This week has been a controversial week here at The College Investor, so I thought I would wrap it up on a high note about some things America get’s right with personal finance. Even with all that could be done better, that are a lot of great things to be thankful for, as you don’t always find them abroad.
If you haven’t checked out my other posts this week, here they are:
Our Leaders Can’t Pass Economics 101
Congressional Leaders Promote Individual Financial Un-Accountability
However, even with those glaring issues, we still get it right in a lot of ways. Here are a few.
Safety
I couldn’t imagine living in a time when it was uncertain whether your bank deposits would be safe. However, less than 100 years ago, that was the case. It took a depression and a lot of legislation, but today, there is a lot of safety in American finance.
Think, we have the FDIC, FCUA, SPIC, and a bunch of other regulatory agencies making sure our money is safe.
This safety extends to deposits, investment accounts, insurance, and annuities. With this safety comes stability, and with stability comes prosperity!
Taxes
Everyone complains about taxes. Everyone hates paying taxes. However, we should be thankful that in the United States, we do pay relatively low taxes compared to most other developed nations. According to the Tax Policy Center, U.S. taxes as a percentage of GDP rank 26 out of the 30 countries in the OECD, averaging just 27.3%, well below the average of 36.2%.
Compared to Europe and Canada, we have a lower tax rate than anyone except Turkey. Throw in Asia, and we the lowest except for Korea and Japan, with which we are tied.
We should be thankful that we get as many services as we do, and yet we pay relatively so little for it.
Retirement
Another area of complaint is retirement. However, with Social Security and Medicare, we do offer many safety nets that a lot of countries don’t. Beyond that, there is a lot of encouragement for individuals to save for retirement through IRAs, 401(k)s, and other vehicles. Finally, a lot of companies (although declining), still offer pensions and other benefits for retirees.
I think that this sets Americans up for successful retirements. However, unlike many European countries, we do put the burden on the individual to take care of themselves for the most part.
Readers, how else is America great when it comes to personal finance?
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 13 comments… read them below or add one }
I think we at least give our children a bit of a chance with the economics classes that are required at high schools. I would like to see a personal finance class but micro and macro classes are a start.
I think a personal finance class would be great as well!
I can’t see how anyone could believe that Social Security is going to be a good program for today’s college aged kids.
sfi
I agree with you on that point – I’ve written about it in the past. It may not help younger generations but it does exist today, and it does help. Check out the second part of that paragraph – we do place a lot of individual responsibility in retirement programs as well.
Hmm.. I don’t think we do retirement/taxes better. A majority of ones expenses in retirement come in the form of healthcare. Since we are relatively last in health care in the world. The SSI/medicare benefits are not enough. Also, if you make over a certain amount of money you’re taxed on your SSI benefits. We pay lower taxes but we pay much more out of pocket for necessities like education/healthcare.
Healthcare has its advantages and disadvantages in the US. Medicare does cost, but it isn’t extreme. As for taxes on SSI, I agree it’s odd. If you make more, you should be taxed. But what is odd is that people making over $250,000 don’t pay into SSI on those earnings, so it just seems backward.
Not to mention our freedom. Most countries are socialist or communist — and don’t have the rights that we do. We have an enormous amount to be thankful for. We take too much of it for granted and one day we will wish we had it as good as we do now.
Americans have a lot to be thankful for, but please don’t forget about all the unseen consequences behind everything you mentioned.
For example, deposits may be safer through FDIC and other related agencies, but now banks have more of a free reign to engage in unscrupulous and unsafe business practices now that they know the government will come in to bail out them and the depositors. The threat of a bank run is made much more impotent.
Americans may pay lower taxes, but each American is also on the hook for a massive amount of debt. The level of spending is more important than the level of taxation, and the U.S. government can spend with the most socialist of them all. This spending transfers away resources from the private sector, where they would have been used more efficiently.
Ahh…good old moral hazard! It goes hand-in-hand with individual financial accountability – even at the bank/corporate/government level. There needs to be more of it, and its not happening.
Great points on taxes! People don’t really realize how lucky we actually are.
The last week was great for you. Controversy is always good.
We need to be ranked 30 out of 30 for OECD taxes!
I’m glad we have intelectual property rights!
That is a good call – our laws that protect IP and other property! While they need some reform, they are probably the best in the world!
Given Monsanto (for one) and the ludicrousness of software companies suing the heck out of each other because one uses a touch button that happens to look a little similar (for two), I’m not so sure about that. Unless you’re looking at it from the viewpoint of the winners or the lawyers.
I’m not arguing that people should be free to rip off and pass off their products as their competitors (that would be fraud) or that licenses should be invalid. But… there needs to be serious reform or elimination of the patent privilege system that grants a monopoly on rather spurious considerations.