Bring back thrift

Andrew Yarrow, USA Today, 12/25/2014

We live in a society in which too many who can save don't, and too many simply don't earn sufficient income to be able to save. Without savings, we are less able to take care of future needs, have less for the private and public investments necessary for a flourishing economy, are less able to provide the next generation with a down payment on a good life, and less able to help others in need. Almost universally, we have heard 1,000 voices telling us to buy – clothing, cars, housing, vacations, college – even if we can't afford it. Americans have roughly $1 trillion in both credit-card and college loan debt. Despite lackluster "financial education" programs, the call to save is drowned out by the call to spend.

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Subject: Thrift

More by: Andrew Yarrow

The lights glitter on Christmas trees in homes, town squares, and shopping malls throughout the nation. Hanukkah candles burned brightly until earlier this week. It has long been true that these religious holidays have morphed into occasions for a plethora of gifts, a dieter's nightmare, and a time of material plenty, as we are urged to consume and business even tells us that our economy depends on strong sales during the holiday "shopping season."

Yet, rich as America is, this is not a season of plenty for much of the population. About 51 million American households – 44% of them, or nearly 134 million Americans – are either in debt or have only enough money saved to pay for up to three months or less of modest expenses. The typical American household has $56,000 in assets, but that obscures the fact that 20 to 25% of American households have "negative net worth," while the country's 16,000 wealthiest families hold $6 trillion in assets.

Despite the aura of festivity, debt hangs like a dark cloud over too many Americans. Like Bob Cratchit in Charles Dickens' A Christmas Carol, the 134 million Americans who are "liquid asset poor" can neither afford a turkey on the dinner table nor gifts under the tree, at least without going deeper into debt. And that's what we as a country have done. While median assets have declined since the 2008 recession and are below those of 18 other countries, median household debt has nearly tripled during the last 20 years and Americans' median household debt has exceeded their income from 2004 to 2013.

We live in a society in which too many who can save don't, and too many simply don't earn sufficient income to be able to save. Without savings, we are less able to take care of future needs, have less for the private and public investments necessary for a flourishing economy, are less able to provide the next generation with a down payment on a good life, and less able to help others in need. Almost universally, we have heard 1,000 voices telling us to buy – clothing, cars, housing, vacations, college – even if we can't afford it. Americans have roughly $1 trillion in both credit-card and college loan debt. Despite lackluster "financial education" programs, the call to save is drowned out by the call to spend.

Ideas like "thrift" may be seen as a downer, an antiquated value that connotes the miserliness of a character like Scrooge. But that was not always the case. In early 20thcentury America, thrift – which meant much more than just saving money – was the rallying cry for many civic, professional, business, and other organizations and was enthusiastically embraced by millions.

The YMCA, teachers, the banking industry, government, temperance advocates, anti-poverty activists, every president from Teddy Roosevelt to Herbert Hoover, and many other strange bedfellows played central roles in promoting thrift. The movement presented its philosophy in books, pamphlets, cartoons, and silent films, and thrift was taught in schools and factories and promoted during an annual National Thrift Week that began each January 17 on Benjamin Franklin's birthday.

Thrift represented a quest for control over an array of roiling social problems. Profligacy and waste threatened lives, businesses, the environment and the country's strength; poverty was a daily threat to the well-being of millions; and consumer society threatened values of restraint and modesty. These threats galvanized Americans not only to save money but also to reduce wasteful consumption, the destruction of natural resources like America's forests, and even "wasted" time.

These threats are very much with us again, after a long period between World War II and about 1980 when incomes and savings rose at a healthy clip and we began to become conscious of the enormous amounts of waste we generated and the hazards they posed to the environment.

Although the early 20th century thrift movement waned in the 1930s, many of its ideas are more relevant than ever today. A broad-based idea predicated on wise resource use and savings can help us address many contemporary problems. In today's parlance, thrift means "asset building" through policies including government-seeded children's savings accounts , creating automatic IRAs, restricting predatory payday lending, expanding the Saver's tax credit, creating individual development accounts for low-income Americans, encouraging "save to win" lotteries introduced by credit unions in several states, and promoting "sustainability" through policies that encourage energy-efficient cars, homes, and offices, increase recycling and reuse, and limit wasteful and environmentally harmful practices ranging from overfishing to fossil-fuel use that contributes to global warming and sea-level rise.

By taking such steps, a modern-day Ghost of Christmas Future could show us a nation where there is plenty for all Americans, during the holidays and at all times.

This article originally appeared here.

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