Editorial: Saving is back in vogue

But it shouldn't come at the cost of education.

Last update: October 20, 2009 - 2:44 PM

An old American value -- thrift -- is back, and may be here to stay for a long while. That was the prediction voiced last week by Chris Farrell, MPR economics editor and the keynoter at an annual conference for state and local policy analysts, sponsored by the University of Minnesota.

"What we learned during this Great Recession is how vulnerable we all are," Farrell said. That's why the nation's household savings rate has jumped from less than 1 percent two years ago to about 6 percent today, and is expected to climb. "We're too scared to return to spending" at levels seen before the recession, he said.

Savings rates in that range mean a return to the financial habits American families exhibited in the 1950s and 1960s. Some political forecasters say that much thrift will coincide with heightened resistance to paying taxes. But in Minnesota, the middle of the 20th century is also associated with a surge in education spending that included the consolidation of rural schools, the rise of the state university and community college systems, and a state school financing system that enriched curricula and raised standards throughout the state.

For Minnesota to remain a state that relies on brainpower for its prosperity, investments in education must stay strong, and money devoted to education must be spent wisely. The challenge for the state's political and educational leaders will be to sell thrifty people on the notion that when they pay taxes for education, they are investing in their own futures, with a return at least as reliable as money in the bank.

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