Part II of the series
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Between 1995 and 2000 the GDP grew from 2% p.a towards 4.8% p.a ( 2.8% p.a change) at the same time the savings rate dropped from 4% to 2% ( 2 % change).
Between 2002 and 2006 Q4 the GDP grew from a 0.35% p.a towards 3.00 % p.a growth rate ( 2.65 % p.a change). The savings rate during that period dropped from 2.8% to a negative -1.2% . ( 4.00% change)
Question 2 - Is the decline in savings rate financing the growth in GDP ?
Also see ( will give indications of the fiscal policies of Republicans versus Democrats )
- USA - Fiscal situation as a percentage of GDP, under the recent four Presidencies ( since 1980 )
- USA - Relationship between Fiscal Deficit and Savings rate ( since 1981 )
- USA - Relationship between Total Debt ( data from 1929) and External debt as a % of the GDP (data from 1995)
- USA - Manner in which the Deficit has been financed since 1995 ( Savings viz external debt)
Most definitions of “savings” I’ve seen only include cash savings - like bank savings accounts - and not other forms like stock investments (direct or in mutual funds) or other forms of investments. There is evidence that many Americans are saving less cash, and some of them aren’t replacing the cash savings with equal alternate investments. But overall, I’ve yet to see a comprehensive analysis of average savings that included investment wealth.
EM
You will be glad to know that this data includes investment wealth ( its overall savings not just cash)
Every great empire reaches a peak and declines. Happened to the Greeks, Romans and British. Every month the US sends 65 billion to China who then turn around and invest it in the US. One day you’ll wake up and it won’t be made in China. It’ll be owned by China.
The thing is…..China is making huge profits from its uneven trade with the US. If trade between China and the US was more even. Then we would not have to borrow money from China because their would be more American products in China then their is now instead of the US having more Chinese products then American products. Anybody today could go to Beijing or Hong Kong and find some American products. But it would be a huge minority to the amount of Chinese and even Japanese products available. Fair trade with China would not only lower the US Debt but it would also create millions of US Jobs.