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Debt: Present and Future, Private and Public, by Andrew Kline

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Date published: 1/20/2013


Take the largest, most potentially corrupting, anti-thrift institution of them all: government sponsorship of gambling. One can hardly think of a more regressive, predatory practice than the state lottery--unless you bring in slot machines. Every day, the lottery taxes the poor by selling them a lie that their best (and only bet) is to get rich quick. "For a New Thrift" puts the contrast starkly: "With pro-thrift institutional incentives, many low- and moderate-income Americans might be able to join the class of savers and investors. Instead, the lottery has managed to recruit them into a class of habitual bettors." We might just as well run the numbers: a class of habitual losers.


Even as state-sponsored gambling seems accepted by all, something cries out to be done. Take a look at groundbreaking research on a savings vehicle called Prize Linked Savings. It turns out that credit unions, notably in Michigan but also elsewhere, have developed a "Save to Win" account that repurposes the lottery. The pooled resources of this classic savings account goes to awarding monthly and annual prizes. And it works. More people open accounts and more people save. However, it is illegal in most places because of the government's monopoly on gambling.

Get the government out of gambling. Do more than stay out of debt: celebrate thrift.

Debt is not our only problem. It is merely the consequence of not knowing how to distinguish wants from needs and thereby resist slavery. The real solution, after we have paid down our debt, is to reform ourselves and our institutions so that we make it as easy as possible to remain free.

One last suggestion: "Bring Back Thrift Week," which was celebrated nationally from 1916 to 1966 on Benjamin Franklin's birthday. From Jan. 17 to 23--this week in fact--we can share ideas about how we can encourage the small saver and revive the middle class. Drive through your neighborhood and take note of those anti-thrift institutions, resist your spendthrift ways and reflect on our national priorities, and find out what thrift institutions make your community stronger. We can discover together what will make us more productive in our work, creatively frugal in the stewardship of resources, and progressively generous as future minded citizens.

Do your part, and we will all be in your debt.

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