Mailing Our Way to Savings

Our New America colleague Michael Lind suggests a novel way to revive America’s savings culture in today’s New York Times. He proposes that we bring back one of the old ways that people saved, which was through a postal savings bank.

Congress created such a system in 1910 and it thrived for decades as a place where small savers could store up their cash. The advent of FDIC insurance shored up the instability of the banking system and postal accounts fell out of favor and then out of commssion. But Lind argues that it is time we rekindle this flame. Small savers remain unpopular among most banks and millions of Americans do not own a basic transaction account, which means they have to pay more for everyday financial services.

Given the financial crisis, we know that we will need to realign our consumption habits to save more. We will need to do so for small and middle-sized savers alike. What we lack now is the infrastructure to support a savings revival. Perhaps the post office, still a ubiquitous presence in communities throughout the country, can be part of the solution.