In a nice post noting the importance of saving for economic progress, Foroohar highlights several points that bear repeating. Namely that low savings are correlated with low investment and growth and can inhibit risk-taking. This is because all investment, research and development and entrepreneurial activity are all funded by savings.
As Foroohar explains:
Consumer spending today may bolster the economy in the short term, but it can actually cut into growth over the long haul if it depletes funds available for investment in the economy. Individuals’ savings, deposited in banks or poured into asset markets, gets funneled back into the economy via loans and capital purchases that allow companies to grow and expand and hopefully to hire better skilled workers, ultimately increasing GDP growth.