Overview
The current economic downturn, triggered in part by excessive household debt and
deflating housing prices, underscores the central role asset ownership plays in
the economic security of California
families and the broader economy. Yet,
half of all Americans currently have few or no assets, in part due to policies
that encourage savings and wealth accumulation that benefit the upper half of
earners. The purpose of New America’s
Asset Building Program, is to significantly broaden savings and assets
ownership in America,
thereby providing all Americans with both the means to get ahead and a direct
stake in the overall success of our economy.
Why Promote Asset Building
Policies in California?
Broad asset ownership has the
potential to connect opportunity with economic security. While the
need to broaden asset ownership is great, the promise is even greater. Those
with assets not only have brighter economic prospects, they are more productive
citizens. Research finds that when families-including very poor families-own assets
(as distinct from income), they are more likely to work harder, enjoy better
physical and mental health, make educational plans for their children, feel
more confident about and in control of their future, and be involved in their community
and in political affairs.
What is the “Asset Gap”
in California?
The need to spur widespread asset
ownership in California
is immense. Over 30 percent of California households would
only last three months out of poverty if they were forced to deplete all of
their assets. That is more than twice California’s
“official” poverty rate of 12 percent – and possibly more consequential. When families don’t have enough assets, they
may be one medical emergency or layoff away from government dependence. Nor can they send their kids to college, start
a business, reduce or manage their debt, build up savings, or secure a nest-egg
for retirement.
How Can Asset-Building Policies Help
All Californians?
Asset-building policies provide a rare
political opportunity for bipartisan cooperation to address stubborn poverty
issues with initiatives that emphasize personal responsibility. Asset-building
includes a range of simple proposals that can have broad, deep and immediate
impact with little cost; and others that, with a modest investment, would
radically transform the long-term economic outlook for California’s children from one of
uncertainty to sustained prosperity.
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