The Case For A Grass-Roots National Savings Initiative

We can restore power to the people by saving our money, together.

A few days ago, someone posted this on Twitter:

I posted this comment in response on Twitter:

For the last few days, there has been a furious response to my post. My comment was sorely misunderstood. Many people assumed that I didn’t want the stimulus checks or enhanced unemployment insurance to be doled out. Not true. We’re in a real economic crisis. Those people who can’t save money really needed those checks. Many people assumed that I was shaming the poor. I was not. I was shaming every politician who engineered an economy designed to inhibit self-sufficiency for most everyone except the already rich and powerful.

So many people assumed that my original post on Twitter was to the exclusion of enhanced unemployment and stimulus checks. My apologies for my poor choice of words. What I really wanted to say could not fit into a 240-word tweet. So I’m putting a better message together here, in this article.

What I really mean to say, was that I would have preferred to see an economy built to support everyone so that when there is a calamity, and this pandemic is a calamity, that everyone has the means to take care of themselves. Instead, we have Republicans who want people to be dependent on employers who fund their campaigns and Democrats who want us to be dependent on the government for the votes. Either way, we’re dependent on the whims of the two dominant political parties.

I’ve listened to the GOP. I used to be a registered Republican. I’ve heard them talk up self-sufficiency, but have never really seen them walk the walk. The GOP seems to think that self-sufficiency is only for millionaires and billionaires and the rest of us, the great unwashed, can go to hell. There are elite Democrats that act this way, too. Both parties have engaged in a great fraud about self-sufficiency, and the pandemic has cast a harsh light on them.

The pandemic has shown us that both parties see the healthcare industry as a private profit center rather than a public good. It took a pandemic to make that kind of thinking apparent. Even in this pandemic, President Trump chose to go it alone instead of working with other countries to develop vaccines. He gave away billions for development and then let big pharma secure patents on the vaccines. If he was serious about free markets, he would have open-sourced vaccine development so that we could all share the work and the fruits of the work. Open source vaccine research will yield faster results that we can use. See, even Trump likes to drive income upwards.

The pandemic has proven that self-sufficiency is a myth in America. Most Americans are dependent on someone else. If we’re not dependent on an employer, then we’re dependent on the government. There are no truly self-sufficient people in America. Even the billionaires are dependent on the government for the protection of their wealth. You can’t have a giant corporation and the monopoly that goes with it, without a giant government to recognize it and respect it.

Presently, we have an economy especially suited to support millionaires and billionaires. They fund most of the SuperPACs in our elections, so they get to decide which candidates do well in primary and general elections. The wealthy run something that Harvard professor and one-time presidential candidate Larry Lessig called, “the money primary”. Before we see a candidate's name on any ballot, that candidate has been vetted by the wealthy. This is just a part of how public policy is set to give us the economy we have now, one that is not resilient enough to withstand a pandemic.

The median income in America was $19.33 according to a recent article at the Economic Policy Institute in 2019. That means half of Americans are making less than $19.33 an hour. Half are making more. In most cities, even 19 bucks an hour is not enough for true self-sufficiency. Economist Dean Baker estimates that if wages had kept pace with inflation and productivity since 1968, the minimum wage would now be $24 an hour. That means that everyone else above that would have a much higher wage. A minimum wage set at $7.25 an hour can support a lot of millionaires and billionaires. How cool is that?

It should become clear by now that public policy is driven by citizen engagement. A large contingent of people lives in dual-income homes. A large contingent of people is working multiple jobs just to keep up. I’ve seen homes with 5 or 6 cars in the driveway and on the curb. There is so much pressure to keep us working that many people don’t have time to help their kids with homework. We work more hours at our jobs than most other OECD nations. We’re #10 on this list, and not a single Scandinavian country is above us. We work so much, that we really don’t have time to be at City Hall or to correspond with the statehouse or the Congress. Most of us will never even get a chance to meet with our representatives in Congress or the statehouse. That is by design. Wealthy people have that kind of time and they have the money to pay for access. They have passive income to depend on, and they’re paid far more per hour than most people can dream.

America is a billionaire economy. The US is #1 in the world with 614 billionaires. That is a huge chunk of the economy. To put this in perspective, to “earn” $1 billion, someone working at $19.33 an hour must work 25,866 years. Even at $24 an hour, we’re still talking thousands of years to catch up. I doubt that anyone is 25,000 times smarter or more efficient than a worker bee at the front lines.

