Center for American Progress

How the Universal Savings Credit Will Help Americans Rebuild Wealth

How the Universal Savings Credit Will Help Americans Rebuild Wealth

A new CAP issue brief discusses how implementing the Universal Savings Credit will help low- and middle-income Americans struggling to recover from the Great Recession.

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The financial crisis of 2007 to 2009 took a tremendous toll on household wealth and shattered the sense of financial security for millions of American families. American households lost more than $20 trillion in wealth (in 2012 dollars) in the Great Recession, and households still had $10 trillion less in wealth at the end of 2012 than they had before the crisis. This massive wealth decline contributed to a widespread loss of economic security, particularly among lower-income and moderate-income families, single women, and communities of color.

This economic insecurity can have long-ranging adverse effects on U.S. economic growth as American families:

  • Invest less in new businesses, which slows productivity growth and innovation
  • Save less for large long-term expenses such as retirement and their children’s college tuitions, which leads to less-stable financing for capital investments
  • Become less likely than they would with more wealth to switch jobs and careers when better opportunities arise, which slows employees’ productivity

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