"dissaving"). There are a lot of baby boomers, and they have saved up a lot of money over a lot of years. And, as you note, those who are "almost retired" are the ones currently saving the most of all the workers. When they retire, could they drive the domestic private savings rate below zero? Could they also offset the trade deficit, and drive the total non-government dollar savings rate below zero? Even if domestic private savings doesn't go negative, it would be less than it is now, and on a downward trend, I would think. Does that not also imply a downward trend in the optimal, full employment budget deficit? And in actual budget deficits, due to automatic stabilizers? And if all that is true, will it be as big a deal as the effects of the baby boom generation have been on everything else during their lifetimes? right, but from what i've read nominal savings goes up on average for older people who are only consuming, and down for younger people working for a living. you are referring to the modigliani life cycle theory, and i'm referring to the studies that refuted it, with m agreeing he was wrong. the irony was though wrong in nominal terms, m was right in real terms and never seemed to realize it. from Wiki: Background In the early 1950s,Franco Modigliani and his student Richard Brumberg developed a theory based on the observation that people make decisions regarding how much they want