The U.S. Saving Rate
The recent economic slowdown has shrunk federal revenues, reduced projected budget surpluses, and drawn policymakers’ attention to a difficult dilemma. Fulfilling benefit promises under Social Security and Medicare will be easier if the economy grows rapidly. This, in turn, depends on how much the nation saves and invests. Because federal surpluses add to national saving, some believe that the recent tax cut should be scaled back and federal spending curbed. Doing so, however, could erode the chance of a quick economic rebound in the short term.
Suggested citation: "The U.S. Saving Rate," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-09, pp. 13, 09.01.2001.