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

8 
large foreign balance deficit. Thus credit must be given to the 
consumer for having saved the show. His spending on durables and 
housing made all the difference. In fact the peculiar nature of 
this boom - driven as it was not by business investment but by 
consumption - may to a great extent explain why it has lasted so 
long. The utilisation of capacity was kept high by consumption, 
exports and defense expenditure. Nor was there much chance of 
ending the boom in the alternative way, by running up against the 
ceiling of the system's capacity, because the imports offered an 
easy way out. At one point there was a scarcity of chips which 
meant a serious bottleneck, but the imports from Japan filled the 
gap until the new capacity was ready. 
II 
It is fair to say that the savings data have been shown to be 
misleading. But where is the bug? /yv\ e r- t 
No doubt it would have helped if the pension funds would have been 
made a separate sector in the NIPA instead of being a part of the 
household sector. The employer's contribution would then have been 
credited to the pension fund instead of being included in the take 
home pay. The separate treatment of the pension funds would 
reflect their ambiguous nature: They belong to the employee in so 
far as they secure his pension rights, but the surplus due to 
overfunding belongs to the employer; in a number of cases the 
corporation has raided the fund to appropriate the surplus for its 
own purposes ( Warshavsky 1988 ). 
A much more general question is the treatment of realised capital 
gains. 
The National Accounts exclude them,the flow of funds take the 
opposite view,naturally so,since they are concerned with all 
financial transactions and with assets as well as flows. 
Would it
	        

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