This was explained better by Michael Pettis in "The U.S. Trade Deficit Isn’t Caused by Low American Savings", https://carnegieendowment.org/chinafinancialmarket

This was explained better by Michael Pettis in "The U.S. Trade Deficit Isn’t Caused by Low American Savings", https://carnegieendowment.org/chinafinancialmarkets/77009 https://carnegieendowment.org/chinafinancialmarkets/77009 > [I]f savings are already plentiful and interest rates are low, to the extent that all desired investment has been funded, U.S. investment wouldn't rise. If the gap between U.S. investment and U.S. savings is unchanged (and investment doesn't rise), then savings cannot rise. This means that policies designed to raise U.S. savings by $20 can only cause savings in one part of the economy to rise by $20 while simultaneously causing savings in another part to decline by exactly the same amount. The more abstract point is that but for government borrowing (both Federal, state, and municipal) soaking up the glut of cash and redistributing it, unemployment would progressively increase. Pettis' policy argument is that, given this situation (current account deficit driven by foreign dollar holders), government spending should focus on inducing consumption rather than investment as the supply-side of the equation is manifestly maxed out.