Americans on average save less than 1% of their after-tax income today compared to 7% in the early 1990s. US citizens save less due to higher housing costs and interest rates. Many homeowners believe that rising property values ​​provide them with much-needed savings that they would otherwise have set aside. The real estate boom, like the stock market boom before it, allowed Americans to save without having to reduce consumption. As the value of their assets increases, people naturally feel richer. Consumer spending has held up not because incomes have risen, but because consumers have taken on more debt, mostly by borrowing against rapidly rising home prices. The marginal propensity to consume is influenced by consumer confidence and interest rates as they influence the rate of return on savings. With fewer dollars available as savings to banks and other financial institutions, interest rates are higher for both savers and borrowers than they would otherwise be. . This makes it more expensive to finance investments in factories, equipment and other assets, which slows GDP growth. The lower savings rate means a higher consumption rate, which stimulates more spending, more income and therefore more spending, on its own. -feeding process known as multiplier effect. People don't save for the sake of saving. They save to spread consumption across their lives. The United States also has a consumerist culture, with consumers always having to “keep up with the Joneses.” Children appear to be entitled to meritorious possessions that other children possess. Because consumers will spend more rather than save, equilibrium GDP will not be in balance. Unemployment and inflation will occur because low spending by investors does not balance the low saving rate of consumers. Our high-consumption, low-savings economy has only worked because our European and Asian allies have been willing to save and produce more than they consume..