Much is made of the Chinese savings rate vs. the American savings rate. The Chinese save so much, while Americans save so little, boo hoo. The real questions are: what do people do with their savings, where are savings made, who saves, how is capital allocated, who is planning what? We live in a consumer economy. It is not a saver economy, and our leadership does not want a saver economy. Americans are not encouraged or suppose to save. The FED's policy of inflating away debt is a tightrope walk between keeping commodity prices low for Americans while pleasing our creditors to avoid sparking hyperinflation. It isn't too much of a tightrope though because America has few savers, so destroying savers is a winner domestically. Step outside your circle and look at the market economy at generational lows for labor participation, all time highs for food stamp usage and a median income stagnant for decades. Americans save so little because our corporations save and allocate capital for our economy.
Americans have a tiny savings rate that has decreased over decades as debt has accumulated. In reality, even when Americans were saving a decent amount of money decades ago, a large portion of it was saved by the upper classes (top 20% + accredited investor types). Today, corporations are sitting on enormous cash reserves. They plan and invest with the national economy's savings. With the birth of the FIRE economy in the early '80s, Americans also pushed more capital into assets like real estate, stocks and bonds. Your savings is handed over to corporations to allocate. With the rise of the FIRE economy, the income slid from productive economic sectors straight to finance, real estate and insurance companies. This is also another feature to the consumer, FIRE economy. There is no incentive to save with bank book rates hovering around inflation for 20 years. How many advertisements do you see that recommend saving money? Auto-saving bank cards that round up a purchase and deposit $0.52 into a savings account? (sarcastic condescending clap) From advertising to education to purchases of home appliances, the message is take out loans and assume a monthly nugget to pay off. Don't save up to buy something, and remember, all assets can be borrowed against to free up cash for today.
You honestly think you, little American, and your local bank is worthy of holding your money and determining how it is loaned or invested? No way. That is only for the big boys to handle. They are experts; you are a plebeian fool. In their defense, look at the poor performance of the thousands of real estate flippers of the mid '00s. Expert corporate leadership and money center bankers know exactly how to maximize returns. They shoved billions into mortgages with single digit interest rates in the early 2000s instead of shoving billions into energy and alternative energy investments. Where was their genius there? An investment firm that spent billions in Bakken shale oil plays in '02-'05 instead of California mortgages would be a political kingmaker now instead of a corporate welfare queen (Citigroup). The savings comparisons to China are flimsy because they do not have a comparable financial infrastructure. Chinese people do save a ton of money, which is partly due to low trust in banks, cronyism in planned projects and limited investment vehicles. China does not have a national social security system (experimental here), so they have to save for retirement. It's apples to oranges and only distracts Americans from the real problem. Our system is focused on spending. It is a rather grotesque comparison, but agriculture never went away in America. We don't farm the soil for money, we farm our citizens.