Editor’s Note: Sheldon Garon is the Nissan Professor of History and East Asian Studies at Princeton University. He is the author of Beyond Our Means: Why America Spends While the World Saves.
By Sheldon Garon – Special to CNN
To pass the time over the holidays, my daughter and I vied to come up with the longest list of things that “Americans say are impossible, yet exist everywhere else in the First World.” Top on both lists was national health insurance, followed by a nationwide network of fast, attractive trains. But the next item would surprise most Americans: A postal savings system.
In nearly every country in Europe and East Asia, one can open a savings account at the post office. These accounts typically carry no fees and require no minimum balance or a low one. To avoid competing with banks for larger depositors, postal savings accounts are capped at an amount that serves families of modest means. Even the United States had its own postal savings system from 1911 to 1966.
Were the United States to revive postal savings, we would kill two birds with one stone. Elsewhere, postal savings have proven effective at improving the access of lower-income individuals and youth to savings institutions.
Americans are notoriously poor savers. The personal savings rate dropped to nearly zero before the 2008 crisis; it briefly rose, but has recently fallen below 4 percent. By contrast, Germans, French, Austrians, and Belgians have saved more than 10 percent over the past 30 years. A big problem is that one-fourth of low-income Americans are “unbanked.” They have no savings or checking accounts. FULL POST