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Penny-Pinching: As American as Apple Pie

July 6, 2013
Certain character traits are as American as apple pie. Among these are hard work, ingenuity, and thrift.

What are the character traits that made America great?  If you were asked to list them, how many different ones would you come up with?  Are there many, or are there just a few necessary ones?

Any list of early American virtues would include hard work, integrity, and ingenuity.  Men such as Thomas Edison, Benjamin Franklin, Henry Ford, and Alexander Graham Bell quickly come to mind.  However, there is another characteristic exhibited by some of these men that we today often forget.

That virtue is thrift.

What is thrift?

Merriam-Webster’s online dictionary defines thrift as careful management, especially of money.  Basically the idea is to spend less than you earn and look for the very best quality available within your budget.  In practical daily living, thrift often entails avoiding impulse buying, researching purchases before you make them, and looking to cut costs at almost any opportunity.  Another name for thrift, sometimes vilified and sometimes almost deified, is Penny-Pinching.

Who is thrifty?

We’ve all heard of the old miser who died in deplorable conditions of abject poverty while independently wealthy.  This is not thrift.  Wise use of their money could have made life at least a little better without giving in to frivolity.

We’ve all heard of the fable of the grasshopper and the ant, in which the grasshopper frolicked away the times of plenty and then suffered in times of want.  This is obviously not thrift.

A good example of thrift is either a diligent housewife or a careful small business owner.  The diligent housewife realizes that her family has needs and does her best to maximize every dollar.  She doesn’t hold back at the expense of her family, and she realizes that she cannot afford waste.  The owner of a small business realizes that ruin and bankruptcy lurk potentially around every corner.  He looks to cut costs and eliminate waste while maximizing return on investment.

The colonists of the original thirteen states and the settlers that drove American expansion had to exercise thrift to survive.  Poor management of resources frequently meant death or extreme hardship.

Thrift in government

Did you realize that our government was originally set up to receive most of its operating expenses from import and export taxes alone?  The use of an income tax to support a cumbersome government is actually a more recent development in American history.  There was a period during the Civil War in which it was used, after which it was repealed and was not reinstated until 1913, when our country was 137 years old.

Federal Income by Source 2011

Source: Congressional Budget Office, August 2011 baseline.

Using this graph as an example, the operating expenses of our government would be reduced dramatically – by at least 80%.  I have to believe that would encourage a return to practices somewhat resembling thrift.

In spite of this massive income our debt continues to grow.  Currently, we are operating a “budget” in which we expect to spend far more than we make or have on hand, yet our government thinks this is ok and should be expanded.  I cannot think of another situation in which this would be considered operating within a budget.  This type of reckless spending would soon be stopped if I were to try it, and should be stopped in our government.

I, for one, would be in favor of dramatically reducing government spending and returning to a more controlled, deliberate, and thrifty practice.

Thank you for reading my thoughts,

Dave

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