>>We're playing word games here. If there were a real bulge in savings as boomers prepared for retirement, it should show up in the aggregates.> >Instead of playing word games, then, let's try singing from the same hymnbook: Flow of Funds Accounts of the United States Annual Flows and Outstandings, 1991-1997, page 7, table F9, "Derivation of Measures of Personal Savings".> A virtue, nay a purpose of the NIPA accounts is to rise above all the double-counting that results from the use of purely empirical, accounting figures. Without getting immersed up in the Flow of Funds stuff, the inescapable fact is that, as Doug says, NIPA savings trends do not support the BBB(Baby Boom Bulge) theory. Financial bubbles have an autonomous character, relative to individual and corporate decisions on the amount of income and receipts, respectively, not to spend. Searching for a bright side, one could imagine that this separation suggests some basis for useful, nontrivial reform via regulation. The State can declare by fiat property titles or financial instruments null and void by forcing write-downs and bankruptcies. The problem for the sustainability of the system would thus seem to be one of coordination in such a process. From this standpoint, there is not inherent infeasibility of the survival of capitalism forever. That may not be good news, but the prior question is whether it is true. MBS Fabian Chowder Society
