Again, Savings Has Not Increased
Contrary to what Baker asserts, there is no reason to believe that the income measure of GDP is really more reliable than the production side. Other data measuring for example profits and the labor market is more consistent with the income numbers. And more importantly, even if we for the sake of the argument accepts that the production numbers are 100% accurate, it is still the case that savings has dropped.
In the second quarter of 2006, government (18,8%) and consumer spending (69,4%) totaled 88,2% of GDP, leaving a gross savings rate of 11.8%. In the second quarter of 2009 by contrast government (20,7%) and consumer spending (70,7%) had risen to a total of 91,4%, meaning that the gross savings rate had dropped to 8,6%. Even if we add the government spending classified as investments to the savings rate, that doesn't change the fact that total savings is down, from 14,8% to 12,3%.
Furthermore it should be noted that durable goods consumption is down. As durable goods purchases, unlike purchases of services and non-durable goods, is partly a form of savings that means that the decline in total savings is even larger. If we add durable goods to savings, this means that it has declined from 23,2% to 19,4%.
And note that all of these numbers come from the production based approach. If you find it likely that at least some of the swing in statistical discrepancy reflects that the production approach has underestimated the severity of the recession, then savings has dropped even more. So no matter how you look at it, savings has declined significantly during this slump.