Assessing the Impact of Income Tax, Social Security Tax, and Health Care Spending Cuts on U.S. Saving Rates

Economists and policymakers have been ex- pressing concern of late about the prospects for U.S. economic growth. Foremost among their concerns is the recent decline in U.S. saving. The net national saving rate, which averaged 8.5 and 4.7 percent in the 1970s and 1980s, re- spectively, registered an abysmal 1.7 percent in 1991 (see table 1). Many fear that continued low saving will constrain investment and cause productivity to stall in the future.