The Decline in Saving A Threat to America's Prosperity?

by Bosworth, Barry P.

• ISBN13: 9780815721352
• ISBN10: 0815721358
• Format: Paperback
• Copyright: 2012-02-02
• Publisher: Brookings Institution Press

Summary

In The Decline in Saving, Brookings economist Barry Bosworth examines why saving rates in the United States have fallen so precipitously over the past quarter century and why the consequences were initially so benign. He looks at global comparisons and explains why saving rates have been so different in other countries. 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 theirwealth 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, thecumulative external deficit has exceeded $7 trillion, leaving the United States as the world's largest debtor nation. Not only does Bosworth contemplate how reduced saving will affect the future wellbeing of Americans, but he also provides alternative measures of saving, tracks data on household saving decline, compares international saving patterns, and discusses consequences of low saving. The Decline in Savingprovides an extensive and unparalleled account of the complexity of present saving patterns, an issue made even more serious by the 2008-09 global economic and financial crisis. Bosworth objectively examines saving at both the level of individual households and the aggregate economy to understand if declining saving truly is a threat to America's prosperity.