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Book Review Whatever Happened to Thrift?: Why Americans Don’t Save and What to Do About It Rebecca J. Travnichek Author: Ronald T. Wilcox Publisher: Yale University Press ISBN 978-0-300-12451-4 Whatever Happened to Thrift?: Why Americans Don’t Save that period” (p. 5). Additional measures of savings and What to Do About It is designed to illuminate the lack explained, compared, and contrasted include the U.S. of savings by individuals and families in the United States. Department of Commerce’s National Income and Product Identified as a national crisis by the author, he states that Accounts (NIPA) and the Board of Governors of the Fed- “Americans are the world’s prodigal sons, spending all eral Reserve’s Flow of Funds (FOF). their riches today and guaranteeing themselves a place in the poorhouse of tomorrow” (p. 1). He asks readers to Chapter 2, “Why Americans Don’t Save Enough?,” attempts consider the following questions: does the United States to help the reader understand why Americans save so little. save too little, why don’t we save, how can public policy It is divided into specific reasons why the savings record increase savings, how can employers increase employee is low in the United States. The first two reasons deal with savings, and what can households do to save? overconsumption: they are easy access to consumer credit and employees who are overworked by greedy corporations. Until very recently, research reports and media outlets These two reasons have low merit in the author’s eyes and cited measures of the U.S. savings rate sinking to almost are what he terms shallow “cocktail theories.” an all-time low, about the same as during the Great De- pression. In Chapter 1, “Do Americans Save Too Little?,” Not only ‘keeping up with the Joneses,’ but surpassing the the author uses research results from economics, finance, Joneses is the third reason. Education and income levels marketing, and psychology as a spring board to discuss the seem to be the pervasive thoughts regarding peer-pressure problem of household savings; indicating that “this book into overconsumption, leading to what the author calls a is an unapologetic attempt to reinvent thrift in the United “consumption superdisparity.” States, to find practical ways to help people consume less and save more” (p. 2). Rather than smart spending tips, the American optimism, reason four for the low U.S. savings author suggests looking for meaningful solutions. There is rate, has sometimes been our downfall. Feeling and no “one size fits all” solution. Without households choos- believing we have control over the random events in our ing to save, businesses will not be able to borrow money to lives may only be an illusion. Optimism has provided great assist in developing the next medical cure, improve tech- things, including the founding of our nation, but it has also nology, or a host of other things. led to thoughts of “we do not need to save money today, because tomorrow we will enjoy a great deal of success.” The author dissects how household savings is measured. It is “simply the difference between what a household earns The fifth reason that Americans do not save is that baby over a given period of time and what it consumes during boomers will be a very large elderly voting contingent Rebecca J. Travnichek, Ph.D., AFC, Family Financial Education Specialist, University of Missouri Extension, PO Box 32, Savannah, MO 64485-0032, email@example.com, (816) 324-3147 82 © 2009 Association for Financial Counseling and Planning Education®. All rights of reproduction in any form reserved. who, if they have not saved adequately for retirement, decisions on what is familiar or known then to make ad- will pressure legislators “to vote for measures that transfer justments and changes; individuals hate to appear stupid, wealth from the people who have saved responsibly
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