By Andrew L. Yarrow, author of Thrift: A History of an American Cultural Movement
As the new, 114th Congress arrives in Washington, is there any hope for greater bipartisanship and accomplishment than the recent, toxic, do-nothing Congresses? While most would grimly conclude that the United States faces another two years of bitter, partisan gridlock, what could spur Congress to improve on its performance during the last session, when fewer pieces of substantive legislation were passed than at any time in history.
It’s not that there aren’t issues on which broad majorities of the American people agree and want their lawmakers to take action: debt reduction, tax reform, immigration reform, gun control, investing more in scientific research and infrastructure, making higher education more affordable, a clean environment, and improving the fortunes of the middle-class and lower-income Americans.
However, rather than frame these issues in the same old ways—inviting the same old partisan rancor that has earned Congress its well-deserved single-digit approval ratings—there are ways to frame issues differently that could appeal to those on the left, right, and center. One such approach is to turn to older, broadly accepted American values and give them new meaning for the 21st century.
One such value is thrift. Thrift may seem like a dowdy, outdated idea connoting miserly penny-pinching in a society that relentlessly calls for us to spend. Although Benjamin Franklin and other Founders preached thrift, in a little-known chapter of American history, millions of Americans embraced an active thrift movement in the 1910s and 1920s, and many of their ideas remain strikingly relevant.
Today, about 140 million Americans—44 percent of the nation’s people—are either in debt or have only enough money saved to pay for up to three months of modest expenses, 31 percent of adults say they have no savings or pensions to afford to retire, and this lack of national savings limits the available capital for business investment to grow our economy.
During the early 20th century, civic, business, labor, religious, and political leaders of both parties came together under the banner of “thrift” to confront such disparate problems as Americans’ lack of savings, debt, and resulting economic insecurity; the destruction and waste of natural resources; the crassness of an emerging consumer society; the need for greater generosity; and business inefficiencies.
Issues not too different from today’s.
Aspects of thrift may be uncomfortable for some on both the left and the right, but it also can be a uniting, “common sense” philosophy, as Teddy Roosevelt said. Thrift combines strong individualism and a belief in personal responsibility with an equally strong belief in looking out for the community’s welfare.
As in the 1920s, thrift embraces the trinity of industry, frugality, and stewardship: Work diligently and productively; use financial, material, and natural resources with care for the future; and recognize that what we have is not ours alone, but for us to hold in trust for future generations.
Framed in these terms, there is something that most Republicans and Democrats could agree upon. Of course, broad philosophical agreement may be one thing, but a cynic might say: How can these ideas be translated into bipartisan initiatives that actually can be passed as legislation?
There are many ideas to increase individual savings and economic security that enjoy across-the-aisle support.
One proposal, for an automatic IRA, would serve small-business employees, who would contribute to private mutual funds contracted by the government, with the government subsidizing the plans’ administrative costs. This would benefit 80 million workers who don’t have workplace-based pension plans.
Individual development accounts (IDAs) have been proposed to help build adults’ savings through financial education and matching funds provided by government. These would be geared to low-income adults, and participants would receive up to a three-to-one match if they saved for an approved purpose such as a down payment on a house, paying college tuition, or starting a business. A pilot program run by the nonprofit Corporation for Enterprise Development helped spur the creation of some 20,000 such local initiatives.
A third bipartisan proposal is to expand the government’s Saver Credit, which provides a tax credit for moderate-income Americans’ contributions to an IRA or 401(k). Another idea is to create children’s savings accounts (CSA), which would be seeded by an initial $500 investment by government for each baby born into low- and middle-income families, with additional amounts added later during childhood. San Francisco has piloted a Kindergarten to College CSA, Cuyahoga County, Ohio, approved a similar plan in 2013, and bipartisan federal legislation, the American Dream Accounts Act, has been introduced by Senators Chris Coons (D-Del.) and Marco Rubio (R-Fla.)
Increasing saving benefits all Americans and makes our country stronger. Democrats and Republicans both know this and if they want “new” language to forge agreement, why not turn to that tried-and-true American value, thrift?
Andrew L. Yarrow, senior research advisor at Oxfam America, a historian who specializes in 20th-century America, former New York Times reporter, and author of Forgive Us Our Debts: The Intergenerational Dangers of Fiscal Irresponsibility, has just published a new book, Thrift: The History of an American Cultural Movement through UMass Press. For more information, click here. To read more op-eds by Andrew Yarrow, check out his Twitter feed at @ALYarrow.