Obama Announces Plans to Spur Retirement Savings

Recognizing that few Americans have adequate savings for retirement, President Obama today announced four plans that do not require Congressional approval.

“The fact is, even before this recession hit, the savings rate was essentially zero, while borrowing had risen and credit card debt had increased,” Mr. Obama said in his weekly radio address. “Half of America’s work force doesn’t have access to a retirement plan at work. And fewer than 10 percent of those without workplace retirement plans have one of their own.”

Will any of the plans help you? If not, what would you have recommended instead? Here is the transcript of his weekly address and here is the factsheet on the four plans.

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    All of these plans... (5.00 / 2) (#2)
    by Dadler on Sat Sep 05, 2009 at 01:32:42 PM EST
    ...are contradictory to the thing that we are told is the basis of our economy -- consumerism.  

    you cannot encourage, ne brainwash, your populace from the day they are born with images and messages of how to be a good consuming citizen for the benefit of the economy, and then tell them, but wait, save enough so when you're old and decrepit you don't end up on the street.

    you cannot have it both ways.  and, soon enough, we will all find this out, those of us who haven't already, that is.  our entire game is rigged, if we can't see that clearly at this point, well, we are hopeless.

    But Obama wants it both ways (5.00 / 1) (#16)
    by Militarytracy on Sat Sep 05, 2009 at 02:35:45 PM EST
    That is the world that he seems convinced actually exists out there.

    This seems oddly timed. (5.00 / 2) (#3)
    by EL seattle on Sat Sep 05, 2009 at 01:45:39 PM EST
    The concepts are nice, but it almost seems like these plans were scheduled and the speech was written several months ago or something...

    For instance, the speech acknowledges severe 401(k) damages in the third paragraph:

    And the decline in the financial markets has led to a decline in the value of 401(k)s and other sources of savings and retirement security. As a result, over the past two years, the American people have lost about $2 trillion in retirement savings.

    But the still-recent instability of the stock market and 401(k)s are forgotten by the time the speech hits the seventh paragraph:

    First, we're going to make it easier for small businesses to do what large businesses do: allow workers to automatically enroll in a 401(k) or an individual retirement account.

    This would all makes sense if the markets were stable like they were in the good ol' golden age.  But today I think that maybe some attention should be paid to the new realities of a world where any investment seems to have a built-in potential for failure.

    Short of privatizing Social Security, (5.00 / 5) (#4)
    by KeysDan on Sat Sep 05, 2009 at 01:53:57 PM EST
    encouraging greater activity in retirement accounts, such as 40l Ks, is about as good a way as any to make more money available to Wall Street.

    Pick your plan (5.00 / 1) (#5)
    by waldenpond on Sat Sep 05, 2009 at 02:07:28 PM EST
    You should be able to pick the risk you are willing to take... stock market (high risk) or CDs/T-bills (low return but no risk) etc.

    You mean after the jobless report yesterday (5.00 / 1) (#49)
    by Cream City on Sat Sep 05, 2009 at 04:00:44 PM EST
    that has unemployment at almost the dreaded 10 percent (officially, so we know it's higher) -- this probably wasn't the wisest topic for another of teh greatest speeches ever today?



    To me, it sounds (5.00 / 4) (#6)
    by my opinion on Sat Sep 05, 2009 at 02:11:12 PM EST
    a plan for wall street to get more of our money to play with and lose while making big profits.

    As far as a plan for getting people to save money goes, actually helping the economy for the average person and not the rich would've been a great start.

    Yes, and Wall St (5.00 / 3) (#63)
    by KeysDan on Sat Sep 05, 2009 at 05:48:41 PM EST
    has that money for a long time before payouts, what with penalties for early withdrawal and all.  No word on tax-exempt interest on savings accounts, as an incentive for savings.

    Yes, so I'm not leaving the job market (5.00 / 7) (#7)
    by Cream City on Sat Sep 05, 2009 at 02:12:25 PM EST
    any time soon, as I had hoped to do to make room for your generation.  It would be good to see some plan that would help us move on to our "horizons" (as every retirement home brochure we get in the mail puts it) that would help the job market for your generation, my kids, too, and thus the current economy.

    I do wonder whether what has happened to those of us who have saved for decades toward a retirement day, giving up a lot to put in 401s and the like only to see them nosedive now, will discourage younger generations from saving rather than encourage them.  Maybe we ought to have carpe diemed and spent it all on travel then that we now cannot do, after all -- because we have to keep working to help our out-of-work kids.

