[PEN-L:435] Re: Re: Re: Re: Cyber-Sawicky

[Doug Henwood <dhenwood@xxxxxxxxx>]

Eugene P. Coyle wrote:

> When an individual goes into a 401 k or similar contrivance, reported
>income for tax purposes goes down.  Is the amount deducted "saving"?  And
>is that (or any other $$ figure for saving) in a ratio with income for tax
>purposes, or the total income before the 401 k deduction?

Pension plan contributions count as income, so they're counted as personal
savings (defined as income less expenditures).

>        Second question:  In the national saving rate calculation, is
>corporate "saving" (i. e. depreciation, retained earnings, other free cash
>flow) added in somehow?  If not, what would the USA saving rate be if it
>were?

Here you go, from table 5.1 of the NIPAs. The net figure is the result of
subtracting the consumption of fixed capital entries from the gross savings
figures.

U.S. SAVING & INVESTMENT, % OF GDP

                   gross savings
       ----------------------------------------
                                 government
                             ------------------   cons of    net
       total  pers    corp   total  fed  st/loc   fixed K  savings
1929   18.5%   3.4%   3.0%   3.7%   1.3%   2.3%     9.2%     9.3%
1930s  12.1%   1.9%  -1.4%   1.8%  -1.3%   3.1%    11.0%     1.0%
1940s  19.6%   9.5%   2.7%   1.1%  -0.8%   1.9%     9.6%    10.0%
1950s  21.1%   5.2%   2.8%   5.3%   3.1%   2.2%    10.5%    10.6%
1960s  21.4%   5.2%   3.6%   5.1%   2.2%   2.9%    10.1%    11.3%
1970s  19.8%   5.8%   2.8%   2.6%  -0.5%   3.1%    10.9%     8.9%
1980s  18.0%   5.1%   2.2%   0.8%  -2.1%   2.9%    12.0%     6.0%
1990s  16.0%   2.7%   2.9%   1.2%  -1.1%   2.5%    11.1%     4.9%

1998   17.5%  12.9%   3.7%   4.7%   2.8%   2.7%    10.7%     6.8%