● The Decline in Saving: A Threat to America’s Prosperity?
By Barry Bosworth
Summary via publisher, Brookings Institution Press
ongtime Brookings economist and former presidential adviser Barry Bosworth examines why saving rates in the United States have fallen so precipitously over the past quarter century, why the initial consequences were surprisingly benign, and how reduced saving will affect the future well-being of Americans. The saving of American households underwent an astonishing collapse in the years before the financial crisis as consumers engaged in a long-lived spending binge. More recently, however, that saving rate has risen as households attempt to rebuild their wealth in the aftermath of large stock market and housing losses. It was not only consumers who were guilty of overspending; budget deficits grew as the government borrowed huge sums from the rest of the world. Indeed, over the past three decades, the cumulative external deficit has exceeded $7 trillion, leaving the United States as the world’s largest debtor nation.
