80 MULTIPLE PURPOSE RIVER DEVELOPMENT 



Saving and Investment in the United States 



Before turning to our methods of estimation, let us take a quick 

 look at some rather rough, but revealing, figures about the capital 

 formation of the United States in the year 1955, which will serve 

 as a background for the analysis. Table 3 indicates the total gross 

 investment of the major sectors of the economy, defined somewhat 

 more broadly than in the standard national income accounts — 

 though even the set of categories used here misses large amounts of 

 investment by government. The startlingly large figure for house- 

 holds, $52 billion, is offset to a significant degree by the deprecia- 

 tion of "durables" which last only a relatively few years, and 



TABLE 3. Gross Capital Formation in the United States, 1955 



Sector ($ billion) 



Households: 



Residential construction 17 



Automobiles 17 



Other durables 18 52 



Corporate business: 



Plant and equipment expenditures 25 



Inventory investment 4 



Other 1 30 



Unincorporated business: 



Plant and equipment expenditures 4 4 



Farms: 



Construction and equipment 4 4 



Government: 



Federal construction 3 



State and local construction 9 12 



Total 102 



similarly for some of the other items. Yet it is clear that much 

 investment occurs outside the business sectors; in fact each sector 

 plays a significant part in the process of capital formation. 



In the financing of these investments, there are significant depar- 



