TIME People

U.S. Personnel Chief Resigns After Massive Data Breach

The Office of Personnel Management Director Katherine Archuleta arrives late for a hearing of the Senate Homeland Security and Governmental Affairs Committee about the recent OPM data breach in the Dirksen Senate Office Building on Capitol Hill June 25, 2015 in Washington.
Chip Somodevilla—Getty Images The Office of Personnel Management Director Katherine Archuleta arrives late for a hearing of the Senate Homeland Security and Governmental Affairs Committee about the recent OPM data breach in the Dirksen Senate Office Building on Capitol Hill June 25, 2015 in Washington.

There was a strong bipartisan call for Katherine Archuleta's resignation

(WASHINGTON) — The head of the government’s personnel office has resigned in the wake of a massive data breach on her watch.

A White House official says President Barack Obama accepted the resignation of Office of Personnel Management Director Katherine Archuleta on Friday morning. She’ll stay on the job through the end of the day.

The official says deputy director Beth Cobert will become acting director starting Saturday.

Archuleta’s resignation comes the day after her agency disclosed that hackers stole the personal information of more than 21 million people. Previous government estimates of how many were affected by the breach were far smaller.

Members of Congress in both parties had demanded Archuleta’s resignation.

TIME Innovation

It’s Time to Catalyze Public Innovation Education for Government

business-people-puzzle
Getty Images

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

Opportunities for collaboration have never been greater

A countless number of the expert speakers and innovators at #AspenIdeas Festival are either current or former government leaders who are helping guide the process of where and how communities, philanthropy, arts, and business can come together to solve the most intractable issues of our time.

From a discussion with Senator Cory Booker (D-NJ) on mass incarceration, to Improving Urban Public Schools with Mayor Rahm Emanuel (D-Chicago) and Preventing Violence in America with Mayor Mitch Landrieu (D-New Orleans), civic leaders face many of the same challenges of the past century. But this generation of civic leaders are often tasked with solving them without the time, training or talent to match current needs — regardless of relevance or cost effectiveness.

As we’ve noted before, governments are hamstrung by legacy processes while a fast-moving public demands increased responsiveness. At the same time, opportunities for collaboration between the public and private sectors have never been greater. As one local government leader put it, “We’re now riding the second wave of civic pro-bono and civic innovation.”

So how can 20th century government effectively scale 21st century solutions to resolve these intractable challenges?

Well, to capitalize on the immense interest in civic collaboration, governments at all levels need training to leverage this new generation of public-private partnerships. Civic leaders and public employees could benefit from executive-level training in public sector innovation to:

· Get familiar with the opportunities and the obstacles;

· Learn how to avoid conflicts of interest and how to match the right partners to the right projects;

· Make agile development and rapid prototyping work in the public sector, and when to leverage open source tools versus proprietary tools;

· Leverage both new and well-established financial (and financing) tools to better align incentives for private investment in public services.

Best of all, key elements of this approach do not require new infrastructure:

Leverage existing partners, networks, and facilities. Cross-sector approaches are being deployed in cities across the country such as Philadelphia, San Francisco and Washington, D.C. Take for example the recently launched Aspen Urban Innovation Lab that hosts deep-dive roundtable dialogues for its Urban Innovators in Residence that include cross-sector participants to examine pressing issues in D.C.

Engage cutting-edge private sector partners. Cross-sector partners can leverage networks of highly-trained professionals to design effective certification standards, deliver new and compelling executive education, and deploy innovative new approaches in tandem with public sector partners.

Apply modules from curricula developed at places such as the Presidio Institute, University of California-Berkeley Haas School of Business, Stanford d. School, University of Chicago, and Harvard Kennedy School of Government.

Design for agile. Government doesn’t need another static approach to training. Standards and certification should always address the latest thinking, approaches, and technology. Cross-sector, eternally iterative networks can make this a reality.

What’s needed now is what a friend calls the “connective tissue” — and it seems to us that Aspen Institute — which has the convening power as well as the “air” (research, policy, thought leaders and influencers) and “ground” game (community leaders, advocates and others) could be the answer.

