I Wonder What Would Happen If Obama Calls For This In His State Of The Union Address
From
R.J. Eskow:
Archaeologists of the future will sift through our newspapers,
websites, and other ephemera and marvel at the inverted shape of our
political debate. They'll be particularly surprised to discover that, at
a time when retirement security was being destroyed for an entire
generation, politicians were posturing over how to make the problem even
worse by cutting Social Security.
And they'll marvel over how long it took us to agree on the right solution: Increasing Social Security benefits instead. ...
In a USA Today op-ed,
economist and influential blogger Duncan Black (Atrios) proposed a 20
percent increase in benefits. So did Joan McCarter at the widely-read
Daily Kos site. ...
[F]ear for the fate of Baby Boomers is warranted... This squeeze was brought
about in part by the end of fixed corporate pensions and the rise of
401(k) plans which [one commenter] calls a "grand experiment" turned "disaster."
But I consulted with major corporations on benefit plans during the
rise of 401(k)'s, and from my experience it wasn't an experiment at all.
It was a calculated wealth shift away from workers and toward
employers.
The long-term implications weren't always obvious - to employees or
policymakers - especially because these changes were often buried in
complicated "cafeteria style" benefit plans. But corporate executives
knew. As one famous CEO said to me of his company's cafeteria plan and
401(k): "I want to give them less and make them think it's more."
The other reason Baby Boomers are in dire shape is because the vast bulk of their net worth was in real estate. ...
Immediate action would stave off the impending crisis among Baby Boom
elders, while strengthening the financial security of generations to
follow.
look, I despise the move away from pensions to 401(k)s. I hate that market crashes can wipe out 1/3, 1/2, nearly all of someone's retirement portfolio and ruin everything. But that USA Today article indicates that nearly 1/3 of boomers (who had the ability to open a 401(k)? the article is unclear on lots of data) didn't even bother to open a 401(k).
ReplyDeleteSure, defined pensions are better, and putting all that retirement money in 401(k)s for the banksters and finance wheeler-dealers to play with and pilfer, but those factors have absolutely zero to do with the huge number of boomers who didn't even bother to open a 401(k) (knowing they didn't have a pension).
What would that average 401(k) balance be if more people opened a 401(k) and didn't borrow from it to speculate in the real estate market and play house flipper, or pull from their accounts to help their worthless adult children? A HUGE part of the problem is the move away from pensions, but my God, can we really ignore the huge portion that was caused by irresponsible boomer behavior?
Well, yes, a sizeable number of boomers didn't do the responsible thing, namely save via a 401k when given the opportunity. But then, that's why we have Soc. Sec., because we (the savvy folks in the 1930s) knew that so many people wouldn't have the discipline or the good luck to save and not tap those savings for other emergencies. Good luck is a large part of it, after all; you can't control accidents, bad health, your children's bad decisions/health/luck, etc.
ReplyDelete