Plutocratic Insurgency Note No. 2: 69% of Americans Don’t Even Have $1,000 in Savings

by Pamela Ligouri Bunker and Robert Bunker

Authors’ Comment: Plutocratic insurgency represents an emerging form of insurgency not seen since the late 19th century Gilded Age. It is being conducted by high net worth globalized elites allowing them to remove themselves from public spaces and obligations—including taxation—and to maximize their ability to generate profits transnationally. It utilizes ‘lawyers & lobbyists’ and corruption, rather than armed struggle—though mercenaries may be employed—to create shadow governance in pursuit of plutocratic policy objectives. Ultimately, this form of insurgency is representative of the challenge of 21st century predatory and sovereign-free capitalism to 20th century state moderated capitalism and its ensuing public welfare programs and middle class social structures. It can be viewed as a component of ‘Dark Globalization’ that, along with the emergence of criminal insurgency, is now actively threatening the public institutions and citizenry of the Westphalian state form.
Key Information:  Cameron Huddleston, “69% of Americans Have Less Than $1,000 in Savings.” GoBankingRates. 19 September 2016, https://www.gobankingrates.com/personal-finance/data-americans-savings/.

Americans are falling short when it comes saving money—specifically, setting aside money in savings accounts—to create a financial cushion. In fact, they’ve gone from bad to worse, according to GOBankingRates.com’s latest survey findings on savings amounts.
In 2015, we asked more than 5,000 adults how much they had saved in a savings account. The results were startling: 62 percent said they have less than $1,000 in savings.
Recently, GOBankingRates asked the question again, this time to more than 7,000 people to see if Americans’ saving rates have improved in the last year or so. But the results are even more surprising—the percentage of Americans with less than $1,000 in savings has jumped to 69 percent…

Key Information: Sean Williams (Motley Fool), “Nearly 7 in 10 Americans have less than $1,000 in savings.” USA Today. 9 October 2016, http://www.usatoday.com/story/money/personalfinance/2016/10/09/savings-study/91083712/.

The U.S. is often referred to as the land of economic opportunity. Apparently, it’s also the land of consumption and “spend everything you've got.”
We don’t have to look far for confirmation that Americans are generally poor savers. Every month the St. Louis Federal Reserve releases data on personal household savings rates. In July 2016, the personal savings rate was just 5.7%. Comparatively, personal savings rates in the U.S. 50 years ago were double where they are today, and nearly all developed countries have a higher personal savings rate than the United States. In other words, Americans are saving less of their income than they should be—the recommendation is to save between 10% and 15% of your annual income—and they’re being forced to do more with less in terms of investing…

Key Information (Archival):  Elyssa Kirkham, “62% of Americans Have Under $1,000 in Savings, Survey Finds.” GoBankingRates. 5 October 2015, https://www.gobankingrates.com/savings-account/62-percent-americans-under-1000-savings-survey-finds/.

Having a savings fund is one of the keys to financial health. Yet trying to save is a struggle, especially because the biggest money challenge for Americans is sticking to a budget — a central skill to ensure enough money is left over each month to save.
“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” said Cameron Huddleston, a personal finance expert and columnist for GOBankingRates. “It suggests that they likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends, and family, or even their retirement accounts to cover unexpected expenses.”
Survey Finds Two-Thirds of Americans Don’t Have Enough Money Saved
The overall results from the survey show that 62 percent of Americans have less than $1,000 in their savings accounts, and a third of those under-savers have no savings account at all. The portion of savers with balances over $1,000 is 29.1 percent.
The most frequently selected amount that people say they have in savings is also the lowest $0; 28 percent of people selected this answer. Even worse, the next-most-common answer is “I don’t have a savings account,” selected by one in five people (20.7 percent)…

Key Information (Archival):  Maggie McGarth, “63% of American’s Don't Have Enough Savings to Cover A $500 Emergency.” Forbes. 6 January 2016, http://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#655f9b996dde.

The car brakes go on the fritz. The refrigerator stops refrigerating. The dog gets his paws on a batch of chocolate chip cookies and earns himself a trip to the vet ER.
These are just three of any number of things that could go wrong during the course of the year. Recovering from any one will set you back about $500, which means these scenarios fall closer to the "undesirable inconvenience" category than they do the "massive calamity" one. And yet, nearly two-thirds of Americans do not have enough money in savings to cover the cost of a single one of these unplanned expenses.
According to a brand new survey from Bankrate.com, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.

