Paul wrote:
BUT, one should also add that these often-quoted numbers are misleading since the personal savings is as a percent of current *income* only. For the better off, lots of things that were considered income, and really are income, are now channelled through the expansive tax and regulatory loopholes and bypass being counted as "income" and go straight into "savings" as wealth (401k, stock options, etc).
Eh? What are you referring to? 401k contribs are included in personal income, and I'm pretty sure employee stock option exercises are too. Capital gains are excluded, but that's conceptually right, since savings, like investment, are measures of foregone consumption - diversions from current production and income earned in production. Oddly, the Fed considers purchases of consumer durables as savings in the flow of funds accounts. Doug
