The U.S. personal savings rate recently turned negative, signaling that Americans are spending more than they are making. Such an assumption brings to mind the specter of destitute retirees and high-living workers. But those pictures would be false, economists explain.

• The most misleading factor is that such figures do not include wealth accumulation through stock market gains.

• Although the official American savings rate was 0.8 percent in 1997, if capital gains are included the rate rises to 8 percent.

• Moreover, the resulting tax payments made on that income -- as well as purchases that these consumers make -- are calculated as indications of reduced savings.

• Then there is the matter of the federal government paying down the national debt.

As a result, national savings -- even with the built-in bias that fails to count capital gains in the personal sector -- is currently 17 percent in the U.S. That is certainly close to Europe's 20 percent.

Source: Klaus Friedrich (Dresdner Bank A.G.), "The Real American Savings Rate," New York Times, May 4, 1999.