This article was originally published by The Aspen Institute on Medium

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Pakistan

Criticism of Pakistani Government Intensifies as Heat-Wave Death Toll Tops 1,000

Pakistan Heatstroke
Shakil Adil—AP A man with his daughter who suffers from dehydration due to extreme weather waits for a medical help outside a ward at a child hospital in Karachi, Pakistan, on June 24, 2015.

Most of the deaths have occurred among the elderly and poor people without access to air-conditioning

The Pakistan government continued to face the nation’s ire Wednesday over what critics call its inadequate preparation for and response to a devastating heat wave sweeping the southern Sindh province.

Opposition lawmakers slammed Prime Minister Nawaz Sharif’s ruling party in Parliament over the repeated power cuts and water shortages that have considerably worsened the crisis, Pakistan’s Dawn newspaper reported. Many accused the government of “inaction” in the face of hundreds of deaths in the provincial capital, Karachi — the country’s largest city — and its surrounding areas.

“There is a problem of very poor governance, and in normal circumstances it is not so exposed,” Khalid Rahman, director general of the Institute of Policy Studies in Pakistan’s capital Islamabad, says in an interview with TIME. “In this very extraordinary heat wave, it has exposed so many things.”

Over 1,000 people have now died from heatstroke or related medical problems, a majority of them poor and elderly people without access to air-conditioning. The escalating problems from the heat wave prompted the government to declare a public holiday on Wednesday so people could stay indoors, according to the New York Times, and though the resumption of sea breezes from the country’s southern coast contributed to a lowering of the overall temperature and a reduction in the number of fatalities, there are still thousands more undergoing treatment at various hospitals across the region.

The Pakistani army and a paramilitary force, the Rangers, have also stepped in, setting up relief camps for heatstroke patients, while various nongovernment and volunteer organizations have been distributing water and medicine outside hospitals.

“Today was a lot better,” Anwar Kazmi, a spokesman for the Edhi Foundation that runs Karachi’s largest morgue, told the Times on Wednesday. “We’ve had 58 deaths today, compared to yesterday when the death toll rose to 300.”

Khawaja Muhammad Asif, Pakistan’s Water and Power Minister, attempted to deflect the blame from his government and delink the power shortages, which Pakistan has long grappled with, from the heat wave.

“The federal government is not responsible if there is a water shortage in Karachi,” he said in Parliament. “We are ready for accountability, but it’s not appropriate to blame us for each and every thing.”

Rahman, however, says there is a lot the government could have and should have done differently.

“In these days of technology-driven information available well in advance, the government should have come up with an emergency plan as well as some kind of awareness campaign for the public and some emergency centers,” he says. “Unfortunately, despite so many deaths the governments, both provincial as well as federal, did not accept the responsibility. Instead they started blaming each other.”

TIME Government

National Park Service Aims to Stop Sales of Confederate Flags

Confederate flag
Daniel Cooper&—Getty Images

The request was voluntary

Please seems to be the word of the day from the National Park Service, which is asking but not requiring that its associated retailers join a growing effort to stop the sale of Confederate flags and related products in the aftermath of the Charleston church massacre.

According to the Washington Post, spokeswoman Kathy Kupper wrote in an email Wednesday that “The National Park Service is asking its cooperating associations, concessions, and partners to voluntarily withdraw sales in their stores of Confederate flags and other items, such as stickers, that depict the Confederate flag as a stand-alone feature.”

The request comes after major U.S. retailers—including Walmart, Amazon, Sears, and eBay—pledged this week to stop selling Confederate flag-themed merchandise. A number of small and large retailers have pulled Confederate-related products from their offerings in response to mounting pressure after pictures of the man charged in the killings of nine black people emerged, showing him posing with the flag.

If successful, the request could have wide-reaching effects. The National Park Service is entrusted with the care of more than 400 parks across the nation, and its response to the Post noted more than 70 of them—including cemeteries, homes and other sites—”have resources that are related to the history of the Civil War.”

