The only other years that had negative savings rates prior to 2005 and 2006 were 1932 and 1933. During the Great Depression, people were unemployed and had to dig into their savings to avoid dying from starvation.
However, why aren’t we savings today? We’re not in another Great Depressions. Perhaps it’s because it’s so much easier today to buy things. We can buy things from anywhere in the world from our couch or office chair on credit and have it shipped to our front door. Prior to the internet, people actually had to walk or drive to stores to shop, unless they purchased via phone from a catalog.
We’re spending too much, too quickly, and we’re doomed when the baby boomers can’t work anymore. Gen-X and Gen-Y will be supporting their parents and grandparents well into their 90s and 100s because of the advances of medicine, while not being able or willing to save for their own retirements.
Of course, I am known to be a pessimist.