American Pension Funds Have Lost $2 Trillion
So how long until we’re all talking about a federal bailout for pension plans?
WASHINGTON (AP) - The top congressional budget analyst says pension plans have lost as much as $2 trillion in the past 15 months.
Peter Orszag told a House panel on Tuesday that the losses are likely to force many workers to hold off on major purchases and delay their retirements.
The panel was investigating how the housing, credit and financial troubles battering the economy have affected retirement savings.
More than half the people surveyed in a recent Associated Press-GfK poll said they worry that they will have to work longer because the value of their retirement savings has declined.
What’s sad is that many Democrats are going to use this bailout fiasco as fodder for their opposition to the privatization of things like Social Security and health care (health savings accounts, for instance). It’ll likely be an effective tactic given just how little most Americans understand about what happened to our credit markets.
It’s worth noting that the credit collapse that’s causing all the problems right now didn’t happen because of free trading in the market. It happened because 51% of our nation’s $12 trillion mortgage market was tied up with two government-sponsored companies (Fannie and Freddie), and many of the loans that made up that $12 trillion market were given to people who couldn’t afford them under mandates from the government.
Put simply: The market collapsed because of government interference. If the government had stayed out, we wouldn’t have had this collapse.
But the Democrats aren’t likely to mention that fact when using the collapse to make their points against privatizing certain government programs.
Rodney Graves
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robert108
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