[Washington Post]

TIME Government

Alexander Hamilton’s Descendant: I’ll ‘Do Everything’ to Keep Him on the $10 Bill

Portrait of Alexander Hamilton
DEA PICTURE LIBRARY—De Agostini/Getty Images Portrait of Alexander Hamilton (1757-1804), American politician. Painting by John Trumbull (1756-1843).

The U.S. wants to put a woman on the bill

Correction appended, June 17, 2015.

The U.S. Treasury announced Wednesday that the future of Alexander Hamilton’s likeness on the $10 bill could be in question, as it plans to feature a woman on the next note. Secretary Jack Lew will make the final decision and announce his choice later this year; the new bill will likely be introduced in 2020, a century after women were given the right to vote.

But while many celebrate this milestone for American women, Douglas Hamilton, a descendant of the former Treasury Secretary living in Ohio, strongly believes that his great-great-great-great-great-grandfather should remain on the bill.

“I cannot think of another individual who made such a significant contribution as him to make this country what it is today,” Hamilton told TIME. “What he did to turn America around financially after the American Revolution—we wouldn’t be the greatest nation in the world today if it weren’t for him.”

The Treasury’s announcement said Alexander Hamilton’s image “will remain part of” the note, rather than fully replaced. “There are many options for continuing to honor Hamilton. While one option is producing two bills, we are exploring a variety of possibilities.”

Hamilton, 64, said he was already aware of the potential change and that he plans to fight to keep his ancestor on the currency. “There have been attempts to change the $10 bill before,” he said, referring to a campaign in 2004 to put President Ronald Reagan on the note. “If there were plans to remove him, we would do everything we could to make sure Alexander Hamilton remained on the $10 bill.”

It’s important to Hamilton that Americans have a daily reminder of the debt they owe their forefathers; he specifically mentioned his ancestor and President George Washington among those who “made the decisions necessary to make this country great.”

Still, Hamilton said he recognizes the importance of having a woman grace one of the bills. Although he hadn’t thought about which woman might be a good fit, he suggested Alexander Hamilton’s wife, Elizabeth Schuyler Hamilton, for the work she did to preserve her husband’s legacy.

Correction: The original version of this story incorrectly stated that Hamilton would be replaced.

TIME Security

Edward Snowden: Privacy Remains ‘Under Threat’

FRANCE-US-EU-SURVEILLANCE-SNOWDEN
Frederick Florin—AFP/Getty Images U.S. National Security Agency (NSA) whistleblower Edward Snowden speaks to European officials via videoconference during a parliamentary hearing on improving the protection of whistleblowers, at the Council of Europe in Strasbourg, eastern France, on June 24, 2014.

"Technology companies are being pressured by governments around the world"

Edward Snowden has penned a new op-ed celebrating recent reforms of the National Security Administration.

President Barack Obama this week signed into law tighter restrictions for the agency, barring the organization from mass collection and storage of American phone records. Snowden, the man who revealed these practices to the public, is in the New York Times Friday, celebrating the work of Congress and the President as a “profound” achievement, and “a historic victory for the rights of every citizen.” Still, Snowden believes surveillance reform has a long way to go.

Here are some other choice quotes from the article:

  • Snowden had worried at one point that he might have, “put [his] privileged lives at risk for nothing — that the public would react with indifference, or practiced cynicism, to the revelations.” But the changes to the law have, in part, vindicated his decision to risk imprisonment by leaking classified information
  • He calls this weeks events, “only the latest product of a change in global awareness,” citing other events like The U.N. declaring “mass surveillance an unambiguous violation of human rights,” as evidence of a broader movement to curtail spying powers.
  • He also laments that there is more work to do. Writes Snowden: “the right to privacy . . . remains under threat. Some of the world’s most popular online services have been enlisted as partners in the N.S.A.’s mass surveillance programs, and technology companies are being pressured by governments around the world to work against their customers rather than for them.”

Check out the full article over at The New York Times.

TIME cybersecurity

Edward Snowden Answered the Question We’ve All Been Wondering

The New Yorker Festival 2014 - Edward Snowden Interviewed by Jane Mayer
Bryan Bedder—Getty Images for The New Yorker General view of atmosphre at Edward Snowden Interviewed by Jane Mayer at the MasterCard stage at SVA Theatre during The New Yorker Festival 2014 on October 11, 2014 in New York City.

