Full text: Capital Gains, Pension Funds and

action of the multiplier additional consumption,increasing incomeg 
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until the total saving out of them equals the original consumption 
which is equal to the realised capital gains. Thus the saving 
which corresponds to the realised capital gains has been recreated 
in a macroeconomic sense. At the same time an expansion of income 
and consumption has been engendered by the boom in land values, 
financed presumably by the banks. 
As already stated the consumption and .income appear in the 
national accounts^ but their cause and origin is hidden. The 
consumption equivalent to the capital gains comes out of the blue 
sky since the capital gain is not income, and.therefore leads to 
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an apparent reduction of the- saving^,ratio. The SNA in fact 
erroneously supposes that the increase in the value of land,shares 
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etc is financed out of existing saving/, that is it is—equivalent 
t6 dissaving. In reality it is financed by the realised capital 
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gains which are saved* directly^or indirectly^ by the action of 
the multiplier. 
The case of the pension funds is not different from that of the 
land. The gain in the share value created by the take-overs leads 
to saving which is realised by the corporation in form of 
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reduction of the contribution. The employees in reality do not 
suffer a loss because the capital gains offset the loss in 
After so much statistics a word on economic policy. There has been 
a system of national old age insurance even before there existed 
pension funds. Its principle has been that the active people 
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support the retired old ones/. This i& in fact as it always has 
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been, and as,in essence, it must be under any system; but it was 
made into a national institution with fixed contributions by

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