Coronavirus has turned America into a nation of savers. But how long will it last?

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With a busy life in Los Angeles, Anna McKitrick has trouble saving. The 25-year-old waitress and aspiring actress estimates she spends $200 a month on coffee, snacks, on-the-go meals, and other purchases she could live without.

Now thanks to the coronavirus, McKitrick is stuck in her childhood home in New Jersey, living rent-free for the foreseeable future — and using the opportunity to permanently kick her impulse spending habit.

Without bills to pay and thanks to a surprisingly large tax refund, she’s already saved several thousand dollars. She says she’s also reevaluated what is actually important to her. “I just realized how much money I was wasting instead of putting it towards my priorities, like building a bigger emergency fund and paying for experiences I want to have,” says McKitrick.

It’s no secret that Americans struggle to save for the future. A study from JPMorgan Chase found that about two-thirds of us do not have the recommended six weeks of take home pay set aside for an emergency. And a recent Money/Synchrony Bank study revealed that 36% of people earning between $75,000 and $100,000 still worry about unexpected expenses. But now the coronavirus is forcing millions of people to cut down on unnecessary spending in a way that they’ve never been able to before.

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The rich have stopped spending and that has tanked the economy

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A worker paints over a Louis Vuitton storefront, boarded up after the coronavirus outbreak, on March 30 in San Francisco.

The wealthiest American households are keeping a tight grip on their purse strings even as their lower-income counterparts are spending a lot more freely when they emerge from weeks of lockdown. That decline in spending by the wealthy could limit the whole country’s economic recovery.

Researchers based at Harvard have been tracking spending patterns using credit card data. They found that people at the bottom of the income ladder are now spending nearly as much as they did before the coronavirus pandemic.

“When the stimulus checks went out, you see that spending by lower-income households went up a lot,” said Nathan Hendren, a Harvard economist and co-founder of the Opportunity Insights research team.

However, the wealthy are not matching them. “For higher-income individuals, that spending is still way far off from where it was prior to COVID and it has not recovered as much,” Hendren said.

That’s potentially crippling because consumer spending is a huge driver of economic activity. In fact, so much of the country’s economy depends on shopping by the top income bracket that the wealthiest 25% of Americans account for fully two-thirds of the total decline in spending since January.

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Not since 1966 has the federal government’s workforce been so small

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The shrinking government workforce doesn’t mean that government spending is at record lows.

It’s hard to believe the federal government now employs the fewest people since the mid-1960s. Yet according to jobs report earlier this month, the federal government now employs 2,711,000 people (excluding non-civilian military). Among the economy’s largest job sectors, it was the only one to shrink over the past year.

 

 

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Eight facts that explain what’s wrong with health care in America

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Obamacare is not universal health care.

If the American health care system were to break off from the United States and become its own economy, it would be the fifth-largest in the world. “It would be bigger than the United Kingdom or France and only behind the United States, China, Japan and Germany,” says David Blumenthal, executive director of the non-profit Commonwealth Fund. Here are eight facts that support reality.

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How rich and poor Americans spend money now and 30 years ago

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Rent has nearly doubled as a share of a poorer family’s spending.

Every year, the Bureau of Labor Statistics tells us what the typical American spends on everything from his rent to his reading material. There’s just one problem. In a country with growing income inequality, the typical American leaves out a lot of Americans.

 

 

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Government mass surveillance will create a surge of technology spending

A simple graphic that shows how the NSA hacked Google.

As technology races ahead, from time to time public debate and the law of the land must catch up to it. Government surveillance is one of the most important technology issues of our times. In the US, the NSA files have already had a profound impact on the perceptions of Americans about surveillance and civil liberties. Outside the US, Germany is aghast that the US and UK, NATO allies would spy on Angela Merkel and Germany. On the other hand, there is some evidence that the NSA has aided in combating Mexican drug cartels and prevented terrorism.

 

 

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Falling bridges and the decline of U.S. infrastructure spending

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When a bridge falls in America, like this one near Seattle last week, infrastructure spending has a way of transforming into a national obsession. Fortunately, falling bridges in America are still a rarity. But, infrastructure spending is being squeezed at the very moment that infrastructure spending is a historic bargain for the federal government.

 

 

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How Millennials shop and spend in America

16 to 34 year olds are more likely to wield a smartphone or other mobile device as a shopping companion.

We all know that young people like to shop. All before the responsibilities of having a family set in,  in the relatively care-free years of high school and college, young people tend to throw their pennies into blouses, jeans and other must-have accessories. (Infographic)

 

 

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The average cost of Christmas in America

Christmas in America seems to be getting more extravagant.

With just a few days until Christmas day, many shoppers are feverishly trying to find the perfect meaningful gifts for everyone on their list. commercialization of the American Christmas plays a very big part in how much the average American pays for all of his or her holiday expenses. Between gifts, holiday parties and decorations, Christmas in America seems to be getting more and more extravagant. Here is a look at the average cost of an American Christmas and a glance at why the cost of the holidays is steadily rising.

 

 

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Top 10 most educated countries in the world

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The countries with the most highly educated citizens are also some of the wealthiest in the world.

College graduation rates in developed countries have increased nearly 200%, in the past 50 years according to Education at a Glance 2011, a recently published report by the Organisation for Economic Co-operation and Development (OECD). While education has improved across the board, it has not improved evenly, with some countries enjoying much greater rates of educational attainment than others, according to the report.

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More travelers splurging on luxury in the sky

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More travelers are splurging in the air and scrimping on the ground.

A new study by American Express Business Insights finds that spending on first- and business-class airline tickets increased by 9.1% and 5.4%, respectively, in the third quarter. But on the ground, travelers spent more of their dollars — an additional 10.5% — on economy lodging vs. only 2.2% more on luxury hotel accommodations in that time.

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