After We Lose Our Homes, Is Our Retirement Next?

[Omaha Steve]

http://blog.aflcio.org/2007/12/07/after-we-lose-our-homes-is-our-retirement-next/

by Tula Connell, Dec 7, 2007

Over the past months and even years, policymakers have been puzzling about where the American consumer was getting the cash to keep spending. Surely home equity and credit cards had to be tapped by now. So where is the money coming from?

Now we know.

A monthly survey of CEOs for the first time asked chief financial officers in November if they’ve seen “an increase in the number of employees taking loans or making hardship withdrawals from their 401(k) accounts?”

A total of 18.5 percent said they had, with the most-cited reason being the need to make mortgage payments.

Some economists are predicting the next economic crisis will center on consumer credit card debt—and many of us think that crisis already is well under way. But if borrowing from our retirement future becomes a trend, the long-term ramifications of the current economic mess won’t be felt for years or even decades.

Throughout these seven years of the Bush administration, the middle class increasingly has been hard hit, with more of us needing to borrow just to get by, especially if we have to pay for health care or education for our kids. A Federal Reserve report yesterday showed just how tapped out we are when it comes to taking cash out of our homes:

The amount of equity that U.S. homeowners hold in their homes slipped in the third quarter to the lowest level on record, just above 50 percent.

FULL story at link.

[MichiganVote]

1. Yes

[Historic NY]

2. The American Dream has become the................

American nightmare, between balancing jobs, the bills, food, fuel prices, kids activities, school, college, housing, insurance, vehicles, whats left.........death and even thats expensive. The Republicans want you to work until you die, thats their solution to social security. I read recently more seniors above the age of 70 are still working because they no longer can survive on a pension. I know how they feel, I depleted my savings to make ends meet after getting hurt and retired out on injury. The pension check doesn't go far and my house is paid for.

[gateley]

3. Not if Biden can help it

Biden unveils plan to protect retirement savings

updated 11:45 a.m. ET, Thurs., Sept. 27, 2007


DES MOINES, Iowa - Democratic presidential hopeful Joe Biden released a plan to protect Americans' retirement savings and even help children begin to sock away money.

He said his plan would give a boost to Social Security, secure pensions and expand personal savings and retirement options. Such policies are needed because there are serious hurdles facing workers who are trying to save money, he said.

"What's happening is average Americans are really getting hung out to dry," Biden said in a telephone interview with The Associated Press.

The Delaware senator had been scheduled to present his plan and host campaign events in Iowa on Wednesday, but he delayed the stops because of debate on legislation to regulate troop combat tours.

Protecting pension plans
In the 1980s, Biden said 83 percent of American workers were covered by pension plans, but today only 20 percent have pensions and many of those are not secure. He said in order to keep companies from going into bankruptcy and wiping out pension plans, more must be done to make top executives accountable for the accuracy of companies' financial statements.

http://www.msnbc.msn.com/id/21012138/

http://www.joebiden.com/issues/?id=0026

[philly_bob]

4. After his voting on Bankruptcy Act, it had better be good.

My question: will he admit that those Bankruptcy Act votes were a mistake?

If not, my respect for him goes down.

[gateley]

5. I don't know if he would admit those votes were a mistake -- I honestly don't

know if he feels they were. I read his floor statements and he felt those provisions and protections were already covered in the bill. I DO know that I firmly believe he wouldn't have voted intentionally for something that he felt would unfairly hurt people. That just doesn't jibe with his record or the bills and initiatives he's introduced to help people.

But, as to you question, I honestly can't say, sorry. :shrug:

[silverlib]

6. I can't be specific...

as my memory is bad on this, but someone on DU posted that he voted for the BB because the majority at the time allowed him to put some protections in the bill if he would vote for it. The bill was going to pass anyway, whether he voted for it or not, and he negotiated some protections in exchange for his vote.

[gateley]

7. Those were the protections for single parents receiving child support --

the parent paying child support wouldn't be able to discharge that obligation by filing for bankruptcy (apparently before that, filing let that parent off the hook). He was instrumental in getting that included.

I think this poster is asking about some other amendments, and I don't know the reasons for Joe's votes regarding those particular ones.

Thanks for your help, though!! :hi:

[CGowen]

8. State pension fund's risky debt at $1 billion

Investments called 'highly inappropriate'

By David Evans | Bloomberg News
December 6, 2007

Florida's pension fund owns more than $1 billion of the same downgraded and defaulted debt that sparked a run on a state investment fund for local governments and led officials to freeze withdrawals, according to documents obtained by Bloomberg News through an open records request.

The State Board of Administration, manager of $37 billion in short-term assets, including the investment fund, also oversees the $138 billion Florida Retirement System. The board purchased $3.3 billion of debt whose top ratings were reduced following the collapse of the subprime mortgage market.

Like the hundreds of school districts and towns unable to access $14 billion frozen in the Local Government Investment Pool, Florida's 1.1 million current and retired state workers rely on the board's management to boost returns on the funds that pay their pensions. That has left them vulnerable to the same potential for losses. Also at risk are the state treasury and Citizens Property Insurance Corp., an insurer created by the state to provide hurricane coverage to residents in high-risk areas.

"These were highly inappropriate investments for taxpayers' money," said Joseph Mason, a finance professor at Drexel University in Philadelphia. "This is the tip of the iceberg for pension funds. We know the paper is sitting there. There are substantial subprime-related losses that haven't shown up yet."

...

http://www.sun-sentinel.com/news/local/florida/sfl-flfpension1206sbdec06,0,5197178.story

[formercia]

9. Don't you wish Junior had privatized Social Security?

I don't think so.

Just think of the mess we would really be in now.