Economic Growth News Story Household saving in the United States is significantly below the rate in other countries and has declined in recent years. It is estimated that only 40 percent of baby boomers will have enough savings to support their living standard at retirement. Reduced savings not only affect individual families, but the nation as a whole.
Economic growth is dependent upon investment, which is tied to savings.
In order to stimulate savings, Senators Coverdell and Torricelli have proposed a number of tax breaks. In 1992 the U.S. personal savings rate was 5.7 percent, compared with savings rates of over 15 percent in Japan and over 10 percent in Germany. Since 1992 the savings rate has plummeted to the point where it recently became negative. If present trends continue, some economists predict negative savings rates in the future. Retirement savings are also a problem, because more than 50 million workers have no pension plans other than Social Security.