Old-fashioned thrift is in short supply in North America. Savings rates in Canada and the United States have been -1% since 2005, a phenomenon known as "dissaving."

You'd have to go back to the Great Depression to see lower savings rates: At its depths in 1933, it fell to -1.5%. But that was a unique era when unemployment was so widespread people had little choice but to dip into savings to finance their consumption.

Today's Baby Boomers have no comparable excuse, raised during an unprecedented era of peace and economic prosperity. That may explain why they feel so complacent spending everything they earn.

Far from saving for the future, few families have even a six-month emergency cushion to survive job loss. Many are "just two paycheques away from bankruptcy," notes insolvency lawyer Stanley Kershman in his 2006 book, Put Your Debt on a Diet. A year later, the U. S. foreclosure crisis revealed how right he was.

Why don't we save more? Or, to use the title of a new book hitting the shelves next week, Whatever Happened to Thrift? (Yale University Press, New Haven, 2008).

There's a short answer, says author and University of Virginia business professor Ronald Wilcox: "Spending is easy. Saving is hard ... [it] requires some kind of plan."

Laurie Campbell, executive director of Credit Canada, has a simple answer for what happened to thrift: "It became old fashioned, sadly." Credit counsellors don't see much thrift and when they do it tends to be from older people. For young people, "it's not cool to be thrifty," Campbell says. "To be honest, I don't think they know the meaning of the word thrift."

Here are three definitions: TheFreeDictionary.com defines thrift as "wisdom and caution with money." Dictionary.com defines it as "economical management; economy; frugality." The Canadian Oxford defines it as "prudent financial management."

London, Ont.-based financial educator Talbot Stevens also agrees "thrift is a near-dead attitude." In 1993 he published a book called Financial Freedom Without Sacrifice, selling 145,000 copies. "I recognized most people do not want to be thrifty and sacrifice to ensure a secure financial future," he told me this week. "We want it all now, without sacrifice." People may have big houses, luxury cars, vacation homes and the appearance of prosperity, but few are financially free. "They would be very stressed if they had no income for three months," Stevens says.

In this culture, the deck is stacked against frugality. One obvious scapegoat is credit cards, but Wilcox argues they are an effect rather than a cause. "Our mailboxes are full of credit card offers because we want them."

Others blame "greedy corporations" and the giant marketing machine urging us to shop till we drop. As Wilcox notes, "the advertising industry is a US$255-billion industry in the United States for a reason -- it works."

Peer pressure is another big reason we don't save. Everyone else has plenty of stuff, and credit is an easy way to keep up with the Joneses.

In short, thrift died because of a combination of economics, psychology and sociology. Wilcox hopes it is reinvented or a major political problem is on the horizon. "The government will be obliged to deal with the financially destructive consequences of those who consume like they will become successful, but never do," he says.

He devotes a chapter to public policies that could boost saving. Taxing consumption instead of income is one idea (we already do both in Canada). Small business employees need pensions (ideally the old defined benefit plans). He'd like to see social security altered so the poor can participate in the stock market.

The looming retirement of the continent's 90 million Baby Boomers may highlight the consequences of abandoning thrift. Wilcox suggests Boomers will pressure governments to help them if they wind up broke in retirement. They will vote "for measures that transfer wealth from the people who have saved responsibly to those who have not."

Periodically, Canadian politicians float trial balloons that would do just that, such as proposals to tax retirement savings. It could happen yet, since thrift is as alien a concept to politicians as it is to voters.

- Jonathan Chevreau blogs at www.wealthyboomer.ca.