Definition – What are public savings?
Public savings is the amount of excess revenue that the government brings in over their expenses.
If the result is positive, it means that tax revenue is higher than the amount they spend.
If the result is negative, it means that tax revenue is lower than the amount that is spent.
Formula – How to calculate public savings
Public Savings = Tax – Government Spending
In a country, tax is $500,000 and government spending is $300,000.
Public Savings = $500,000 – $300,000 = $200,000
Therefore, public savings is $200,000.
Sources and more resources
- Wikipedia – National Savings – Description of how to calculate the national savings as well as public and private savings in an economy.
- Econ101help.com – How to calculate National Savings, Public Savings and Private Savings – A description and example formulas for savings calculations.
- Khan Academy – National Savings and Investment – Part of a larger course on Macroeconomics, this video details national savings (including public savings).