Masking our Negative Personal Savings Rate
Negative 1% Personal Savings rate for 3 years.
Ten trillion dollar loss in Total Financial Assets in four years.
Four fold reduction in percent of Public Debt owned by American households in seven years.
Table No. 646 of the 2002 US Statistical Abstract (USSA) reported that Personal Savings in 2000 was a negative $8.5 billion, or -0.1% of GDP, and Table No. 711 reported that the Statistical Discrepancy was $83.7 billion http://www.census.gov/prod/2002pubs/01statab/income.pdf . The Bureau of Econonic Analysis reported that our Personal Savings rate in 1999 was a negative 1.5%.
But Table No. 640 of the 2002 USSA reported that we had a positive
Personal Savings of $160.9 billion in 1999 and $67.7 billion in 2000 , while the
Statistical Discrepancy in 2000 suddenly increased by 56% or $46.7 billion to $130.4
billion. Where did this additional $76.2 billion in Personal Savings in 2000 (a
figure which represents 58% of the Statistical Discrepancy) suddenly appear from?
If it all came from the Statistical Discrepancy, then adjusting for it would adjust 1999 Personal Savings downward by $72.7 billion to only $88.2 billion, and 2000 Personal Savings downward by $130.4 billion to a negative $62.7 billion, or -1% of GDP.
Since this Statistical Discrepancy was only $1.1 billion in 1989, a 118 fold increase in only 11 years is indicative of a serious problem. This is nothing less than a creative accounting method for concealing our record low, and negative, Personal Savings rate--unless government become so incompetent that it's error rate increased 118 fold.
In addition, Table No. 1143 of the 2002 USSA reports that Total Financial Assets of American households decreased between 1999 and 2001 by almost $3 trillion, from $35 trillion to $32 trillion. Since that time, the DJIA plunged 50% and the Nasdaq plunged 76%, wiping out another $7.2 trillion, reducing Total Financial Assets to $24.9 trillion, a $10.1 trillion or 29% loss in less than four years.
During this same time, assets in Japanese households, which own as much as 90% of our $7 trillion public debt, increased by that much. Where American households held only $998 billion or 19% of the $5.2 trillion public debt in 1996, by 2001 they owned only $539 billion or 9% of the $5,807 billion public debt, a 50% decrease in ownership of American assets by US citizens. If this trend contined to this day, something that seems very likely, they now own only $355 billion or 5% of our $7 trillion public debt.
Are all of our Personal Savings represented by our "investments" in real estate? Nope. "The housing bubble, represented by $12.04 trillion in homeowner home real estate valuation, and $10.757 trillion in original home mortgage and secondary housing market paper, is the biggest such bubble in history. It has more than doubled its size since 1995." But that's only a small part of the picture. According to the latest Census Bureau reports, the median net worth of the 65 million home owners in 2000 was $55,000, which should be $3.6 trillion, whereas this report puts homeowner equity at only $1.3 trillion. This suggests that a mere 11% decrease in real estate values would completely and instantly eliminate the entire homeowner equty of all American homeowners, or even put them in debt that they could never repay at current income levels.
US Personal Savings Rate in 1999 is a negative 1-2%.
http://www.bea.doc.gov/bea/dn/pitbl.htm
Table 2.--Disposition of Personal Income [Billions of dollars]
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Seasonally adjusted at annual rates
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1997 1998 Mar. 99 Apr. 99r May 99r June 99r July 99r Aug. 99p
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Personal income....................... 6,784.0 7,126.1 7,374.9 7,406.6 7,430.3 7,486.0 7,502.8 7,541.9
Less: Personal tax and nontax payments........................... 989.0 1,098.3 1,146.1 1,152.5 1,162.9 1,171.9 1,180.2 1,173.1
Equals: Disposable personal income... 5,795.1 6,027.9 6,228.7 6,254.1 6,267.5 6,314.1 6,322.6 6,368.8
Less: Personal outlays............... 5,674.1 6,000.2 6,289.5 6,331.1 6,362.5 6,382.3 6,405.7 6,461.8
Personal consumption expenditures... 5,493.7 5,807.9 6,090.1 6,129.3 6,159.2 6,176.6 6,198.6 6,253.0
Interest paid by persons............ 161.5 172.4 179.2 180.4 182.0 184.4 185.8 187.5
Personal transfer payments to the
rest of the world (net)........... 18.9 19.9 20.2 21.3 21.3 21.3 21.3 21.3Equals: Personal saving.............. 121.0 27.7 -60.7 -77.0 -95.0 -68.2 -83.1 -93.0
Addenda:
Disposable personal income:
Chained (1992) dollars 1/........... 5,183.1 5,348.5 5,487.3 5,476.8 5,493.2 5,539.3 5,532.9 5,560.3
Per capita:
Current dollars................... 21,633 22,304 22,881 22,956 22,987 23,138 23,148 23,295
Chained (1992) dollars............ 19,349 19,790 20,158 20,103 20,147 20,299 20,257 20,337
Population (thousands).............. 267,880 270,257 272,219 272,434 272,654 272,892 273,142 273,401Personal saving as a percentage of disposable personal income ......... 2.1 0.5 -1.0 -1.2 -1.5 -1.1 -1.3 -1.5
Detailed analysis