The perpetual taxation of savers

The very low interest rate policy being conducted in the euro zone amounts to a perpetual tax on savers. It comes on top of low long-term returns on equity investments. This taxation of savers finances additional public spending but also the cost of household debt (even though housing investment has hardly increased) and corporate debt (corporate investment has picked up significantly since 2013). In the short term, this taxation of savers is positive , insofar as it boosts demand. But what are its effects in the long term? There is reason to fear: An excessive fall in the household savings rate (if substitution effects prevail) and therefore a fal l in investment and in potential growth); The impoverishment of (future) pensioners, as the return on their life savings will have been abnormally low.