Americans struggle mightily with spending more than we earn and not saving for a rainy day. Peter Tufano of Harvard Business School discovered in a recent survey that more than half of Americans could not raise $2,000 within 30 days, from all available resources, including family and friends.

Consider the gloomy statistics about preparedness for retirement. Our individually funded defined-contribution plans will only deliver a familiar standard of living if each of us saves roughly 15 percent of our salary from when we start working in our 20s until when we hope to retire in our 60s. This requires discipline.

As it stands, 40 percent of us will never save for retirement, and the average amount saved in a retirement fund is $35,000. Twenty percent have no savings at all. And 46 percent of Americans die with virtually no financial assets.

Shall we look for other people to blame for this? There is a public side to debt, of course. Our national debt is registered not in billions but in trillions. If we can hardly tread water now, how will our children make those interest payments? Passions are high.

But the government's finances are not like a family's finances; it is rather more like the finances of a family business. Businesses live and die by borrowing. Sole proprietors hear all the time that there is all sorts of capital seeking to be invested in enterprises just like theirs. Yet the family business that has operated for years with a line of credit can't get the loan to stay open or expand in uncertain days and months. What is going on? What makes it work?

It's the financial sector. That's where the stories of public and private debt come together. Louis Hyman has written an entertaining history of consumer debt titled "Borrow: The American Way of Debt." He insists we see borrowers and creditors through the same lens. His great insight is to note that the birth and growth of consumer credit has correlated with the shifting of capital investment away from asset creation to the creation of securitized financial instruments.

As the American Dream of home ownership recedes on the horizon, he lets us in on a secret: "Without a good alternative, capital continues to be invested in consumer debt. It is more important to ask why there was so much money to invest in mortgage-backed securities than to ask about the particulars of how those investments went awry. Don't ask just why Americans borrowed; ask why our financial institutions lent!"

Thrift was summed up by Benjamin Franklin as "industry, frugality, and generosity." Thrift is not just about "saving" or "bargain-hunting." Thrift is a big idea. Stated as a theorem, thrift is "the ethic of wise use." Ever since "Poor Richard's Almanac" laid a claim on the American character, we have learned that "the way to wealth" is some combination of being productive, shunning waste and extravagance, saving and learning to build capacity, and being a steward who is future-minded about the better legacy we are meant to leave to our fellow citizens.

In 2008, when all eyes were on the bailout of our financial institutions and on the emerging outlines of the public and personal debt crisis that would be christened the Great Recession, the Institute for American Values published a report to the nation titled "For a New Thrift: Confronting the Debt Culture." David Brooks of the New York Times said: "This may be damning with faint praise, but it's one of the most important think-tank reports you'll read this year." The proposals in the report are even more important today.

Start a public educational campaign, create national savings plans, build new thrift institutions, repurpose the lottery and incentivize thrifty behavior in every area of our lives. It is a call to personal responsibility, and a reminder of the crucial role that sound institutions guided by creative public policy play.

We don't spend a lot of time in the report moralizing about this debt culture. Rather, we lift up those who have solved the problems of creating social mobility and access to markets. We highlight the history of credit unions, the promise of community-development financial institutions, models of reform that have both succeeded and failed. We challenge our leaders to provide alternatives to the contemporary payday lending (usury) industry; we challenge ourselves to teach and enable people to build real wealth.

Pick up the report and read it. The most important phrase you will never learn if you don't is this: "anti-thrift institution." We may drive by a payday lender or a rent-a-center every day and not think about it this way: "Anti-thrift institutions do more than simply hand out expensive credit. They also establish social norms and promote cultural values ... to lower psychological and social inhibitions against over-borrowing and over-indebtedness."

Take the largest, most potentially corrupting, antithrift institution of them all: government sponsorship of gambling. One can hardly think of a more regressive, predatory practice than the state lottery -- unless you bring in slot machines. "For a New Thrift" puts the contrast starkly: "With pro-thrift institutional incentives, many low- and moderate-income Americans might be able to join the class of savers and investors. Instead, the lottery has managed to recruit them into a class of habitual bettors." We might just as well run the numbers: a class of habitual losers.

Even as state-sponsored gambling seems accepted by all, something cries out to be done. Take a look at groundbreaking research on a savings vehicle called Prize Linked Savings. It turns out that credit unions, notably in Michigan but also elsewhere, have developed a "Save to Win" account that repurposes the lottery. The pooled resources of this classic savings account goes to awarding monthly and annual prizes. And it works. More people open accounts and more people save.

However, it is illegal in most places because of the government's monopoly on gambling.

Get the government out of gambling. Do more than stay out of debt: celebrate thrift.

Debt is not our only problem. It is merely the consequence of not knowing how to distinguish wants from needs and thereby resist slavery. The real solution, after we have paid down our debt, is to reform ourselves and our institutions so that we make it as easy as possible to remain free.


Andrew Kline is the director of the John Templeton Center for Thrift and Generosity at the Institute for American Values. He wrote a longer version of this article for the Free Lance-Star of Fredericksburg, Va.