One of the biggest problems for Americans is that we are not sufficiently future-oriented. This is true in both an economic and a spiritual sense. We usually sin because we want to gratify an impulse in the present without due regard for the long-run (or eternal) consequences.
In the 1960s, Harvard sociologist Edward Banfield raised hackles across the academic world with his book The Unheavenly City, which demonstrated that the socioeconomic status of individuals and groups is closely correlated to their time preference; future-oriented groups are upwardly mobile with an ethic of deferred gratification, saving, and investment, whereas present-oriented groups are much more likely to suffer from chronic poverty.
Present-orientation leads to conspicuous consumption, maxed-out credit cards, trillion-dollar deficits, and empty retirement accounts. Future-orientation leads to modest lifestyles, balanced budgets, healthy investments, and economic security.
Yesterday there was a great column in the Wall Street Journal which highlighted this problem. The author urges people to consider their opportunity cost when deciding to spend money. That $500 you’re thinking about dropping on an iPad2 could instead be invested and turn into $2,000 in thirty years. Would you rather have the iPad today or $2,000 in thirty years? If you can’t conceive waiting thirty years for anything, your time preference may be too high!
Many people will say, “I’ll take the iPad today. In thirty years the government will take care of me.” Lots of luck!