Whatever Happened to Thrift?

Whatever Happened to Thrift?: Why Americans Don't Save and What to Do about It

Ronald T. Wilcox
Copyright Date: 2008
Published by: Yale University Press
Pages: 176
https://www.jstor.org/stable/j.ctt1npv4w
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  • Book Info
    Whatever Happened to Thrift?
    Book Description:

    It is no secret that Americans save very little: every economic index confirms as much. But to solve the real mystery, we must ask the questions, "Why?" "What are the effects on our economy?" and "What can be done about it?"

    In this thoroughly researched and thought-provoking book, Ronald T. Wilcox clearly describes not only how the "savings crisis" adversely influences personal lifestyles over the long term but also how it can undermine our national wealth and standard of living. Wilcox cogently explains that savings are essential to fuel our nation's economic growth, whether it's putting money in the bank or in the form of direct loans to the government as savings bonds, for example. And, he presents unambiguous facts showing that a high proportion of current wage earners simply will not have enough money for self-support during retirement-and that the government safety nets for income and health can no longer be counted on. Most important, Wilcox examines the many rational and irrational reasons behind individuals' failures to put money away, what third parties such as corporations and government can do to help, and the steps people can take today to help themselves.

    The book is an attempt to reinvent thrift in the United States, to find practical ways to help people consume less and save more now so that we can be a richer people in the future and a more prosperous nation. It is a must-read for every corporate executive, policy maker, and concerned citizen.

    eISBN: 978-0-300-14532-8
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. ACKNOWLEDGMENTS
    (pp. ix-xii)
  4. 1 DO AMERICANS SAVE TOO LITTLE?
    (pp. 1-16)

    This is the story of the average American who has lived well over the past 40 years but now more than ever before lives on borrowed time and money. Americans are the world’s prodigal sons, spending all their riches today and guaranteeing themselves a place in the poorhouse of tomorrow. The decline in household savings in the United States is well chronicled in both government statistics and the popular press. In early 2006, commonly cited measures of savings had sunk to levels not seen since the Great Depression, ranking it right at the bottom of the developed world.¹

    So what?...

  5. 2 WHY AMERICANS DON’T SAVE ENOUGH
    (pp. 17-45)

    We are now reasonably sure that, on average, Americans save too little, and this is particularly the case among the less prosperous. And we know that Americans themselves are worried about it. These facts together offer a riddle of sorts: If we know there is a problem, why do we still save too little money to provide for our future needs? Describing behavior is easier than probing its causes. But probing is exactly what we do here, not only because it is useful for an in-depth understanding of the issue itself but because it will help us when we begin...

  6. 3 THE PSYCHOLOGY OF MONEY
    (pp. 46-69)

    People handle their money in strange ways. Some people make poor financial decisions regularly, and it is clear that those poor decisions can have major negative economic consequences for them. If someone is constantly running up credit card debt, borrowing against home equity to finance vacations, and not contributing to a 401(k) plan, we can say with a fair degree of confidence that this person is not strong in the area of household financial management. Many of us feel a bit smug and self-congratulatory when we think about people like this. After all, we do not fall into those traps....

  7. 4 PUBLIC POLICIES THAT WILL INCREASE SAVINGS
    (pp. 70-104)

    Much can be done to increase household savings in the United States. The capacity for practical ideas to address this problem resides in many corners of the federal government, academia, and private enterprise. Some ideas are grand, such as changing the entire federal tax structure. Some are more mundane, like changing the default asset allocations of pension plans. But ameliorating this endemic social problem will require a series of steps that are large and small—not just one bold gesture.

    It would be nice to believe that to solve this problem we only need to educate people about the importance...

  8. 5 A CEO’S GUIDE TO INCREASING EMPLOYEE SAVINGS
    (pp. 105-124)

    Well-formed public policy is a potent tool for increasing savings. But the front line in the battle to increase household savings is the workplace, where people make many of the decisions that will affect their savings and long-term economic prospects. Private enterprise can also make substantial inroads here. A small business owner or senior executive in a large corporation can take some simple steps to increase the savings of his or her employees. If those steps become known as best practices, the effects could ripple throughout the U.S. economy.

    In this chapter, I follow three overriding principles in dispensing some...

  9. 6 A HOUSEHOLD GUIDE TO SAVING
    (pp. 125-136)

    This isnota chapter about investment strategies. If you would like to know about investment strategies, there are limitless books on the subject that range from the thoughtful to the ridiculous. Instead, in this final chapter, we ignore the public policy makers and CEOs and talk about your personal saving habits—what the psychologists and economists say you are likely doing wrong and right. I won’t tell you that you should save more money or use credit cards wisely. I assume that if you have gotten this far, you are already thinking seriously about these issues and don’t need...

  10. NOTES
    (pp. 137-146)
  11. BIBLIOGRAPHY
    (pp. 147-154)
  12. INDEX
    (pp. 155-159)