IT is apparent that the expansion of the United States economy in recent years is in large part traceable to debt-financed expenditures on GNP. Individuals with current incomes in excess of their purchasing needs lend out the excess to other individuals whose current incomes are below their purchasing needs. The latter are making purchases at the expense of future incomes since these debts must eventually be paid. If these deficit purchases are suddenly to cease, the economy will be left with an enormous amount of excess producing capacity. It is the object of this paper to study certain implications of the process of debt repayment for the volume of saving. Repayments are defined as transfers to sinking funds and other similar reserves maintained for bonded debt retirement by enterprises and governments, and periodic payments to retire short-term loans and mortgages held by all units. (See Table i.) An important characteristic of repayments is that in large part they are compulsory payments which must be made by the borrower, like insurance premiums. Also there is a significant lag between the time the debt is contracted and the final repayment made on it. In the case of certain consumer loans the time span is brief, but for bonds and mortgages it may exceed twenty or thirty years. Another characteristic is that repayment flows enter into gross savings in the saving and investment account, in the same way as any other individual saving flow. In the business account, repayments are included in the item, undistributed profits; in the household account, they are routed through personal saving; in the government account, through surplus in the United States accounts and savings in the UN accounts; in the external account, through foreign investment. However, the flow of repavments in the national accounts is complex. Only repayments made directly or indirectly out of income flows (more precisely, charges against GNP) are included in the national accounts. Repayments which originate during the year in question in financial and existing asset transactions are excluded. Nor are the repayments included in the national accounts fully represented or measured in the saving totals. Savings in the household, government, and external accounts are netted magnitudes, i.e., positive saving less dissaving or disinvestments. (See earlier Consumer Finance Surveys of the Michigan-Federal Reserve Board and also the National Resources Planning Committee Study Family Expenditure Survey 1935/1I936 for the concept of positive and negative saving.) Despite this, changes in the flow of repayments are fully reflected in the netted savings flows either through changes in positive saving or through changes in dissaving.' This fact is sufficient for the hypotheses presented in this paper, despite the difficulties involved in trying to visualize the flow of repayments through netted savings. Statistics on repayments are difficult to obtain. Crude approximations intended to convey a notion of their order of magnitude are shown in Table I. Repayments on long-term debt (to be designated long-term repayments) amount to about one-fourth of gross savings in the I955 national accounts. Shortand long-term repayments are almost as large as gross savings.2 These figures suggest that the rise of consumer borrowing (a small part of personal consumption expenditures in economies less developed than the United States) in the United States economy today has made repayments a magnitude of consequence, deserving closer examination.3