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In the United States, the personal saving rate (saving as a percentage of disposable income) is just 3.8%—considerably below the high of 13% reached in the early 1970s. In Another Penny Saved, just released by Oxford Economics in cooperation with our sponsors, we examine how the US can lift its long-run economic growth rate, reduce the risk of future burdens on the taxpayer, and create more sustainable growth by increasing this rate.

• Over the next 25 years, raising the saving rate would add a discounted $7 trillion to America’s economy, equal to about half of today’s GDP; by 2040, per capita GDP would be around $3,500 higher than it would be otherwise, measured in today’s prices.
• America also would reduce its reliance on inflows of foreign capital that have enabled us to save less in recent years. Raising household saving would reduce that dependency, providing a more stable source of capital.
• By raising savings—especially retirement savings—we can empower people to be more self-sufficient: not only reducing elder poverty, but reducing the risk that taxpayers will have to shoulder the burden of an elderly poverty crisis.

Click here to read the full report.