the low US saving rates has two sources, as far as I can see:
1) for working people, stagnant real incomes (especially if we use a
better, non-Boskinized measure of consumer prices) and increasingly
pressing needs pushed a lot of people to cut back on their saving --
and to increase their borrowing. This was facilitated by institutions
of easy credit, including "home equity loans" (i.e., 2nd mortgages)
based on inflated house prices.
(One way to look at this is that stagnant mass consumption is the
result of the recent neoliberal phase of US capitalist development. It
is then made up for by another side-effect of that phase:
_laissez-faire finance_.)
2) for richer folks, rising stock prices (especially in the 1990s) and
house prices (especially in the 2000s) were treated as a substitute
for saving part of income. This also got them into borrowing,
including leveraging financial investments (and low-cash-up-front home
loans). Here, borrowing was based on inflated asset prices rather than
on stagnant incomes.
Agreed neoliberalism and laissez-faire go hand in hand.
In addition to the two groups you mention, I would propose a third: the
middle class? I believe that they were whipped into a consumption frenzy
(funded by cheap credit) by the captains of consciousness. This took
the form an almost "panicked" buying of vehicles (the bigger and more
luxurious, the better), trailers, motor homes, snowmobiles, atvs, boats,
vacation properties, timeshares, vacations, and bigger and bigger houses
using ever more expensive materials and appointments. Most these people
may have treated real estate as a substitute for savings but none of the
other items were substitutes - in fact, they were "anti-savings"
because of high rates of depreciation (which I would consider a massive
waste of social resources !!)
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