From: fester@island.COM (Mike Fester)
Subject: Re: DOES AMERICA SAY YES TO JAPAN? - Off track!!
Organization: /usr/local/rn/organization
Date: Mon, 28 Dec 1992 16:17:35 GMT

In article <1992Dec24.204839.21430@acuson.com> miklg@acuson.com (Michael Goldman ) writes:
>fester@island.COM (Mike Fester) writes:
>
>>In article <1992Dec21.220326.21127@chpc.org> rboudrie@chpc.org (Rob Boudrie) writes:
>>>
>>>>> That's part of the reason why there is less actual wealth in the US
>>>>>to invest. (I don't defend the shitty savings rate of Americans,
>>>>>although there is more than a casual relationship between small (or
>>>>>no) paychecks and savings.)

>>>I think that Japanese citizens are expected to save for their retirement
>>>rather than "let the gummit do it for them". 

>	Which suggests that total national savings should include the
>	retirement funds in each country as well as individual savings.

Mostly agree EXCEPT that these retirements funds have a tendency to be used as
emergency funds for a struggling business. Admittedly, a private individual may
do the same thing, however, that individual has no control over how someone
else handles his retirement fund. BTW, read Drucker (that name again) for more
on how retirement funds account for the largest "bloc" of stock holding in the
US today.

>>However, after the Japanese have spent a larger proportion of their salary on
>>food and rent, their disposable income is still not as high as ours. It is
>>therefore a problem with our lack of willingness to save. 
>
>	As is pointed out in "Trading Places", the Japanese savings rate was
>	not particularly high until the govt. changed the tax laws to exempt
>	a certain amount from taxes - sort of like an IRA.  I think the US
>	savings rate should be modified to include the enormous pension
>	funds which are enforced savings.

Similarly pointed out in van Wolferen's book. The Japanese tax laws allow a 
personal savings account of up to (I believe) about $100,000 at the current
exchange rate with the interest being tax free. There are about twice as many
such accounts in Japan as there are people eligible for such accounts, and the
government makes (as yet) no attempt to correct this. 

BTW, IRA's are exempt only for a while. It also used to be that normal interest 
on savings account was exempt up to a certain amount in this country as well.
That has been chnaged.

>	Japanese personal savings are still quite high - on the order
>	of $70,000 to $100,000.  However, the savings rate has dropped
>	considerably the last few years, from 20% to 7.5% annually in
>	1990, and 6.5% in 1991.  Further, Japanese
>	personal debt now exceeds that of Americans at about $6K-$7K
>	per person.  The reason for the dramatic change seems to be the
>	explosion of credit cards in Japan, the high inflation and the
>	slowing of growth.  Since savings usually come out of the twice
>	yearly bonus, and that has declined considerably recently, from
>	an average of 35% to sometimes as low as 6-10%.  Wages have not
>	kept up with inflation, and so just as in the US, people are
>	saving less and working longer, just to stay even.  The average
>	personal income is less now than 10 years ago, after adjusting
>	for inflation.
>
>
>>BTW, in the 1993 World Almanac, they have a chart for taxes, total income, 
>>savings rates, etc, over the last 30 odd years. While total taxes have remained
>>about the same (~12.7%), savings rate has dropped 2%, since 1965.
>
>	My 92 Almanac has US savings as a % of disposable income fluctuating
>	over the past 30 years, 5.6% in 1960, 7.1% in 1965, and so on. It
>	seems to have satbilized around 4.6% with a slight upward trend.

Mine shows a bottoming out in 1987 (3.2%) with nothing yet approaching the 
6-8% of the 1965 -1982 period.

Mike
-- 
Disclaimer - Oh come on! You didn't think I was serious, did you?