Savings rate problems

Government statistics do not tell the whole truth. Recently you will have heard in the national media and your local media that the country’s savings rate is at 1.1% and declining. In some cases the rate may already be negative, by which you are to understand that people are spending way more than they are earning. This is bad because if there is an economic downturn or a sudden rise in price of some item of necessity such as gasoline prices, Americans will not be able to handle any sort of micro-recession. The effect will snowball and create huge problems for our economy etc…

The facts missing in the story are that the government-surveyed savings rate does not include private pension plans such as 401K, Roth/IRAs, Keoghs, and so on. The savings rate also fails to include your investment in your own home. When these factors are worked into the savings-rate algorithim, which apparently only covers savings accounts, checking accounts, money-market accounts, piggy banks, and glass jars buried in back yards, the savings rate jumps up to 52% of American having some sort of private pension account. This account does not include the Social Security amount, so the number is even highter. This means that the US economy is healthier than listed.
There is more here at Yahoo or here.

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