With many struggling with credit card debt, president urges saving

09.09.09
By James Conroy

As the economic downturn continues, many people are having trouble making payments to their credit card debt and home loans, making thoughts of retirement a pipe dream. But in his weekly radio address, President Barack Obama outlined new steps which are aimed at help increase savings and allowing more Americans to retire.

According to the White House more than 78 million Americans - about half the workforce - currently do not have retirement plans. Another 90 percent of people with retirement plans through their employer do not make contributions.

With this in mind, Obama says new initiatives will make it easier for Americans to save, something he says is essential to changing the spend-first nature that put many people into debt.

"[W]e certainly cannot go back to an economy based on inflated profits and maxed-out credit cards; the cycles of speculative booms and painful busts; a system that put the interests of the short-term ahead of the needs of long-term," he said over the weekend. "We have to revive this economy and rebuild it stronger than before. And making sure that folks have the opportunity and incentive to save - for a home or college, for retirement or a rainy day - is essential to that effort."

One part of the plan will allow taxpayers to save their yearly tax refunds. The White House notes that more than 100 million families receive an average of $2,000 in tax refunds each year and beginning next year they will be able to use that money to purchase savings bonds.

The idea of saving money appears to already be percolating among American consumers. Recent figures from the Commerce Department show that the personal savings rate rose to 4.2 percent in July - down slightly from 4.5 percent in June.

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New plans hope to give Americans a better chance to save