Is business doing our saving for us?

From Tyler Cowen.

"That is the theme of my latest Bloomberg column, as U.S. household savings rates often fall between three and five percent.  From the column here is one bit:

Are such low savings rates unsustainable for an advanced economy? Not in view of America’s business saving. Looking at the US Federal Reserve’s series on undistributed business profits, it starts to rise significantly in the 1970s, and takes off around 2000 (with a dip for the financial crisis), and currently stands a bit above $1.2 trillion. There are other ways to measure business savings rates, but generally they show a significant upward move over the last few decades.

On net, gross US savings rates are hovering between 17% and 18% of GDP. Again, there are different ways to measure the relevant variables. But under any plausible approach the US is not having to survive on saving only a few percent of personal income.

This is related to those stories about some of the most successful US corporations sitting on billions of dollars. Maybe you view that as wasteful or extravagant. But a more helpful response might be: “Better them than me!”

Data on personal savings typically neglect pension plans and realized capitals gain on financial assets and homes. In that sense the personal saving rate also is higher than is typically measured. Yet here, too, much of the credit goes to business. If equities are high in value in the aggregate, that is a tribute to corporate productivity more than to brilliant investing."