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Thrift and Thriving in AmericaCapitalism and Moral Order from the Puritans to the Present$
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Joshua Yates and James Davison Hunter

Print publication date: 2011

Print ISBN-13: 9780199769063

Published to Oxford Scholarship Online: May 2012

DOI: 10.1093/acprof:oso/9780199769063.001.0001

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Why Do Americans Save So Little and Does It Matter?

Why Do Americans Save So Little and Does It Matter?

(p.417) 17 Why Do Americans Save So Little and Does It Matter?
Thrift and Thriving in America

Robert H. Frank

Oxford University Press

This chapter shows that the aggregate personal savings rate is for the first time since the Great Depression below zero and that the average American family currently carries almost $9,000 in unpaid credit card balances. Although it is difficult to second-guess the claim that Americans save too little, the problem is only partially one of individual self-control. The more difficult issue comes as a collective action problem. It is argued that for many middle-class Americans, saving and spending decisions are greatly influenced by a larger social context where competing moral goods clash. Should a middle-income family, for example, move to a neighborhood that is in a good school district but that costs more than they can responsibly afford, or should they stay in a neighborhood that they can afford, but with much poorer schools? The choice between financial responsibility and security, on the one hand, and the well-being of one's children, on the other, represents a genuine dilemma for many Americans, a dilemma that can only be resolved collectively.

Keywords:   personal savings, collective action, middle class Americans, spending, moral goods

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