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America's money tree page 4
Debt: Present and Future, Private and Public, by Andrew Kline

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Date published: 1/20/2013


In 2008, when all eyes were on the bailout of our financial institutions and on the emerging outlines of the public and personal debt crisis that would be christened the Great Recession, the Institute for American Values published a report to the nation titled "For a New Thrift: Confronting the Debt Culture." No less than David Brooks of the New York Times said: "This may be damning with faint praise, but it's one of the most important think-tank reports you'll read this year." The analysis and proposals etched in the report are even more important today.


Start a public educational campaign, create national savings plans, build new thrift institutions, repurpose the lottery, and incentivize thrifty behavior in every area of our lives. It is a call to personal responsibility, and a reminder of the crucial role that sound institutions guided by creative public policy play.

We don't spend a lot of time moralizing about this debt culture. We take note of the free riders, the undisciplined, and the predatory alike. Complaining about personal and corporate rent-seeking is too easy anyway. Rather, we lift up those who have solved past the problems of creating social mobility and access to markets. We highlight the history of credit unions, the promise of community development financial institutions, models of reform that have both succeeded and failed. We challenge our leaders to provide alternatives to the contemporary payday lending (usury) industry; we challenge ourselves to teach people to build real wealth.

Pick up the report and read it. The most important phrase you will never learn if you don't is this: "anti-thrift institution." We may drive by a payday lender or a rent-a-center every day and not think about it this way: "Anti-thrift institutions do more than simply hand out expensive credit. They also establish social norms and promote cultural values. For today's anti-thrifts, the effort to influence values takes the form of highly organized and self-conscious marketing and lobbying campaigns. These efforts are necessary to lower psychological and social inhibitions against over-borrowing and over-indebtedness."

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Andrew Kline is the director of the John Templeton Center for Thrift and Generosity at the Institute for American Values.