To get America Saving, Give Every Newborn an Account

Originally posted at the Huffington Post

President Obama has previously declared that the long-term health of the economy is dependent on moving from an era of “borrow and spend” to one where we “save and invest.” Since the mid-1990s, after decades of thrift and economic prosperity, Americans had a falling out with savings and began a new love affair with credit. As personal savings plummeted, the average amount of household debt almost tripled. And while the Great Recession has had many culprits, the dearth of savings and the preponderance of debt have certainly magnified its pernicious effects. The return of savings to the national economy is a process that won’t happen overnight. Many levers will have to be turned to transform America back into a nation of savers.

Well, here’s an idea to help with the transition and jumpstart the savings process. Let’s make sure every child has a savings account opened in their own name and it’s initially endowed with a $500 deposit. Better yet, let’s match the deposits made to accounts of children in families with lower incomes and fewer resources. This way they can learn the value of savings and have the potential to build up meaningful levels of accumulations that would help them plan for their futures.