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CIAO DATE: 04/05
Should Americans Save More?
John H. Makin
February 2005
The American Enterprise Institute for Public Policy Research
Abstract
Alarmists who call for American households to save more point to a steady drop in the conventionally measured U.S. saving rate to about 1 percent at the end of last year and to a rise in household debt to a level well over 100 percent of personal disposable income. The current account deficit, our external deficit, measures national dis-saving at close to 6 percent of GDP. The federal governments budget deficit contributes about 4 percentage points to national dis-saving and it, too, is the subject of considerable hand-wringing by those who point to a need for higher U.S. saving at both the household and national levels. years, Americas real net worth has risen by nearly 80 percent (about 4 percent per year), while Japans wealth has actually dropped despite its much higher saving rate.
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