Jun 18, 2008
We're wading in debt. We're swimming in debt. We're drowning in debt.

The U.S. used to pride itself on being a thrifty nation. Today, our savings rate is in the minus figures: we spend more than we make and we don't save at all. Millions of us are in bondage to our credit cards, maxed out and barely able to make the monthly interest payments. Consumer debt in April 2008 exceeded $2.5 trillion dollars, as reported by the Federal Reserve. (For comparison purposes, the month I was born consumer debt was under $6 billion.) How did we come to such a pass?

For a New Thrift: Confronting the Debt Culture, a publication of The Thrift Project, delves into that question and comes up with some answers. Sponsored by eight agencies led by the Institute for American Values, For a New Thrift focuses on institutions:

When a society creates democratic institutions to encourage thrift, more people are likely to engage in the positive activities of saving, conservation, and asset building. When a society fails to nurture such institutions, limits access to them, or supports institutions opposed [to] thrift, more people are likely to over-spend, fall into consumerism as a philosophy of life, and go into debt.

A combination of corporate-driven consumerism, lax government regulation that encourages the most predatory of lending practices, and active government participation in the further impoverishment of its poorest citizens through state-run lotteries, have combined to overwhelm the American people in a perfect storm of debt.

The report is well summarized in an article from The American Interest Online, entitled, "A Nation in Debt: How We Killed Thrift, Enthroned Loan Sharks and Undermined American Prosperity," by Barbara Dafoe Whitehead.
tags: Economics

Read Whitehead's Article