Mr Gourinchas doubts that depressing the exchange rate could sustain a high rate of saving for long.
Households appear to have a target rate of saving in order to meet expected expenditures for housing, education, healthcare, and retirement.
The second result from a rise in capital gains taxes is that it would change the return on investment which would lower the overall rate of saving and investing and as a consequence lower the overall capital investment which in turn would lower GDP growth and expansion.
The combined saving rate of households and firms in America has already fallen to its lowest level ever.
Another impediment to rapid growth is India's saving rate of 24%, only half China's rate and too low to finance the required investment in industry and infrastructure.
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What kind of a signal is this proposal to Americans who are only saving at a rate of 2.5%, rather than 6.5%, who have seen defined pension plans phased out, and who are frightened about how they are going to be able to afford the last 20 years of their life?
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If share prices plunge, a low personal saving rate provides less of a cushion than a high one.
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.
If you both have good to excellent credit, that will go a long way to improve your approval odds and the likelihood of landing the lowest interest rate and saving the most money.
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"The monthly up-and-down pattern in the saving rate over the course of the second quarter reflects nothing more than consumer smoothing through transitory income fluctuations--in this case, due to the one-time stimulus payments, " said Mike Feroli, senior economist at JPMorgan Chase.
China's saving rate, at 51% of GDP, is even higher than its investment rate.
With a savings rate of barely 4% of GDP, the average US household is unlikely to be over-saving.
America's total saving rate fell in the third quarter of last year to only 10% of GDP, barely half its level a decade ago.
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.
This means that there is plenty of scope for a rapid rise in consumption, if only households can become confident enough to lower their saving rate to the 12% level of the early 1990s and use up some of their past savings.
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As a result, the household saving rate is now a negative 2% of disposable income.
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On a microeconomic level, China has a very high household saving rate, accounting for about 25 percent of its GDP.
Workers are defaulted into a commitment to increase their saving rate later, thus putting off the pain of having less cash to spend.
Refinancing applications jumped 30 percent last week, to more than double the rate we had last fall, saving the average homeowner hundreds of dollars a month -- the equivalent of a generous tax cut.
Because the government is a major provider of health care, slowing the growth rate of health care costs would lower the deficit and thus raise public saving.
Squeezing down current consumption and encouraging maximum saving and investment produces a higher growth rate and higher standard of living some time in the future.
The Lib Dems, who want to lower the basic rate of income tax, said the plans would only result in a marginal saving for people on average incomes.
South Korea is the big exception: households have as much debt relative to their income as Americans and their saving rate has fallen over the past decade from 18% of disposable income to only 4%.
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Yet, despite this fantastic success rate, kids are now in danger of facing this disease without this life saving drug all because manufacturing the medicine is no longer as profitable for the pharmaceutical companies as it once was.
Instead, his legacy will linger in the shape of the biggest economic imbalances in American history: a negative household saving rate and a record current-account deficit (see chart 1).
Consumers have borrowed more money against the rising value of their homes, allowing them to extract some of their capital gains and so spend more than their income: the saving rate has fallen from 9% in 1990 to minus 2% last year.
Indeed, one of the strongest arguments for a shift to individual provision is that it should raise the personal saving rate, which would help to foster economic growth.
As saving is the opposite of spending, I expect that we will see an acceleration of the savings rate when third and fourth quarter savings rates of 2008 are published.
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