Want to Create a Nation of Savers? Start at Birth

This opinion piece was published on AolNews.com on Friday, July 23, 2010.

Without much fanfare, savings disappeared from the national economy, replaced by rising levels of debt used to finance ever-expanding consumption.

It’s an unsustainable path, and one that contributed to the Great Recession we are still struggling to overcome. And while turning us into a nation of savers isn’t going to happen overnight, we have to start somewhere.

And a good place to start is where savings habits are formed — with our children.

Of course, in the short run, policymakers need to focus on increasing spending to boost consumer demand, spark investment and job creation, and provide relief to families dealing with sudden wealth loss and income declines.

But beyond this stimulus, securing our economic future will depend on returning savings to the national economy.

For many families, it is savings that provides the security blanket and seeds investments that can pay off down the line. At the macro level, savings becomes a source of investment that will ultimately power the economy.

Right now, we are importing large amounts of capital from abroad, but in the long run we’d be better off generating these resources internally.

That’s why it makes sense to rebuild the foundation of our economy to one based on savings and investing rather than borrowing and spending.

Click here to read the whole piece.