However, the article is misleading because it implies that there would be significant consequences if the anticipated surpluses failed to materialize. The economic impact of deficits of this magnitude would be too small for almost anyone to detect in their lives, or for economists to measure accurately. This article discusses the Commerce Department's release of data on income, consumption and savings for the month of March. This statement is extremely misleading. Savings from current income is an important concept because it corresponds to new investment in the economy.
New investment increases the economy's capacity to produce goods and services in the future.
This is why economists insist on keeping a separate accounting for savings from current income. It is also worth noting that asset prices move in both directions. Given the sharp fall in the Nasdaq in April, a savings measure that included the change in asset prices would make the savings rate appear much lower for that month. The low personal savings rate is also noteworthy because personal savings affects the economy in exactly the same way as a government budget surplus. The economic rationale for running budget surpluses is that they will make more money available for investment, which will in turn allow the economy to grow more rapidly.