SPENDING IN AMERICA

Rich or poor, Americans like tospend. And their spending habitshaven't changed much, even asincomes for high-bracket earnersgrew from 5 times that of low-incomefamilies in 1972 to 9 timesin 1998. High-income families outspentthe low-income families by a 3-to-1 ratio in 1998, the same as theydid in 1972. Reasons aren't clear, butsome economists think that savingsrates for upper-income families wentup, while middle- and lower-classfamilies borrowed to maintain theirlifestyles when finances got tight.Even with lower interest rates, thisdebt is having its effect on familyfinances, with 1 out of 9 families withdebts spending more than 40% oftheir income on debt service.