For 29% of Americans, There’s No
Such Thing as a “Savings Account”

BrokeThe U.S. economy was faced with severe liquidity issues during the financial crisis of 2008—not enough money in the financial system. Government bailouts poured in and the Federal Reserve’s quantitative easing followed. The main goal was to put money in the U.S. economy so people could borrow and consume again, creating economic growth.

Five years later, there are no signs of economic growth in this current U.S. economy. American job growth has not returned. Consumers and small businesses are suffering across the board. Dumping trillions of dollars into the U.S. economy (or should I say the way it was dumped into the financial system) has not worked.

A recent survey by Federal Deposit Insurance Corporation (FDIC) showed few facts suggesting that economic growth is here and that quantitative easing is effective.

According to the survey, 17.5% of the households used pawn shops because they could not get a small loan from a bank. (Source: FDIC, September 12, 2012.)

Keep in mind, it’s not only the poor who are using pawn shops; the “rich” people are using these services as well. There are pawn shops being opened in such unlikely areas as Beverley Hills. The people in those areas seem to need cash quickly these days and it’s bringing in huge profits for the pawn shop owners. (Source: ABC News, May 14, 2012.)

Other eye-opening findings from the survey, combined with all the other facts I have been writing in these pages, are certainly nothing for the U.S. economy to be proud of.

There are 10 million households in the U.S. that have no bank accounts—17 million adults! The number of households with no banks accounts has increased by 821,000 from last time the survey was done in 2009.

Out of 45,000 household surveyed, 29.3% do not have a saving account! People are not saving—they are living hand to mouth. People save and invest in periods of economic growth.

There is an increasing number of people using alternative financial services. One in 10 households has used two or more types of alternative services, such has payday loan outlets—a widespread increase in use between 2009 and 2011.

The stock market climbing does not mean there is economic growth. Sure, some economic data came in positive, but, on a grand scheme, not much has changed in the U.S. economy.

A huge chunk of the U.S. population does not have a savings account—if that’s any indication of future spending, it’s definitely dim. Consumption in the U.S. economy can only pick up when people have access to money, and they feel comfortable using it. All in all, there are more reasons for me to be doubtful about the U.S. economy and its growth prospects.