Did household saving really decline in the Reagan years?

This paper challenges the conventional belief that household saving in the U.S. declined during the Reagan Years. The paper proposes a definition of the household financial surplus that is available for use by corporations and the public sector. It shows how existing measures of household saving diverge from this definition, and it proposes alternative estimates of the trend of this household financial surplus in the 1980s. These alternative estimates show no downward trend, and in most years, the available supply of funds has exceeded business and government demands.
The variable components of household saving during the Reagan administration was presented. Factors such as capital gains and capital consumptions, which are not considered by the traditional approaches in measuring household savings, are taken into account as well as other factors including financing for household extensions, capital gains and losses, social security surplus and public pension funds. It was conluded that household savings did not decline during the Reagan administration.