He talked about Rand Paul, too

In case you were curious, Edward Snowden still enjoys pizza in Russia.

“Do you miss pizza? Favorite thing about Russia so far? If you could be an insect, which would you be and why?” a Reddit user asked Snowden in a recent AMA, or “Ask Me Anything.” Snowden’s response was short and sweet: “This guy gets it. Russia has Papa John’s. For real.”

But Snowden also took the opportunity to answer questions on more serious subjects. After all, the conversation was centered around Section 215 of the Patriot Act. That’s one section Snowden brought to the public’s attention in 2013 when he leaked information about the NSA’s telephone records collection program.

Snowden took the AMA opportunity to respond to a question about Senator Rand Paul’s filibuster against the Patriot Act. Snowden wrote:

It represents a sea change from a few years ago, when intrusive new surveillance laws were passed without any kind of meaningful opposition or debate. Whatever you think about Rand Paul or his politics, it’s important to remember that when he took the floor to say “No” to any length of reauthorization of the Patriot Act, he was speaking for the majority of Americans — more than 60% of whom want to see this kind of mass surveillance reformed or ended.

Snowden conducted the Reddit conversation along with Jameel Jaffer, the deputy legal director of the ACLU.

TIME youth

Why Young People Don’t Want to Run For Office

TIME speaks with Jennifer Lawless, whose research on young Americans' political ambition is revealed in a new book

Will American politics face a brain drain? If current trends continue, it could soon.

Political science professors Jennifer Lawless and Richard Fox asked more than 4,000 high school and college students if they would be interested in running for political office in America someday: 89% of them said “no.”

That finding is the crux of a new book based on their original research, Running From Office. In it, the authors argue that the dysfunction of Washington has turned the next generation off politics in historic fashion. Unless behaviors change, American University’s Lawless says, the country’s brightest stars are going to pursue just about anything but one of the 500,000 elected offices America needs filled each year.

Here is a lightly edited transcript of TIME’s interview with Lawless, in which she explains who’s to blame, what’s to be done and why she earnestly believes parents should be convincing their kids to become politicians.

It’s an old, old thing to lament the youth’s lack of interest in politics and a rancorous political climate. What is happening here that is new?

There are two dynamics. The first is that lamenting young people’s engagement has previously always stopped at their interest or their participation. [Researchers have] never actually considered whether they’re interested in running for office. The other is the young people that we’ve surveyed, who are high school and college students now, have grown up only amid the dysfunction that currently characterizes the political system. They have known nothing else. And this is really the first generation where that’s the case.

But is this a historic brand of dysfunction?

We know that polarization is stronger now than it’s been and it’s continued to increase. We know that effectiveness—if we measure that in legislative productivity—has been lower in the last several Congresses. And look at some of the high-profile examples of dysfunction that we’re not accustomed to seeing. The government shutdown is the most obvious one. Debates over raising the debt ceiling. The U.S. having its credit rating decreased. The constant worry over the course of the last year that there might be another government shutdown. That’s new to this generation. We saw dysfunction but not at the same level in the 1980s and 1990s.

Why do you think researchers haven’t looked at political ambition before?

I think there is this disconnect. Until we started doing the research, I didn’t know that the careers that young people identify as something they might be interested in during their teens often map onto what they’re going to do later in life … There was probably this sense that, ‘Well, it doesn’t matter. Young people are disengaged. They’re tuned out. When politics matters to them, they’ll care more.’ But what our data suggests that if they’re already writing this off now, there’s nothing to suggest that it’s going to come back onto their radar screen.

Do we have numbers from previous generations to compare the 89% statistic to?

We don’t know because polls of young people in previous generations generally don’t exist. We do, though, have data over time on young people’s interest in politics, whether they talk about politics with their families, whether they are talking about politics with their friends and whether they follow political news. We found that all of those things are predictors of whether you’re running for office. And the over-time data show declines on all of those indicators. Depending how you examine them, we see declines of 20% or 30%.

