----- Original Message ----- From: "Erik Reuter" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Saturday, January 22, 2005 9:05 PM Subject: Re: Social Security
> * Dan Minette ([EMAIL PROTECTED]) wrote: > > > What was the time lag between the start of social security and the > > depression of national savings? Since national savings didn't start > > dropping noticably until the '90s, when they fell through the floor, > > Actually, no, there was a broad peak from about 1981 to 1985, and then > personal savings rate trended downard from then on. Well, I just plotted the yearly series from '59, which is: 1959 7.6 1960 7.3 1961 8.4 1962 8.4 1963 7.8 1964 8.8 1965 8.6 1966 8.3 1967 9.5 1968 8.5 1969 7.8 1970 9.4 1971 10.1 1972 8.9 1973 10.5 1974 10.6 1975 10.6 1976 9.4 1977 8.7 1978 8.9 1979 8.9 1980 10.0 1981 10.8 1982 11.2 1983 9.0 1984 10.8 1985 9.0 1986 8.2 1987 7.0 1988 7.3 1989 7.2 1990 7.0 1991 7.3 1992 7.7 1993 5.8 1994 4.8 1995 4.7 1996 4.0 1997 3.7 1998 4.3 1999 2.4 2000 2.4 2001 1.8 2002 2.0 2003 1.4 2004 0.8 I see a gentle rise from about 8% in '59-'63 to roughly 10% in '80 to '84 range, with some structure during the '70s. Then between '84 and '87 there is a fall to about 7%. And then a big drop from 1993 to 2004. It is true that the average savings rate from '80-'84 is higher than it is from '71 to '75, but the difference is only .3%, well within pure statistics...(assuming that variations within the 5 year averages are random and the statistical uncertainty for the 5 year average is the year-by-year SD/sqrt(5). > Incidentally, that is the time that the baby boomers should have been > saving a lot for their retirement. Most folks save/saved for their retirement in their '50s and early '60s, after college expenses were paid. Savings is rather complicated, because is sorta includes pensions. Fixed value pensions were phenomenal for those workers who put 30 years in. The '80s were around the time that the culture shifted from staying through one company for life to shifting from job to job. Around '86, the babby boomers were 23-40....which are not peak savings years. Further, the fix didn't stop folks my age from figuring they wouldn't really get SS, especially since Reagan's deficits kept eating up the SS fund and then some. >Maybe they thought that since > Greenspan "fixed" social security, they didn't have to save? > http://research.stlouisfed.org/fred2/series/PSAVERT/112/Max > My source was in a different part of that website: http://research.stlouisfed.org/fred2/data/PSAVERT.txt One final way to look at it is to look at the averages and SD over time. Over the whole time, the average is 7.3+/-2.8 years. From '59 to '92, it is 8.8+/-1.2 yeas, and from '93-'04 it is 3.2+/-1.6 years. I guess there are a couple ways of interpreting it, and I can see eyeballing a big slide from the max in 1984 to the min in 1987 (3.8%). But, it becomes much smaller if one starts at 1983 (2.0%), so that measurement is dependant on the years picked. But, for the '90s slide, you cannot almost cut the slip in half by moving the starting point up a year. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
