Americans Are Not Saving: Should We Worry?
Much has been made in recent months of the low personal saving rate in the U.S. The rate’s drop from around 5% in the early 1990s to 0% today is a cause of serious concern. Many take it as a sign that the current expansion is very fragile and about to end. The argument runs as follows. The saving rate is unsustainably low, and must increase sooner or later. When it does, consumption must go down and this expansion will end.