Net Savings went Negative

Post #588

Net savings are what you have left over after paying for the upkeep of capital goods, offsetting the wear-and-tear in them called “depreciation.” They are true savings in that they can be used for investments into the future.

But if net savings goes negative, then that means that your economy is so poor that it cannot even pay for the upkeep of existing capital, let alone save for the future:

In the first half of 2023, net saving went negative for the United States, indicating that government has been interfering so much in the private sector that it was not even possible to make enough money to pay for the upkeep of existing capital.

But notice how under more economic freedom (1948 - 1969) it was common to have “double-digit” net savings, making it possible to continually improve the standard of living inside of the USA. Because of “interventionism” and “public-private partnerships” we cannot even make enough money to stay in the same place anymore.

To escape worse consequences, both the size and scope of government must be cut.

Reference

U.S. Bureau of Economic Analysis, Net saving as a percentage of gross national income [W207RC1Q156SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/W207RC1Q156SBEA