    If it makes you feel any better (5.00 / 1) (#24)
    by cawaltz on Sat Sep 05, 2009 at 02:51:13 PM EST
    the folks who bought into a defined benefit plan (like the ones at GM)seem to be getting screwed over too.

    My husband has RR retirement which is a defined plan and one of the few good ones left. I am looking at these other defined plan folk though and saying a little prayer every evening that it stays solvent.


    It doesn't make me feel better (5.00 / 3) (#30)
    by Militarytracy on Sat Sep 05, 2009 at 03:06:25 PM EST
    Because Wall Street ripped everybody off we now must figure out how the boomers can age and end their lives with dignity.  This is only the beginning of feeling and dealing with what Wall Street did to all of us.  I guess that is why Obama just doesn't seem to get it yet, it isn't the actual bomb that went off that is going to kill everything....it's the radiation.  But when our retirees don't have anything to retire on it is no better than our Emergency rooms clogged with uninsured that no private physician will treat!  They won't just go away or disappear into the mists, they are our family or our neighbors or at the very least they will be cluttering up our sidewalks with their homeless bodies under siege by dementia.  So when I read stupid solutions like those proposed it makes me want to scream because it is my generation that will be figuring this out....or trying to ignore this like our current president is.

    Whether this time period comes to be (none / 0) (#20)
    by Militarytracy on Sat Sep 05, 2009 at 02:42:27 PM EST
    known as a second great depression or not, one thing happened that will affect generations for about the next 20 years again just like the last time Wall Street did this to fewer investors, and that is that nobody is going to invest in the markets until there is regulation. Secondly, the stock market is never ever going to be anything larger than "gambling" so it should never be considered a retirment plan and it won't be again until everyone forgets again what ended up happening when we just gave them our money and "trusted" them to make it bigger for us.

    It barely (5.00 / 3) (#8)
    by TeresaInSnow2 on Sat Sep 05, 2009 at 02:14:39 PM EST
    helps the self-employed -- those with only IRA's and health savings accounts available for retirement.

    Is he joking? (5.00 / 11) (#9)
    by kdog on Sat Sep 05, 2009 at 02:17:57 PM EST
    Automatic enrollment in a 401K?  As if Wall St. doesn't get enough favors?  No thanks.

    Tax returns in the form of savings bonds?  Double no thanks. For working stiffs a vig return is counted on as part of your yearly income, there is no doing without it...the utility co. ain't gonna wait for your bonds to mature.

    Unused vacation/sick time?  My outfit, like many others, has a use it or lose it policy...not applicable.  

    This is garbage folks...the problem isn't that we don't know how to save, the problem is we've got nothing to save...could he be this out of touch?  If they wasted more than 10 minutes comin' up with this tripe they should get their paychecks docked.  

    It is ridiculous to attempt to encourage (5.00 / 4) (#11)
    by Militarytracy on Sat Sep 05, 2009 at 02:25:40 PM EST
    401k participation at this point.  Some people will never get over the fact that just shoveling money monthly into an investment that you know almost nothing about and that you can regulate nothing about is incredibly stupid and it looks like Obama is one of those people.  I find it almost impossible to believe that 401k's are going to provide any sort of substantial retirements for people in my age group.  This economy hasn't even stopped deflating yet.  The toxic assets are still sitting on the books.  This year corporations are going to finish with very large losses.  The whole idea is ridiculous.  No 401k is getting one cent of my money for a very very very long time if ever again.

    Heck, I've already got years of work for (5.00 / 6) (#13)
    by MyLeftMind on Sat Sep 05, 2009 at 02:31:47 PM EST
    a public retirement system that I can't even leave to my family because my co-parent is the same sex as me. The IRS doesn't recognize same-sex marital contracts as valid, so if I die today, I can only leave my family a lump sum, minus taxes. That means my $500,000 retirement package is worth about $60,000 to my kids.

    Please Prez Obama, give me something I can actually USE.  

    The ideas aren't awful (5.00 / 1) (#14)
    by cawaltz on Sat Sep 05, 2009 at 02:34:37 PM EST
    I have some caveats though. If I am a person making $7.25 an hour I'm not saving it's because my wages aren't keeping up with inflation and because the inflationary measure doesn't measure stuff like food and fuel(pretty essential things). Somehow, someway it would be nice if he figured out how to get the lowest paid at the very least wages adjusted for inflation.

