Increasing National Saving: Are IRAs the Answer?
Saving, so advised the proverbial ant to the spendthrift grasshopper, allows an individual to “prepare today for the wants of tomorrow.” Likewise for an economy, national saving provides resources for capital accumulation, expanding the economy’s future productive capacity and hence its future potential output. The precipitous decline in average saving rates during the 1980s, as measured by the National Income and Product Accounts (NIPA), has convinced many that we have become a nation of grasshoppers in need of policies that will turn us back into a nation of ants.
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