>Is income paid off to creditors counted as savings?
Savings is estimated as income after taxes and tax-like payments (disposable personal income) less expenditures. Interest earned is counted as income, and interest paid as expenditures. (This doesn't include mortgage interest, if I'm remembering right, which is treated as an investment, not as a form of consumption.) Obviously these aggregate numbers hide a lot of distributional details - the savings rate of the richest 1%, according to a survey by U.S. Trust, is 24%, up strongly from 1992. Obviously, their net interest ledgers are well in the black. Nationally, April's savings rate was 3.5%, which looks like the lowest monthly rate since the monthly numbers began in 1959.
According to unpublished Fed estimates, households spent 17% of disposable personal income on debt service at the end of 1997, just a hair below 1989's record (when interest rates were 4 points higher). Debt/income ratios have stabilized over the last year or so at record high levels.
Doug