Individual investors, in terms of financial assets they control, are the largest and most important players in the U.S. capital market.

Therefore, when Federal Reserve Flow of Funds data shows household personal savings for the quarter running a negative $132.0 billion (annual rate), as occurred in Q3 2005, we need to ask, “Does this matter?”

The media often cites these statistics, claiming that Americans are throwing prudence to the winds, spending more than they make:

“Americans saving less than nothing: Spending could outstrip income in 2005, which hasn’t happened since the Depression” (San Francisco Chronicle, January 8, 2020)

“Spendthrift nation: Americans have stopped saving for a rainy day“, (Christian Science Monitor, August 3, 2020)

“Monetary Zombies: If individuals and families continue to spend more than they make, millions of us may also end up in the land of the living dead.” (The Nation, January 20, 2020 )

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Federal Reserve Flow of Funds Accounts show that, at an annual rate, mutual fund net sales in Q3 2005 dropped to a nine year low. We must to go back to 1994 to find similar low levels of mutual fund sales.

In Q3 2005, government economists reported that Americans were spending more than they earned, "dissaving" at an annual rate of $132.9 billion (NIPA income statistics).

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