How long is this list of who or what is to blame for young people’s antipathy or apathy toward being in politics?

We’re not necessarily blaming young people. It’s that they live in an environment where they’re not particularly interested in politics because they find it argumentative and dysfunctional. But their parents agree. And their teachers agree. And the news media agree. So they get these constant reinforcing messages that this is not something that is fun or interesting or important or noble … The [other] set of players are the politicians themselves. They behave increasingly in unappealing ways and in ways that suggest that they’re not effective at their jobs.

Why should parents and teachers be pitching kids on politics when that’s not necessarily a message they believe in?

We think that letting young people know that this is a way that they can effect change—and that politics does not have to be the way they perceive it—is a message we want to send. At the end of the day, legislation is passed and policies are made by the government. And if you don’t have a seat at that table, even if you are highly effective in a behind-the-scenes kind of capacity, you’re not living up to the full potential of options you have. If people choose not to do that, that’s fine. But 13 to 17-year olds should not be writing that off as a future career option … If we had heard that 89% of young people said that under no circumstances would they ever become a lawyer or a doctor or a journalist or a teacher, there would probably be a national outcry.

What happens if kids don’t change their minds?

We have more than 500,000 elected offices in this country. … We’re not concerned that no one will run for them. We’re concerned that the candidates will be the type of people who aren’t interested in bringing about a better system.

What kind of people will still be attracted to political races, if not the best candidates?

The kind of people who are currently in office. People that actually do not think that government is a way to bring about positive change, people who are more interested in their own power than public policy, people that are antagonistic and confrontational and value partisanship over output.

When you’re talking to that jaded 16-year-old, how do you pitch them on this?

The first thing is to ask them what matters to them, and in almost every case what is most important to a high school student or a college student can be linked to a specific political issue. For high school students, it might be that they’re worried about whether they’re going to be able to afford college. For college students, it might be whether they’re worried about moving into their parents’ house when they graduate. For young women, it could be that they don’t have access to contraception.

So what should be done to remedy that situation?

We have a series of recommendations. One is linking political aptitude to the college admissions process, so people have to know something about current events and politics if they want to go to college. Another suggestion we have is some kind of national service program that would value political service. We’ve seen large programs like the Peace Corps, like Americorps, like Teach for America, where we have created incentives for young people to go out and improve communities. There’s no similar program for political service, which could create an incentive for young people to get involved in their communities as elected leaders.

How optimistic are you feeling right now about all the gridlock and bickering and disenchantment improving?

It’s funny because I’m an eternal pessimist but on this front, I believe in government. A lot. Maybe this is a little idealistic, but I think as people begin to realize that there are long term consequences to the dysfunction that we’re experiencing—that we might be turning off an entire generation or even discouraging adults right now who are well-qualified to run and lead—they’ll see there are opportunities for change.

TIME Nepal

Why Nepal Wasn’t Ready for the Earthquake

The death toll has been amplified by a paralyzed political system

The shock of the past few days in Nepal gave way to despair, frustration and a few larger questions on Tuesday, as the death toll from the devastating earthquake that wracked the small Himalayan nation over the weekend rose above 4,000 — a number that will almost certainly rise once international rescue teams reach rubble-filled outlying areas surrounding the capital, Kathmandu.

The massive quake, measuring 7.8 on the Richter scale and followed by three days of panic-inducing aftershocks, has left the country — already one of the world’s poorest and least developed — reeling and utterly helpless.

But while the earthquake is tragic, seismologists said it didn’t come as a surprise. Nepal’s location on a fault line and a lack of emergency resources made a devastating earthquake inevitable, heightening a sense that more should have been done to make typically ramshackle local buildings more resilient, and so saving countless lives.

“It was no surprise whatsoever. This is the earthquake we’ve been waiting for,” Susan Hough, a seismologist at the U.S. Geological Survey, tells TIME. “People have been talking about a magnitude 8-ish earthquake hitting Nepal pretty much exactly like this one did. What surprises me is how many buildings are still standing.”