Key Information (Archival):  Tim Worstall, “It’s Simply Not True That Most American’s Don't Have $1,000 In Emergency Savings.” Fortune. 14 January 2016, http://www.forbes.com/sites/timworstall/2016/01/14/its-simply-not-true-that-most-americans-dont-have-1000-in-emergency-savings/#3064d8d32db4.

I read Salon, yes, apologies, a dirty little secret. I do so because I love the intellectual challenge of working out why they've managed to grasp the wrong end of the stick on any economic issue. It's a bit like reading the opinion columns of The Guardian: you know they’re wrong, the fun is in attempting to work out why and how on this specific point…
It’s an interesting observation that most Americans have little in their checking and savings accounts. But to draw from that the opinion that the middle class doesn't exist is to be entirely wrong. The correct conclusion to draw is that these people are indeed middle class in a country with a well functioning financial system. Because of this they don't need savings because they have access to credit.
And if we’re honest about it credit and savings are economically the same thing. They’re both ways of gaining access to emergency funding. That one is not consuming now so as to be able to consume in an emergency, the other not consuming in the future to be able to consume in an emergency makes no difference economically…
And this of course has its public policy point. That most Americans don’t have $500 or so of “savings” as conventionally defined simply doesn't matter. Because near all Americans have access to $500 of credit and thus are able to consume in such emergencies. And, as ever in the study of things economic, it is consumption which is the important point of it all. If people can consume in emergencies it doesn’t matter whether that is through savings or credit.

Who:  A representation of the U.S. internet population throughout all 50 states and Washington, DC. A margin of error of 1.70 percent exists for the 2015 survey consisting of 5,006 responses and a margin of error of 2.6 percent exists for the 2016 survey consisting of 7,052 responses.
What: Google Consumer Surveys conducted by GoBankingRates.com concerning how much money respondents had in their savings accounts.
When:  The surveys were taken 11-13 September 2015 and 1-9 August 2016, respectively.
Where: The surveys were conducted by means of the internet with respondents who live within the United States.
Why: The website GoBankingRates.com conducted the surveys in support of its business strategy of having readers go to the site to a) get competitive interest rate information on financial services found nationwide and b) find out about informative personal finance content, news, and tools.  The surveys represent both a public informational service and a newsworthy marketing tool that will steer more users to the website.
Analysis: The surveys identify a downward trend in personal savings rate for the American public. In 2015, of those surveyed, 62% have less than a $1,000.00 in savings while in 2016 this number rose to 69% of the respondents. No GoBankingRates.com personal savings rates data existed prior to the 2015 survey. At the other extreme of those surveyed in 2015, 14% had over $10,000 in savings—that rose to 15% in 2016 which may be suggestive of a gradual shift towards the class polarization between those at the top and bottom of American society. The 69% rate of respondents with less than $1,000.00 in savings is indicative of the growing underclass of working poor in the United States (see Further Reading). Some of the themes found in the later news articles commenting on the 2016 survey are troubling. First, they equate the fact that the mass of working poor Americans are simply living beyond their means and do not have responsible spending habits. While this may be partially accurate, those same Americans are being bombarded by corporate marketing ads to get them to purchase their products—much of which is initially funded by low to no interest rates on the credit extended. Additionally, for many middle class Americans, it is now basically impossible—given the demise of many public entitlement programs and services—for them to provide for the basic needs of their families without going deeper and deeper into debt. Second, access to credit does not equate to having money in one’s bank account.  This egregious theme is tied to the article written by Tim Worstall in Fortune. This can be seen with the pronouncement “That most Americans don’t have $500 or so of “savings” as conventionally defined simply doesn't matter. Because near all Americans have access to $500 of credit and thus are able to consume in such emergencies.” That he equates working and middle class access to credit—which represents taking on additional personal debt—as economically the same as having savings is beyond ludicrous. He essentially advocates a ‘pay day advance’ solution for Americans facing financial emergencies such as securing medical services for their children or obtaining heating oil for their rented housing in the dead of winter. While this trend towards the hollowing out of individual American savings is of concern, the fact those same Americans are being blamed for their dire economic situations should be as equally concerning. It is suggestive of a shift within the United States from state moderated capitalism that protected its citizens for decades to an emerging predatory capitalist form that is actively and efficiently extracting wealth from them to satisfy corporate and plutocratic earning sheets. In some ways this is reminiscent of the old company town model found in the United States—although, in this case, it is expanding writ large across the country.