Econ: What are National Savings?

What are National Savings? National savings is a US Commerce Dept. estimate, based on voluminous data, as to the rate of savings among companies, government and individuals after a tally of total expenditures has been deducted from income. For most of the latter 20th century to the present, the National Savings rate has been lower due to government deficits.

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up cash for your utilities your Internet service your phone

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a few trips to the go kart track and maybe

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buy your mom flowers for her birthday Well at the

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end of the month you have twelve dollars seventeen cents

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a left That goes into your savings account the same

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starter savings account you first opened when you were twelve

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Well that twelve dollars seventeen cents also gets counted in

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the national savings total Well your twelve dollars seventeen cents

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gets added to the one hundred million dollars or so

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that a hedge fund manager made and paid himself for

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basically pushing people's money around and taking a big fat

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fee for it So he keeps that money That's his

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savings And then you have all the other money saved

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by people in companies and governments in the country They

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all get added up All of that dough is totaled

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two comprise the national savings well in practice The national

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savings figure isn't calculated by adding everyone's bank accounts Jeff

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Bezos Finances are much more complicated than those in York

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you know junior savings account which still entitles you to

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a lollypop with every deposit It might be hard to

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get a firm grasp on just how much money Bezos

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has saved a pay for the eventual vacation community on

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the moon he plans to build with Ellen Moscow actually

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may be the new one is going to be built

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on Mars What do you think Well getting those savings

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numbers may be difficult to get Teo because well for

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Bezos and Musk most of their wealth is in stock

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It hasn't been converted to cash savings so it just

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sits there and it goes up with the market or

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a little better than the market these days anyway Meanwhile

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other people are burying cash in Mason jars in the

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backyard In case you know the zombie apocalypse comes back

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and all the bank's just go away or shut down

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we're getting a good estimate on these totals in total

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savings numbers is difficult So instead of adding up all

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the savings account totals National savings is calculated a different

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way Instead the figure is computed by taking the amount

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of money people earn in a period when just subtracting

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the amount they spend Yes very clever Well people either

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spend or save their money That's the assumption here What

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they didn't spend well they must have saved right Well

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in terms of an equation national savings equals disposable personal

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income minus personal consumption expenditures That's the big equation Well

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disposable personal income represents the amount left over in people's

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paychecks after they pay their taxes The amount they have

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available to spend or save is you know what's left

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well Meanwhile personal consumption expenditures represent the spending total The

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difference between the two Well that's what's been saved when

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comparing country's national savings is given as a rate like

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big countries will always have a big total for savings

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but it doesn't mean that they're good at saving So

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to compare you need to compute a rate of savings

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So for that computation to take place you take the

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amount saved and calculate the ratio of that number with

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the country's GDP That figure then gives you the national

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savings rate Some countries save a lot Others say very

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little So you know on one end of the spectrum

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you've got the Singapore here It had a national savings

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rate of Yes forty six point five percent of GDP

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in two thousand seventeen Close toe Half of the money

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earned in the country went to savings on the other

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end You've got grease Hello Bankrupt Greece Yes we feel

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your shame Savings rate of only ten point nine percent

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in two thousand seventeen Little over ten percent of the

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money earned their got saved Meaning Just under ninety percent

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of it got spent as soon as it arrived Well

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the U S is a lot closer to Greece Sadly

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on the list it's gross National savings rate told seventeen

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and a half percent in two thousand seventeen And before

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you start yelling at your family at the next Thanksgiving

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about how they need to save more the low savings

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rate is largely the government's fault Yes White House We're

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looking at you National savings includes government figures Well part

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of the issue for the U S is that the

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federal government runs a heavy deficit mat number that spend

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leaps into the overall savings rate for the country for

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the federal government ran a deficit of six hundred sixty

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five billion dollars in two thousand seventeen cost us a

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fortune and it had taken off a lot of our

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twelve dollars seventeen cent deposits into our junior savings account

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Tio you know cancel all that huge government debt out

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So what We just eat it That's it National savings