Nepal, nestled in the midst of the Himalayas and on a fault line between the Eurasian and South Asian tectonic plates, has long been on experts’ radar as a high-risk region that lacks the wherewithal to protect its 30 million people.

The country has a per capita GDP under $1,000, and homeowners often construct their own buildings without any oversight from trained engineers. Government officials imposed a new building code in 1994, six years after an earthquake there killed 700 people, but lack the resources, or will, to enforce it strictly. The government also attempted to implement a 1998 action plan formulated by disaster-management organizations GeoHazards International and the National Society for Earthquake Technology–Nepal, but was unable to adequately shore up its defenses.

“People have been trying for a long time to improve preparedness and resilience, but they’re resource-strapped,” Hough said.

MORE 6 Ways You Can Give to Nepal Earthquake Relief

The rest of the world has jumped to Nepal’s aid in the quake’s aftermath, with a host of countries ranging from neighbors like India and China to distant nations like the U.S. and even Israel joining the landlocked Himalayan nation’s own people in providing relief-and-rescue assistance. However, the continuing efforts have enforced a bitter sense of how powerless the Nepali government is to care for its own people when faced with calamity.

“Our government is not strong enough to handle this,” said Kshitiz Nyaupane, a Kathmandu local in his mid-20s. “We must take care of it ourselves.”

Nyaupane’s statement echoes the frustration Nepal’s people feel at a political system wracked by decades of indecision, internal conflict and instability.

A decade-long civil war sparked off by a Maoist rebellion ended in 2006 after claiming nearly 20,000 lives, and the monarchy that had ruled Nepal since the 1700s was abolished in favor of parliamentary democracy. Competing and highly divisive factions of Nepali politics have been unable to come to an agreement on a constitution since then, however, and issues like disaster preparedness have taken a backseat amid an impasse that has lasted nearly a decade.

“We have had no political stability, nine prime ministers in eight years, and we don’t have a constitution,” Nishchal N. Pandey, director of the Kathmandu-based Centre for South Asian Studies (CSAS), tells TIME. “The people are very, very frustrated” at Nepal’s political and economic paralysis that could well be exacerbated by this disaster, Pandey said.

“The government cannot look after everyone,” said Tika Regmi, executive director of local trekking company Adventure Mountain Explore Treks & Expedition. “It’s the public like us who has to be careful.”

Although all of Regmi’s tour groups bound for the base camp of Mount Everest have fortunately been accounted for, he said not a single member of the government, police or army had come to his village of Budhanilkantha (about 11 km from Kathmandu) as of Monday afternoon. “Some people don’t even have a tent, mattress, blankets or food,” he said. “I don’t know if the government is looking, they may come to us tomorrow or maybe not.” Regmi was unreachable on Tuesday.

Some believe the government’s efforts of the 1990s may have mitigated the extent of the devastation to some degree — experts had previously predicted that an 8.0-magnitude quake in Kathmandu could kill between 40,000 and 250,000 people, according to University of Colorado professor and South Asian earthquake expert Roger Bilham.

But Pandey says there are certain facts and figures that are inexcusable. “Can you imagine that the Nepal army has just one Mi-7 helicopter?” he says. “Just one, for a force of 90,000. This is a grave tragedy.”

The CSAS head hopes that the earthquake, as tragic as it is, will be the jolt Nepal’s political class needs to get its act together. A fully functioning government would go some way to ensure the next quake, which is surely coming, does not wreak such a hefty toll. “So many people have died, our history is completely gone, and if not now, then when will these politicians come together?”

— With reporting by Justin Worland / New York

Read next: Where Will the Next Big Earthquake Hit?

Listen to the most important stories of the day.

MONEY Taxes

What It Says About the Economy that People Are Saving their Tax Refunds

saving tax refund
Rene Mansi—Getty Images

It's not necessarily good news that so many are banking their checks from Uncle Sam

This spring, Jes Norman is looking forward to handing her personal financial advisor a bigger-than-normal check: her tax refund.

“I’m investing because I hadn’t in prior years,” says Norman, 28, a project manager for an electronic medical record company. “My tax return is the easiest deposit to give since it’s ‘bonus’ money.”

