>Opinions differ on whether this is a negative; mine is that tax policy
>in the US has shifted what "national savings rate" means to the point
>where it can't really be compared around the world. So it's one of
>those misunderstood terms that people use to get their point across: MY
>GOD, THE SAVINGS RATE IN THE US IS AT AN ALL-TIME LOW!!!
>
>I'm not sure what point they are trying to make.
We've been through this before, but once again: it means that many individuals have little or no savings, leaving them extremely vulnerable to unemployment and social security privatization; it means that consumption has been sustained by devoting a historically unprecedented share of current income - and, through borrowing, future income - to buying stuff. Over 100% of the growth in income in the 90s expansion was consumed, a higher share than in the post-WW II years, a time of catch-up after 15 years of depression and war. Should people start saving again, there could be an interesting period of adjustment for the U.S. economy, which has gotten dependent on imprudent behavior (lots of itself dependent on heavy foreign capital inflows).
Doug