Moveover, are they taking into account pensions, 401k's, IRA's and stock portfolios? I think not.
You are correct. They are not taking into account these types of savings accounts. Consequently, their entire argument is bogus. My wife & I have $600,000 in a 401k.
No, he's not correct. Money invested in 401k's, IRA's and stock portfolios are all counted as savings.
Capital gains on those accounts are not counted as savings. The feds basically calculate savings as income, less taxes, less non-investment consumer expenditures.
Let's take a closer look at the saving rate. The Bureau of Economic Analysis starts with personal income, which includes wages (from a job or self-employment), dividends, interest, rental income (if you are a landlord), and employer contributions to health and retirement plans. From this it subtracts income tax and the employee's share of payroll taxes. The difference is disposable personal income. From this it subtracts consumer non-investment expenditures, including retail sales, utilities, interest payments on consumer debt, and money people send to friends and relatives overseas. For housing, the bureau counts rent for renters or mortgage interest, property taxes and insurance for owners. It does not subtract down payments or principal payments on a house. What's left is personal savings.http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/08/07/BUG5JE423K1.DTL
No, he's not correct. Money invested in 401k's, IRA's and stock portfolios are all counted as savings.You are mistaken. From your own post:
The difference is disposable personal income. From this it subtracts consumer non-investment expenditures, including retail sales, utilities, interest payments on consumer debt, and money people send to friends and relatives overseas. For housing, the bureau counts rent for renters or mortgage interest, property taxes and insurance for owners. It does not subtract down payments or principal payments on a house. What's left is personal savings.
Because IRA and 401k contributions are taken out first, before taxes, they are never part of disposable income and therefore not counted as savings.