The writer is dean of the College of Business at Bellevue University.
Nebraskans realize the importance of seed corn. Americans appreciate the importance of holding something back for a rainy day and passing on something of value to their children and grandchildren. The fundamental balance between investing and consuming is captured by the American agricultural saying, “One for the blackbird, one for the crow, one for the cutworm, and one to grow.”
Fundamentally, the underpinning of a capitalistic society is built upon the same logic of setting aside a certain amount of harvest as “seed corn” for next year's planting. Americans should not expect to consume all and have someone else bail them out.
Ever clever, we have started to call all expenditures investments without due regard for whether they yield a return. Capital investments yield a return, while consumption ends with immediate gratification.
What types of investment hold the promise for a bright future? A good argument can be made that a viable nest egg invested for retirement and emergencies (savings and investing) is wise. A good-quality education that yields capabilities to produce, innovate, judge and create has always yielded a healthy harvest (learning and creating). Last in the list of investments, but not least, are strongly rooted relationships that build sustainable families, businesses and societies.
A few statistics highlight how well we are doing in setting aside our social seed corn:
>> Education. American high school students' performance is slightly below or near the average of the industrialized nations in math, science and reading, according to the 2009 results from the often-quoted international study by the Organization for Economic Cooperation and Development.
Given the massive per capita and overall spending levels on K-12 education in the United States, these scores do not indicate an amazing return. Over the past decade, the results have been fairly consistent: U.S. students rank near the average of those in industrialized countries in reading and slightly lower in science and mathematics.
>> Public debt. The U.S. public debt continues to mount. According to the website USDebt- Clock.org, our national debt now exceeds $14 trillion. Personal debt is nearing $17 trillion. Our public unfunded liabilities exceed $110 trillion. Our debt and unfunded liabilities nearly exceed the world's capital market capacity. Unfunded liability now exceeds $1 million per taxpayer. Our lack of savings places our retirements and national security at risk.
>> Government/private sector. We borrowed nearly a trillion dollars to rescue a huge swath of our private sector, such as our financial sector and automobile industry, from collapse. The government sector's underwriting of the private sector is not sustainable capitalism.
>> Families. According to the U.S. Centers for Disease Control and Prevention, the current U.S. marriage rate is 6.8 per 1,000 population and the divorce rate is 3.4 per 1,000 population. Without strong families, all relationships are strained.
Let us not forget that the most important decisions about the future of our society rest on our honest and responsible decisions. Future harvests depend on our individual behaviors.
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