunge is Worst in Quarter of a Century” by Jeannine Aversa, AP Economics Writer, Fri Jan 30):

“Americans’ savings rate rose to 2.9 percent in the fourth quarter. That was up from 1.2 percent in the third quarter and matched the rate in early 2002, when the country was still struggling to recover from the 2001 recession.”

This story was actually pretty dismal, and the above was in the context of being a bad thing.  But this little tidbit, buried at the end of the story, is GREAT news! In our enormous economy, a sudden 1.7 percent increase in the savings rate must be a GINORMOUS amount of money.  2.9% in one quarter represents an annual savings rate of 8.7%.  That’s pretty good - and getting closer to that magical 10% savings of annual income that “experts” recommend.

Saving money is good for the economy.  Saved money can be lent out for building businesses and homes - long term assets that build the economy.  Spending is what got us into this mess.  Maybe saving the stuff will get us out.

P.S.  Also, keep things in perspective.  That recent crash landing on the Hudson?  I’m pretty sure that not one person on that plane was agonising over their tanking portfolios or their upside down mortgages as they were falling towards that icy water.  They got a second chance, and so will all of us.  Things will get better.