David Blatt, director of the Oklahoma Policy Institute, had an insightful post on his blog this week about building savings and assets among Oklahomans.
in 2006, more than one in five Oklahoma households was in “asset poverty”, meaning that it had insufficient net worth to subsist at the federal poverty level for three months if income were interrupted, such as due to a job loss. Without savings, any minor setback can turn into a full-fledged crisis. More importantly, perhaps, without access to savings to attend college, buy a home, start a business, or retire, the pathway out of poverty and towards economic security is blocked.
The one-to-five number has probably risen here given the recent financial crisis, which has brought higher unemployment and also resulted in furloughs for government workers.
Blatt has noted in the past that focusing on asset building is one of the best ways to alleviate poverty. As families accrue assets, they can better handle financial emergencies and also expand their economic security through long-term investments, such as purchasing a home.
Asset building is a different, long-term approach to poverty, and one that deserves serious consideration. Government assistance for poorer families meets immediate needs, but often doesn’t really address underlying causes and long-term stability.
In his post, Blatt discusses the America Saving for Personal Investment, Retirement, and Education Act of 2010 (ASPIRE), which has been introduced in Congress. The act would create a lifetime savings account for each child at birth and encourage more savings through the years. This could help fund a college education or a home.
This is innovative legislation that should draw non-partisan support. Even conservatives, as Blatt notes, can get behind the legislation because it “promotes private wealth.”