"I love the dump!" exclaimed my friend over yet another glass of his home brew. We were sitting on his farmhouse porch talking about being frugal, when I began hearing about the exciting things one can find in a rural garbage dump, where, as you drop your refuse off, you can also pick up new items.

The thriftiness of this ultimate act of recycling surprised me a little, though perhaps it shouldn’t have; we were drinking home brewed beer, not only because this friend has great skill in coaxing a good glass of ale from the pot, but also because it is cheaper. And it’s not that I have not engaged in rescuing items from the garbage (such as a near-perfect condition 1920s art deco dresser for my wife), but I never saw this friend as having any need to shop at the dump.

The truth is, my friend does not need to shop at the dump, but does so because he knows the value of a dollar. Life used to be full of sayings extolling the virtue of thrift; lines such as Benjamin Franklin’s "A penny saved is a penny earned" filled life in America and beyond with the sense that saving money was the thing to do if you wanted to get ahead. Today’s consumerist culture is more likely to believe sayings such as "No interest, no payments for 12 months" rather than Mr. Franklin’s maxim.

Of course, all of this comes to mind as we watch the markets on Wall Street and around the world reverberate from the American housing bubble since it burst earlier this year. The sub-prime mortgage meltdown is, at its base, a failing of character. First, there was a failing of character at the companies lending money to people that could not pay and then selling the mortgages as a complex investment vehicle to investors looking for greater returns. There was a failing of character in millions of individual Americans who took out mortgages far exceeding what they could afford, some to just finally join the ranks of homeowners with a modest abode, others taking on ever greater mortgages to move up to the McMansion on the hill. In both cases, the company and the consumer were living beyond their means.

And that is where a study from the Institute for American Values comes in.

A report called "For a New Thrift: Confronting the Debt Culture" has been signed by 62 scholars from across the American political spectrum, it is a report that New York Times columnist David Brooks calls "the most important study you’ll read all year". The paper documents how American families have gone from saving a large portion of their income shortly after World War II, to saving next to nothing now; all the while charging more to their credit cards and buying on the instalment plan. This is hardly a culture that would value my friend’s excursions to the town dump as a virtuous act of thriftiness; this is a culture that values spending.

There is a downside to all of this spending, a downside now playing out as American consumers declare bankruptcy, with filings from students and seniors reaching new highs. Even for those who do not declare bankruptcy, the debt culture is leaving families strapped for cash and vulnerable to unexpected events, such as job loss, and car or home repairs that insurance might not cover.

We are unlikely to hear too much about the moral failings of either Wall Street or especially of Main Street during the Presidential election. Politicians are simply not willing to blame the people whose votes they are seeking. Barack Obama did make a slight nod that Washington cannot fix all during his nomination acceptance speech "More of you have lost your homes and even more are watching your home values plummet. More of you have cars you can't afford to drive, credit cards, bills you can't afford to pay, and tuition that's beyond your reach. These challenges are not all of government's making. But the failure to respond is a direct result of a broken politics in Washington and the failed policies of George W. Bush."

No doubt there were failed policies, especially as it relates to the mortgage giants Fannie Mae and Freddie Mac but those date back decades and across several presidents and congresses held by both parties. I will give Senator Obama credit, he at least acknowledged the problem, McCain chose not to mention it. But the question that arises from Obama’s statement is: Whose fault is it if Americans now have cars they cannot afford to drive, credit card bills they cannot afford to pay?

For some, they are simply victims of circumstance, perhaps losing a job at an inopportune moment. For many others, the situation is a series of bad choices; the kind of choice I and millions of others make and are enticed with in a consumer/debt culture. The truth is, most of us carry debt loads at which our grandparents would have balked. In fact according the Thrift study, Americans spent more than they earned in 2005-2006 for the first time since the Great Depression. This was despite historically low unemployment rates and at a time before the housing bubble burst, sending many families finances spiralling out of control.

One of the main recommendations from the 62 scholars that have signed onto the report is for a public education campaign to encourage thrift and savings similar to campaigns to reduce smoking or drunk driving. The authors also call for expanding and improving school savings accounts, establishing government matching savings accounts for children and encouraging credit unions and other institutions that encourage members to save not just spend. It is these proactive policies, rather than the calls for cracking down on pay day lenders that have the best chance at reshaping the culture. We need to encourage more people like my friend, willing to save engage in new culture of thrift.

Picking up the pieces from the current mess will be a major undertaking for whoever becomes the next President of the United States. We can only hope that he heeds at least some of the advice from this study and tries to reshape the debt culture so prevalent on Main Street rather than simply shaking up Wall Street.

Brian Lilley is Ottawa Bureau Chief for radio stations 1010 CFRB in
Toronto and CJAD 800 in Montreal. He is Associate Editor of MercatorNet.