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Remember that age-old Aesops fable, The Ant and The Grasshopper? The version I was told as a child depicted the Grasshopper singing and dancing during the lazy summer months, while the Ant fastidiously worked and stored away food. When winter came around, the Ant had food but the Grasshopper went hungry. Moral of the story? Work hard and save.

I’ll probably tell the next generation this same story with the same message. But I’d be concealing today’s reality. A more realistic version of the story would depict the Grasshopper getting a bail-out, a hand-out, or a stimulus check at the expense of the hardworking Ant.

Savers get Penalized

This week’s issue of The Economist’s article, A lament for savers, describes this phenomenon. “In theory, everybody regards thrift as a virtue,” it writes. “In practice, they treat it as a vice”.

It’s true. Those who squirrel away their stimulus checks are chided for hurting the economy. Spending is patriotic. Even in church, during prayer time, a lady asked us to pray for local small businesses. And then she encouraged us to all go out to eat more often.

These are tough economic times, right? Perhaps this is just a temporary bias towards spenders. Well, maybe. But even long-standing institutions like the tax code put savers at a disadvantage. Interest income is taxable, whereas mortgage interest is tax-deductible. So, go ahead. The government wants you to take out a big loan and buy that expensive house. If you really can’t afford it, don’t worry, because you just might get a bail-out.

Posted on February 20th, 2009 by Ryan
Filed under: church, economic theory, societal concerns