Confronting the Debt Culture

Tom Shipka

Next week at the Washington, D.C. Marriott, a national conference will be held with the theme "Confronting the Debt Culture." It is co-sponsored by five organizations, including the Institute for American Values and the New America Foundation. (1) The conference will attract consumers and consumer advocates, scholars, elected and appointed government officials, philanthropists, and representatives from foundations, banks and credit unions, among others. The highlight of the conference will be the release of a report entitled For a New Thrift: Confronting the Debt Culture which the co-sponsors have been researching and writing for many months.
What prompts this conference? The conference co-sponsors are convinced that we Americans are living beyond our means and accumulating debt at a staggering, unprecedented rate, and that the time is ripe to transform a debt culture into a thrift culture. Consider these "debt facts" which they cite:
The subprime mortgage crisis, which is due to "over(ly) lenient lending and over(ly) exuberant borrowing," has resulted in millions of foreclosures and sharp declines in local property tax revenues. (2) In 2008 two million Americans will lose their homes. (3)

  • In 2005 and 2006, for the first time since the Depression, Americans spent more than they saved. (4)
  • "More than 20% of lower-income families spend at least 40 percent of their income in debt payments." (5)
  • "One in seven families is dealing with a debt collector." (6)
  • "Nearly half of all credit card holders have missed payments in the last year." (7)
  • "One-of-four undergraduate students "carry credit card balances in excess of $3,000." (8)
  • A typical college graduate completes his or her degree with $20,000 in debt, up from $9,000 a decade ago. (9)
  • "More than 40 percent of college graduates who don't pursue graduate school blame student loan debt." (10)
  • Two-thirds of Americans acknowledge that they don't save enough. (11)
  • On the average Americans save less than citizens of nearly every other developed nation. (12)
  • Payday loans doubled every year from 2001 to 2006 and topped $28 billion in 2006. (13)
  • 36% of Americans say that they lost control over their finances at one point or another. 45% in the 30-49 age group admit this, as do 40% of parents with children under 18 and 46% of African-Americans. (14)

Although we have yet to see the blueprint to increase savings and decrease debt which will be released at the Washington conference, and we cannot judge whether the proposed strategies will work, we can anticipate strong opposition to the plan from predatory lenders and others who "feed upon and aggravate the debt culture," (15) and we can applaud the ambitious efforts of the Institute for American Values and its sister organizations for taking this initiative. Although debt is virtually unavoidable, even for the most frugal among us, America is on a protracted debt binge. Debt for an individual or a family can be reasonable and manageable or it can be crushing and out-of-control. When debt is overpowering, people are robbed of autonomy, pride, and the fruits of their labor. Hopefully the Washington conference and the report which it issues will be important first steps in resuscitating thrift in America.


  1. The conference is May 12-13 at the Washington Marriott, 1221 22nd Street N.W. See The Institute for American Values is a nonprofit, nonpartisan organization which seeks to strengthen the American family and the virtues of competence, character, and citizenship. See The New American Foundation is a nonprofit public policy institute which seeks to bring new voices and new ideas to public discourse on domestic and global issues. See Other co-sponsors of the conference are the Institute for Advanced Studies in Culture, University of Virginia; Demos; and Public Agenda.
  2. For a New Thrift: An Appeal to Prospective Colleagues, page 4.
  3. Ibid., p. 3
  4. Ibid.,
  5. Ibid.,
  6. Ibid.,
  7. Ibid.,
  8. Ibid.,
  9. Ibid.,
  10. Ibid.,

© 2008 Tom Shipka