I think it’s time for a political movement that puts saving money upfront and center. I would love to see a political party make savings a plank in their platform. Both parties shame us and blame us for our medical bills, our need for help in times of crisis, and for not “getting it”, about how to become a millionaire. The message I get from Democrats and Republicans is that if we could just be more like the wealthy, we’d be OK.

The pandemic has shown us that the government can’t take care of us, though they may be able to help. The pandemic has shown us that there are some very callous conservative politicians in Congress who look at what happened in the pandemic and they say to us, “Tough shit.”

Therefore, it should be a national goal for everyone living in America to save one year of expenses. I’m not talking about enacting a law to require people to save money, though we could pass laws to support this initiative. I’m talking about pressing conservatives about their apparent desire for self-sufficiency. When conservative politicians talk about self-sufficiency, do they mean just for them, their families, and their buds, or for everyone? A national savings initiative would force conservatives to come out of the rot and be honest about self-sufficiency. They would have to admit that self-sufficiency is desirable for everyone, not just their well-heeled backers.

I remember the Marlboro Man. I remember the talk of the rugged individual. I remember how every conservative in Congress voted not to raise the minimum wage, to cut social security, to hamstring Medicare and Medicaid. Conservatives talk a good game about self-sufficiency, but they don’t deliver on it.

Look at the savings rates around the world. In the United States, the historical average savings rate is about 7–8%. Presently it’s around 17%. In China, a communist country, the savings rate is about 44%, and has been much higher than ours for years. In Finland, a socialist country, the savings rate is 27%. In Norway, their savings rate historically averaged around 4%, now it’s at 20%. Other countries may structure their economies differently, yet they still have billionaires, and they save more of their income than we do, even with higher taxes.

In my original post on Twitter above, I meant to say that we should consider as a goal, that every adult should have a year of expenses saved up. I don’t think this is unreasonable. In the aftermath of my post, one person on Twitter told me that she had seven years saved up at one point. Then there is Mr. Money Mustache. He has 1 million followers on Twitter. He saved up and invested enough money to retire by the age of 30 and on his 30th birthday, he retired. Instead of working for someone else, he works for himself, running his own businesses. He said he saved 60% of his income over ten years and found a way to a new life.

What I’m talking about here is not just saving one year of expenses. I’m talking about building an economy and a culture that actively encourages everyone to save a year of expenses. I’m talking about creating a non-partisan, apolitical culture of mutual support and aid that encourages saving money and frugal living.

Many people replied to my post on Twitter in anger and rage to explain to me that most people don’t make enough money to save anything. If conservatives in both parties really mean what they say about self-sufficiency, then they should make every tool available to us all to make a year of expenses saved a reality. That includes unrigging the economy so that the wealth derived from productivity growth due to technological innovation is not disproportionately squirreled away at the top. Politicians who are serious about self-sufficiency must help the nation to build a culture that supports self-sufficiency at every economic level.

We can start with our kids and our schools. Financial independence can be baked into our curriculums so that kids are introduced to money concepts in grade school and then when they graduate from college, their mindset includes managing expenses, avoiding debt, and setting a long term goal for savings.

We can encourage savings in our culture by giving air time to stories of people struggling to save, getting the help they need and meeting their goals. We can start savings unions, a system of mutual support and education with the singular goal of fostering savings at any level, on any scale, but with the ultimate goal of enabling everyone to save a year of expenses.

Now imagine what our country would look like with every adult set up with one year of expenses. If a pandemic comes, we are ready. We can isolate to quell the pandemic. We can shop for our goods online. For those who want to continue to work, they can do so at their own discretion. For everyone else, they can stay at home knowing that they have savings they can live on.

Consider now the impact on the welfare state. If everyone is set with one year of savings, we don’t have to go begging to Congress whenever there is a service interruption in our economy. We don’t have to wait for Congress to finish their filibuster to get the help we need because we already have it.

Now consider what happens to the employment market. A candidate for a job with an employer can demand a higher salary or wait for a better offer. A nation of savers will be able to choose the work that is best for them, rather than having the circumstances dictate their employment choices. Workers in a savers nation can take time out to top up their skills. They can afford to pay for some of the training they need.

And if employers try to play hardball, a nation of savers can stage a national strike. A nation of savers will be in a better position to negotiate, to organize, to unionize, to protest for a better way of life. That is what self-sufficiency looks like to me.

I want you to know that in my original comment, I was not shaming the poor. I was nudging us to a new way of thinking about money. Why should we be so dependent on employers or the government for money when, if we put our heads together, we can become a savers nation?

Write on.

Written by

Husband, father, worker, philosopher, and observer. Plumbing the depths of consciousness to find the spring of happiness. Write on.

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