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Hard work is also an American passion, in part because of the Puritan tradition. Even so, the supposedly money-mad U.S. may actually be less careful about money itself than any other nation that has come to world power. Every now and then, the U.S. stumbles. It suffered eleven financial crises in the 19th century; in 1929, an excessively casual attitude about speculation helped bring on history's classic crash. Since then, practically all the received wisdom about Government controls, budgets, banking and trade has been scrapped or substantially revised. Americans are still far from the world's most prudent people.
They tend to spend lavishly and save much less than Europeans, or the Japanese, who lead all other people in the share of national income saved or reinvested (about one-third). Since easy credit helps to grease the U.S. economy, some economists regard excessive thrift as an absolute danger to American prosperity. The Federal Government has balanced its budget in only about one of every five years since 1940. In the postwar era, the U.S. balance of payments has rarely been in surplus, and that situation has weakened the U.S. dollar's once almighty position in world markets.
Priorities Needed
If the U.S. can be faulted for profligacy, it can also be lauded for international generosity. In many ways, the U.S. has been penalized in foreign-money markets for doing all the right things —extending $115 billion in foreign aid since 1945, helping capital-starved nations by making loans and investments, permitting American tourists to spend freely abroad. All this has led to the transfer of billions in U.S. gold to the Europeans. Only in very recent years has the U.S. begun to realize the inescapable need to bring its accounts into balance by means that economists call "fiscal discipline."
Unless the U.S. maintains a strong balance of payments position, its dollar may suffer many of the same pressures that now fracture the franc. Sooner or later a nation has to pay for the way it lives—and wants to live. As the U.S. approaches a trillion-dollar economy, it ought to have enough resources to respond to social needs without necessarily sacrificing sound money. One of the first jobs facing President-elect Nixon is to establish a set of priorities so that the U.S. can live within its means, yet not so meanly that some people will be shortchanged while others enjoy ever-mounting affluence. In that sense, how America spends its money in the next few years will also reflect the truth and strength of its aspirations.