Since the old, who have shorter time horizons, have larger propensities to consume than do the young, this transfer has fueled a huge increase in personal consumption, reducing our national saving rate (saving as a share of national income) from 10 to 15% in the 1950s and 60s to a negative 1.5% last year.
That has required us to make up the difference between our national investment and national saving by borrowing abroad in the form of the capital inflow that finances our trade deficit.
FORBES: Tough Truths About The Dollar, The Debt and The Economy
Those three forms of national saving fall short of national investment and have to be supplemented by an inflow of foreign saving.
National saving is composed of personal saving, business saving, and government saving, i.e. an excess of tax revenue over expenditures.
Our national saving, consisting of personal saving, business saving, and government saving, has been inadequate, in part because the government saving component, measured by the budget balance, has been negative rather than positive.
FORBES: Tough Truths About The Dollar, The Debt and The Economy
However, net negative government saving (the budget deficit) overwhelms the others and make total national saving negative.
You appear to accept this key role of the increase in national saving and to acknowledge that such an increase in saving would occur with a Bush-type plan.
Mr Manuel sees his fiscal surplus as the government's contribution to a national saving effort.
ECONOMIST: The South African state has a welcome fiscal problem
The recent rise in national saving was led by the government and the corporate sector.
This spending has driven our national saving rate from 14 percent in the fifties to 1 percent now.
Either that, or domestic investment must decline to match the lower national saving.
And firms, not households, account for the recent rise in net national saving.
But running such a deficit would, other things being equal, reduce national saving.
ECONOMIST: Social Security reform: The battle of the boffins | The
How far a cyclical slowdown in investment translates into a rise in China's national saving surplus also depends on how consumers react.
Whether the Bush plan really will increase national saving, however, is doubtful.
ECONOMIST: Social Security reform: The battle of the boffins | The
These harmful side-effects might be tolerable if compulsory savings served to boost national saving, and if this led to higher investment and faster growth.
But only if the Social Security surplus was spent, as it always has been, would Mr Bush's plan automatically ensure that national saving would rise.
But although households account for a large part of China's exalted national saving rate, they were not responsible for the sharp rise in national thrift since 2000.
National saving rates in the region have remained relatively stable.
ECONOMIST: Why oil exporters and East Asians are reluctant to spend
Messrs Feldstein and Samwick assume that the creation of individual retirement accounts will result in higher national saving, which in turn will raise capital formation and thus corporate-tax revenue.
ECONOMIST: Social Security reform: The battle of the boffins | The
In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment which in turn would lower income growth in the United States.
These included increasing the basic state pension in line with earnings, basing eligibility for the state pension on residency, introducing a universal pension for the over-75s and creating a National Pensions Saving Scheme with compulsory employer contributions.
We believe that the key to strengthening future pension benefits and reducing future Social Security taxes is to increase national saving over the next several decades by diverting budget surpluses to Personal Retirement Accounts, rather than spending those government surpluses as they have been in the past.
But it reaps enormous rewards in generating global good will, boosting national security, saving lives and creating a safer, more stable world for all of us.
FORBES: With Continued U.S. Support, an AIDS-Free Generation Is Possible
Mr Bush will assert that he is miles ahead of Mr Kerry on national security saving special scorn for Mr Kerry's call, after the cold war's end, to cut the budget of intelligence-gathering agencies.
Consumers have surprised me in their ability to consume and save at the same time, even though much of the saving is being supported by transfer payments and the national impact so far has been offset by the negative saving of the government.
But the government's hesitation in saving its national champions nonetheless demonstrates its fiscal limits.
In May, trucking giant Schneider National adopted its own fuel saving policy.
应用推荐