SAVINGS, INVESTMENT & DEBT OWNERSHIP 
SAVINGS, INVESTMENT AND DEBT OWNERSHIP

Individuals and businesses seek to increase their assets through savings and investments. They also borrow to purchase assets or finance business opportunities. The financial services industry exists to manage these activities, bringing savers, investors and borrowers together, a process known as financial intermediation. The banking industry acts as an intermediary by taking deposits and lending the funds to those who need credit. The securities industry fulfills the role of intermediary by facilitating the process of buying and selling corporate debt and equity to investors. The insurance industry safeguards the assets of its policyholders, investing the premiums it collects in corporate and government securities. Finance companies provide credit to both individuals and businesses, funded in large part by issuing bonds, asset-backed securities and commercial paper.
NATIONAL SAVINGS

Gross national savings is the excess of production over cost, or earnings over spending. Gross national savings grew in the late 1990s, fueled largely by increased saving by federal, state and local governments, but fell in the three years, 2000 to 2002. Beginning in 2002, total government saving turned negative due to federal personal income tax refunds and rising expenditures at all levels of government. In 2005, governments spent $313 billion more than they received, compared with $395 billion in 2004. Personal saving is the excess of personal disposable income over spending. Personal savings turned negative in 2005, dropping by 120 percent from the previous year.
GROSS NATIONAL SAVINGS, 2001-2005

($ billions)



(1) Includes individuals (including proprietors and partnerships), nonprofit institutions primarily serving individuals, life insurance carriers and miscellaneous entities.

Source: U.S. Department of Commerce, Bureau of Economic Analysis.


  • National savings grew by $68 billion from $1,544 billion in 2004 to $1,612 billion in 2005.

  • National savings accounted for 13 percent of the 2005 gross domestic product of $12.5 trillion.