Full text: Capital Gains, Pension Funds and the Low Savings Ratio in the United States

5 
is overfunding and the provisions have been made more stringent 
recently (Munnel 1987).In fact the employers contributions have 
declined absolutely from 1981 to 1987 by almost $10 billion;since 
they would normally be expected to rise roughly in the same 
proportion as the national wage bill we should have expected the 
contributions to be $ 90 billion instead of 50 billion in 1987 so 
that they have relatively speaking declined by $40 billion. 
A.Munnel gives an estimate of $30 billion up to 1980 (Munnel 
1987). This caused a corresponding decline in personal saving as 
shown by NIPA. If we add to this the spurious decline on account 
of the excess of benefits over investment income (see above) we 
get $ 60 to 75 billion which corresponds to about 2 to 2.5 per 
cent of disposable income.To this extent the reduction in the 
saving ratio is thus explained by factors which have nothing to do 
with the propensity to save in the accustomed sense. On the face 
of it you would say that the reduction in contributions has 
shifted saving from the household to the corporate sector. But the 
point is really that the whole change has been caused by the 
overfunding of the pension funds whose realised capital gains have 
been shifted to the corporation in form of reduced 
contributions.The question may be left open what the corporation 
does with it:Whether they keep it,or pay it out as dividends which 
partly becomes consumption,or whether they pass it on in form of 
reduced prices (with constant mark up,in Kaleckian fashion) which 
leads to increased consumption ultimately financed by the capital 
gains.The genuine saving is therefore considerably higher than an 
uncritical interpretation of the saving ratio would make it 
appear. 
The preceding analysis deals only with the financial saving of 
households. It is of interest to find that also the data on saving
	        

Note to user

Dear user,

In response to current developments in the web technology used by the Goobi viewer, the software no longer supports your browser.

Please use one of the following browsers to display this page correctly.

Thank you.