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Politics : Bush Administration's Media Manipulation--MediaGate? -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (5288)	9/27/2005 12:39:54 AM
From: tejek	Read Replies (1) \| Respond to of 9838

I don't know for a fact what the exact savings rate is. What I do know is that many people take advantage of their 401ks.....if even a fraction of people max out their plans then yes, the savings rate is significantly higher than the number reported and could be close to the Japanese savings rate. The savings rate of the US stinks. In fact, its very likely that the rebuilding of the Gulf coast will have to be financed by China and Japan. The following excerpts are from a speech made by Governor Ben S. Bernanke of the Federal Reserve Bank of Mpls. While in the end he concludes by putting the best spin on Americans' lack of savings, he does raise some important issues: "Of necessity, this shortfall is made up by net foreign borrowing--essentially, by making use of foreigners' saving to finance part of domestic investment. We saw earlier that the current account deficit equals the net amount that the United States borrows abroad in each period, and I have just shown that U.S. net foreign borrowing equals the excess of U.S. capital investment over U.S. national saving. It follows that the country's current account deficit equals the excess of its investment over its saving." If you go down to the first link below.......it will pull up Table 1. On that table, you will see that the account balance for the US is a deficit in the amount of $-530 billion. That means we have needed $530 billion in excess of monies provided by our savings rate for investments in the US. That's money we've had to go out to the world markets for funding. Meanwhile, Japan has a surplus of $138 billion. That's how much of the people's savings is left after all the investment that is done in Japan is expensed out. Japan doesn't have to go to the global markets to fund it's infrastructure improvements because its savings rate is more than sufficient. "Table 1 provides a basis for a discussion of recent changes in global saving and financial flows by showing current account balances for different countries and regions, in billions of U.S. dollars, for the years 1996 (just before the U.S. current account deficit began to balloon) and 2003 (the most recent year for which complete data are available). I should note that these current account balances of necessity reflect realized patterns of investment and saving rather than changes in the rates of investment and saving desired from an ex ante perspective. Nevertheless, changes in the pattern of current account balances together with knowledge of changes in real interest rates should provide useful clues about shifts in the global supply of and demand for saving." The governor is being very kind as well as political.........the deficit did not start to grow substantially until after Bush took office. federalreserve.gov