All told, if households viewed taxes on capital gains as a subtraction from those gains and not from income and, further, if households viewed benefit payments received from defined-benefit plans as income rather than their employers’ contributions (as well as the investment income of the plans), perceived disposable income in 2000 would have been higher as would the personal saving rate.
Let me elaborate on each of these measures a little. First, we are among the large countries with the highest consumer price inflation in the world, even though growth is weaker than we would like it to be. Much of the inflation is concentrated in food and services. Our households are turning to gold because they find financial investments unattractive.