A recent letter to this newspaper raised the issue of America's low savings rate. We're spending all that we earn and piling up consumer debt for anything we can't readily lay our hands on with cash, he wrote.

That's exactly what the Commerce Department officially said this week. It reports Americans' personal savings rate fell into negative territory at minus 0.5 percent in 2004. The Associated Press reports most of us spent all of our after-tax income and even spent some of what little savings we had put aside.

In 1984, the savings rate stood at 10.8 percent. By 2004, that turned to 1.8 percent.

The average American household carries nearly $20,000 in credit card and vehicle debt. Between 1989 and 2001, credit card debt increased from $238 billion to $692 billion.

The AP reports the savings rate has been negative only twice before in modern times. That was in 1932 and 1933 when many Americans were unemployed and they were forced to dip into savings to make ends meet.

That's not the case this time around. Employment remains strong. The economy is growing and Americans are feeling flush with money, mostly because of the soaring value of real estate. With a big wave of retirements coming, Americans should be saving more rather than less.

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