tag:blogger.com,1999:blog-14245531.post115077309969668689..comments2023-11-18T01:21:55.631-05:00Comments on My Open Wallet: NYT Magazine Money IssueMadame Xhttp://www.blogger.com/profile/11536189690094235926noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-14245531.post-1150867360824553862006-06-21T01:22:00.000-04:002006-06-21T01:22:00.000-04:00There are two different things - national savings ...There are two different things - national savings rate and personal savings rate. The personal savings rate is currently negative - it doesn't include capital gains - I would have thought that 401(k) contributions are included in the personal income and savings as they are part of total employee compensation. Interest and dividends on regular taxable accounts definitely are. The national savings rate adds to the personal savings rate of individuals saving by business and (dis)saving by government. Business saving is profits they don't distribute as dividends. That's why capital gains aren't included in personal income and savings. <BR/><BR/>The national savings rate has fallen but is still positive. <BR/><BR/>Something else to remember that commentators never seem to bring up is that the personal savings rate is an average of everyone - both workers and retirees. If it is zero or negative - workers might still be saving for retirement but their saving is being offset by retirees dis-saving. As the population ages you'd expect the savings rate to decline.<BR/><BR/>It's true that social security is a disincentive for saving. Increasing inheritances are too.<BR/><BR/>In China, government enterprises used to take care of their retirees but at a very subsistence level of course through the danwei system. But as far as I know the state itself does not provide any welfare. So as private enterprise expands more and more people need to save. The very high Chinese national savings rate is not just due to personal saving. The government and business are saving at very high rates too. It's not like individuals in China typically save 40% plus of their income. More like a mean of 15-20%.mOOmhttps://www.blogger.com/profile/03440274434662150925noreply@blogger.comtag:blogger.com,1999:blog-14245531.post-1150823194414842172006-06-20T13:06:00.000-04:002006-06-20T13:06:00.000-04:00I think the other thing to consider is that China ...I think the other thing to consider is that China might not have the same social services that we do in the US, hence the need to save a lot more money than we do. The WSJ had an article recently about this sort of thing. There is a pension program in China of some kind that's going to go bankrupt soon. I'm curious to see what that will mean to the global economy. It goes hand in hand with the CNN/Money article I saw today about US Baby Boomers cashing out of the market as they retire.<BR/><BR/>I'm curious if any of your readers can comment on what kind of social security style programs are in China.mapgirlhttps://www.blogger.com/profile/06141234159609900257noreply@blogger.comtag:blogger.com,1999:blog-14245531.post-1150819202888232292006-06-20T12:00:00.000-04:002006-06-20T12:00:00.000-04:00That is a very interesting fact about the national...That is a very interesting fact about the national savings rate, Anonymous. It would be good to see the numbers both ways, since I'm pretty sure a lot of people aren't necessarily maxing out their 401ks. Also, since 401ks are a relatively recent innovation and many people used to get pensions from their employers instead, it sort of makes sense not to count them if you want an apples to apples comparison.Madame Xhttps://www.blogger.com/profile/11536189690094235926noreply@blogger.comtag:blogger.com,1999:blog-14245531.post-1150818441429475212006-06-20T11:47:00.000-04:002006-06-20T11:47:00.000-04:00A little known fact about the national savings rat...A little known fact about the national savings rate is that it actually exludes money contributed to 401(k) plans. Now, that is kind of ridiculous if you ask me! If someone is paying off their mortgage, and kicking $15,000/year into their plan, they still count as saving 0% of their income, based on the way the fed does its calculations. Also, investment earnings in regular accounts are not counted as savings either.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14245531.post-1150814982252699542006-06-20T10:49:00.000-04:002006-06-20T10:49:00.000-04:00Global warming is a sham.Global warming is a sham.Anonymousnoreply@blogger.com