Some Pros See Small Savers Helping Spur New Growth

CAN the average American do more to spur the United States economy than the federal government? Some economists look toward a stepped-up national savings rate as a way to generate growth. They hope that as recession-wary consumers save more, accumulated capital will provide investment dollars for US industry and infrastructure, including utilities, transportation, and communications.

When they point to stronger future private savings, they stress that Washington's public hands are tied. To reduce the federal deficit, the White House and Congress are pressed to cut spending and increase taxes - not exactly stimulants for economic activity.

The savings rate is determined by subtracting consumption from disposable income. ``The consensus forecast is that the savings rate will increase to approximately 10 percent by the year 2000,'' says economist John Minor, who monitors US monetary policy with the Parallel Fed, a private organization. The savings rate has already rebounded from a low of 3 percent in 1987 to around 5 percent today. Savings trend denied

A September NBC News/Wall Street Journal poll of registered American voters indicated that ``voters are less likely to say they are saving more than they were three months ago. ... Sixty-five percent plan to spend the same amount as last year or more on major purchases in the coming year.''

Barry Bosworth, a senior fellow at the Brookings Institution, says inflation is outpacing real wages. ``I don't think [the savings rate] will increase dramatically,'' he says. ``You're bound to hear from the average worker: `How do you expect me to save more? I'm barely making it.' '' People are carrying debt about equal to their annual income, Mr. Bosworth says. ``Two-thirds of that debt is in mortgages; the next largest portion is consumer debt.'' `Booming Economy in 1990s'

But Mr. Minor's survey of economists shows many predicting ``a booming US economy in the 1990s. . . . The most important driver of these boom predictions is an increase in the US savings rate as the baby-boom generation matures.'' He refers to a priority shift from spending to college and retirement savings.

``When consumers expect a recession, they try to reduce their indebtedness,'' says Audrey Freedman, an economist with the Conference Board. This frees up more capital for banks and investments, which in the long run leads to productivity, jobs, consumption, and the growth cycle.

She says declining housing values ``may stimulate savings because the homeowner realizes that appreciation of the home - his nest egg - is no longer reliable.''

But Bosworth says that ``savings absorbs all the shocks of unforeseen income changes.'' The combination of homeowners' property value being lower than expected and living costs being higher may actually deplete savings rather than produce a pool of ``rainy day'' money. In general, he says, there is little evidence that suggests most Americans are disposed toward saving; they'd rather spend. ``The only way to increase personal savings is to cut consumption, and that's painful.''

Savings is a function of interest rates and capital, says a senior economist with the US Treasury Department. If domestic savings (both private and public) are less than US investment and spending requirements, then foreign capital finances the deficit. The US must be competitive with worldwide rates to attract and sustain this investment, says the economist. Fed's role termed restricted

While the Federal Reserve Board indicated it would consider lowering interest rates after budget spending cuts and tax increases become a reality, many economists say the Fed is restricted now more than ever.

Lowered rates are attractive to US consumers but repel foreign investors, who will go elsewhere for higher yields on their money. The US Treasury relies on foreign capital to make federal payrolls and service its debt.

Germany and Japan, two countries with surpluses, now have more pressing domestic demands for capital, says the US Treasury official. And, at present, international rates enjoy a competitive advantage over the US. In the last six months, the dollar dropped 19 percent in value against the Japanese yen and 11 percent against the German mark. Japanese and German investors are now diverted to Europe, where rates are higher.

If there is a capital shortage because countries with surpluses are drained domestically, says the Treasury official, then there will be a natural reduction in investment and consumption in the US, he says, and the growth rate will be slower. There may be a slowdown in foreign investment in the US, he says, but he is not worried about a draw-down on American investments.

``Foreign capital will continue to be an important source for the US,'' says the official, `` because of our political stability and because we are the largest market in the world.''

This will be necessary, the Treasury source says, because even if private savings quadruples, it will be insufficient to support the growing deficit.