the cheating culture

President Bush's vision of an "ownership society" reflects the belief that personal wealth - a home, a business, a nest egg for the future - is vital to middle-class prosperity. Nothing could be truer. But in championing his plan to help Americans build assets, Mr. Bush - like many politicians from both parties - underestimates the obstacles to creating a nation of wealth holders.

It is easy to believe that an ownership society is just around the corner. Nearly 70 percent of households own their home, the US Census Bureau reports, a historic high. And some 50 percent of households own stock, a huge increase from two decades ago. These statistics, however, tell only part of a largely unhappy story about wealth and ownership trends in America.

Start with this shocking fact: Between 1983 and 1998, according to government data, the bottom 40 percent of households experienced a 76 percent decrease in their net worth. For too many Americans, owning anything is a distant dream; the daily reality is a heavy burden of high-interest debt. Between 1989 and 2001, the average household experienced a 53 percent increase in credit card debt, with the poorest families experiencing a 184 percent rise in debt. Not surprisingly, personal bankruptcies are way up: 1.6 million Americans filed for bankruptcy in 2003, nearly double the number in 1994.

Even Americans who already seem to be part of the ownership class aren't that well off. While some homeowners have scored a financial windfall from rising real estate prices, others barely have any wealth in their homes at all. In fact, US homeowners today have less equity on average than at nearly any point over the past 50 years. And, thanks to the rising popularity of home-equity loans, more homeowners have been dipping into their equity to cover day-to-day expenses.

The rosy picture of popular stock ownership is also deceiving. Barely a third of households have more than $ 5,000 worth of equities. Moreover, the reason that so many more households own stock is that, increasingly, employers only offer defined contribution 401(k) pension plans. In contrast to the guaranteed pensions of the past, these plans shift risk onto employees, and life in this corner of the ownership society can be rough indeed: Total return on the S&P 500 index for the past five years has been minus 2.2 percent.

To close the vast distance between the America of today and a true ownership society, major initiatives are needed that go far beyond the weak proposals being discussed in this campaign year. (President Bush, for example, is proposing a new Lifetime Savings Account that would mostly help wealthier Americans shelter more of their income from taxes.) First, a historic new push is needed to help low-income Americans become homeowners. This should include creating a matching savings program to help low-income families save toward a down payment on a home.

First-time home buyers earning less than $ 50,000 a year would receive a dollar-for-dollar match from the federal government, up to $ 7,500, for money saved toward a down payment. Additionally, the mortgage interest deduction should be made refundable to assist low-income families whose tax burdens are too low to qualify them for the deduction and savings enjoyed by more affluent Americans.

Second, urgent action is needed to help Americans avoid falling deeply into debt. We can't become an ownership society as long as we're a nation of debtors.

A national usury law should be enacted to protect consumers from the predatory practices of some credit companies and other lenders. The law should establish caps on lending rates that are tied to the prime rate - thus ensuring that lenders can operate profitably during periods of high inflation, when interest rates tend to climb, but that savings are passed on to customers when the national interest rate declines.

Another top priority is stiff penalties for predatory lenders who foist mortgages with excessive interest rates on home buyers.

Third and finally, the US should follow Britain's lead and provide each newborn child with an asset account endowed at birth - money that will grow over time to ensure that every child has a better chance of accumulating wealth and owning property earlier in life.

The US has made great strides in the past toward an ownership society - most notably after World War II, when the GI Bill and other far-reaching measures helped increase home-ownership rates radically. President Bush has done a service by drawing new attention to the great American ideal of wealth building. What is needed now is bold action to achieve that ideal.