Relative Deprivation, Inequality and Consumer Spending in the United States

The American personal savings rate, which stood at nearly 10 per cent in the mid-1980s, has declined steadily in the years since (see Figure 12.1). For the fi rst time since the Great Depression, this key rate actually became negative during 2005 and 2006, when many consumers were using home equity loans and expanded credit card debt to spend more than they earned.