After a serious medical illness plunged her in debt four years ago, the Rockford, Ill. resident was forced to spend her available cash paying off medical bills. Now her finances are stable enough for her to save her refund.

Retailers looking forward to tax refund season hope Americans with extra cash might be quick to throw open wallets and splurge. But surveys show a higher percentage of adults will be making like Norman this year, and socking away at least part of their refunds.

Fewer Plan to Splurge

tax refunds economy

The average tax refund is up 0.7% this year, to $2,893. And the National Retail Federation’s survey last month of over 6,000 adults across income brackets and regions showed almost half of consumers expecting a refund are planning to save some of what they get back from Uncle Sam.

That is the highest percentage since the trade association started conducting the survey 12 years ago.

Thirty-nine percent of consumers also planned to pay down debt with their refund.

Only 10% planned to make a “splurge” purchase and a quarter said they would use at least some of the refund for living expenses.

A smaller survey by Bankrate.com showed consumers who planned to spend their refund dropped from 7% in 2010 to only 3% this spring. Meanwhile those who planned to save or pay down debt grew from 58% five years ago to 67% today.

Blame the Recession Hangover

This savings trend has been taking off on a national scale since the recession, says Mark Zandi, chief economist for Moody’s Analytics. Before the recession, the savings rate hovered between 2.5 and 3%. Now it’s up to 5.5% and has been on the increase for the last three months.

“American consumers remain cautious,” Zandi said. “I think, in general, consumers are not letting loose.”

Other economic indicators seem to back this up.

Despite strong job growth, several months of increases in personal income and lower gas prices, retail sales dropped 0.6% last month—despite forecasts for an increase of 0.3%. This is the first time since 2012 they have dropped for three consecutive months.

Personal consumption also declined more than expected: -0.2% and -0.3% over the past two months before adjustments for inflation.

And the annualized pace of auto sales fell in February to 16.2 million from January’s 16.6.

Meanwhile consumer sentiment has been slipping during tax season. The index peaked at an 11- year high in January at 98.1 but fell in February to 95.4 and to 91.2 in March’s preliminary forecast.

New York tax professional Alisa Martin, who has clients ranging from low-income freelancers to high-income professionals, also says she has seen a new awareness from clients to save and pay down debt since the recession.

“People are more concerned about savings,” said Martin. “Even people that were good financially before the crash, it dipped into a lot of their savings. They saw accounts really go down. Now they’re trying to get things built back up.”

The NRF survey found that Millennials were even more likely than the general population to save (55% vs. 47%)—which may be owed to their having come of age in tough economic times.

“Perhaps having learned a few financial lessons from their parents during the economic downturn, it appears that Millennials are looking for ways to get ahead,” explains Pam Goodfellow, a director for Prosper Insights and Analytics, the company that administered the poll. “Less likely to be saddled with mortgages and accumulated debt, tax refunds represent the perfect opportunity for younger consumers to invest in their future.”

 

Hear why Millennials are saving more of their refunds

 

Aside from these national trends, Americans may also be affected by more programs promoting savings this tax season. H&R Block, one of the country’s largest tax preparers, announced a new 3-year program to promote savings called “Savings at Tax Time.” The campaign, a partnership with the Consumer Financial Protection Bureau, will encourage clients to save when they come in to get their taxes done.

The bureau also runs a similar campaign at thousands of government-supported community tax preparation sites for low-income Americans.

Retailers Will Lose… But Maybe Not as Much as Expected

The loss in potential spending by Americans is significant. Last year, the IRS handed Americans a total of nearly $65 billion dollars in refund checks.

But even with the increased push toward savings, tax refund season won’t be a total bust for retailers.

“We do know that there are significant spending responses among households when their tax refunds arrive,” said Jonathan Parker, a finance professor at MIT who has studied how Americans tend to spend money they get from government rebates and refunds.

Parker said many studies have shown that people tend to spend a “significant share” of these types of payments—even those who say they’ll save it.

More on taxes from Money 101:

How can I reduce my tax bill?

How do you know if it makes sense to itemize?

What if I need more time to file my taxes?

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