    I know he is examining and agrees that poverty level and how it is configured is not accurate(and I give him points for actually putting policy first in this instance) but I have to wonder if he has ever tried to find the ability to save when you fall in the lower levels of income. It would be a great exercise for him to examine the concept(heck why not make it a group activity and let Summers and Geitner , oh and I don't think we should forget folks like Sebelius join in). If I make x amount of dollars how much do I need or can I afford to allot for housing(30% or lower seems to be the standard although I think I'd be hard pressed to find $348 housing on that $7.25 an hour job), electricity(it went up 17% where I am this year, yikes it still only comprises less than 10% of MY budget though and would probably comprise a small fraction more for someone who makes minimum wage even with being thrifty< I'll even be generous and assume water/gas included as well as phone), food((about 10% if using the thrifty plan at USDA, health care(they are suggesting 16% just for premiums for an individual I believe)not including a co pay or a shared cost for medicine or a dental plan. Transportation(I'll pretend that they forwent saving and bought the car outright and are just paying liability or have a bus pass put in 6% or a mere 70 bucks) Oh let's not forget a 2% state tax or "fee" since that is all the rage right outright either to pay for my kids schooling, police, fire,etc etc, yes I'll get it back but not THIS year). By my count we're at 74% of the budget gone and we haven't even started including clothing or co pays or the random I need to replace a tire or buy a coat and boots. I didn't even consider purchasing something like cable or including life insurance, let alone the stupidity of being stuck paying a credit card that was offered off. Is it any wonder some people aren't saving? It isn't they don't want to it's that they CAN'T because there just isn't enough money left at the end of the month.

    It's going to get worse too since stuff like health care seems stuck at status quo.

    While I applaud his effort I have to wonder if he truly doesn't understand how economically vulnerable people are right now and perhaps this might not be the BEST time to ask people who are using their savings to live due to their unemployment ot consider how they are going to save for a future that looks bleak.

    Just one more reminder (5.00 / 1) (#17)
    by Spamlet on Sat Sep 05, 2009 at 02:35:48 PM EST
    that, very generally speaking, the white-shoe Republicans of the 1950s were wild-eyed radicals compared to todays "liberal" Democrats.

    What is a white shoe Republican? (5.00 / 1) (#23)
    by Militarytracy on Sat Sep 05, 2009 at 02:48:31 PM EST
    I Didn't even hit the planet til 65

    A white-shoe Republican (5.00 / 2) (#29)
    by Spamlet on Sat Sep 05, 2009 at 03:01:48 PM EST
    is an upper-middle-class Republican who belongs to a country club, by contrast with those members of his own party whom Lee Atwater unkindly called the "extra-chromosome conservatives." George Herbert Walker Bush, like his father, Senator Prescott Bush, used to be a white-shoe Republican. But that was in the days before GHWB developed a taste for pork rinds.

    None of these plans will help me. (5.00 / 4) (#19)
    by scribe on Sat Sep 05, 2009 at 02:41:06 PM EST
    What would really help would be (a) finishing the sale of my condo and (b) a full-time job with a decent salary.

    I can save and economize with the best of them, and frankly I see no reason to put money into the hands of a 401k or any other Wall Street program.

    Just tell me what BO's smoking, so I can stay away from it.  I don't want to suffer similar delusions.

    My husband bought a Harley (none / 0) (#25)
    by Militarytracy on Sat Sep 05, 2009 at 02:51:18 PM EST
    And it sat there.  It's paid for now and he told me that he really doesn't want it and to sell it while he's gone.....don't have it here when he gets back from Afghanistan.  Fine Honey, I'll have that dollar for it too when you get back Babe.

    Well, if he's going to A'Stan (none / 0) (#28)
    by scribe on Sat Sep 05, 2009 at 02:58:53 PM EST
    and wants it gone when he comes back, that gives you time to sell it.  It's not like you're trying to sell it in two weeks or anything.

    That, and you've got more aviators around, and surely one of them wants a Harley.

    Good luck to him.


    The aviators are the saving grace (none / 0) (#31)
    by Militarytracy on Sat Sep 05, 2009 at 03:09:32 PM EST
    If I can get this thing detailed, it has almost zero miles on it....they all can get a loan on a phone call usually because the military isn't laying off......yet

    That, and there's a large proportion (5.00 / 1) (#43)
    by scribe on Sat Sep 05, 2009 at 03:53:13 PM EST
    of aviators who just have to meet their need for speed.

    Even if it is nap-o-the-earth at 150 or so - certainly more interesting and arguably more exciting than 1500 at 30,000 feet.


    Listen to you :) (none / 0) (#52)
    by Militarytracy on Sat Sep 05, 2009 at 04:17:33 PM EST
    Preying upon that rotorhead inner child usually allowed to go wild.....because if we made these guys deal in reality would they really get into something so fragile and fly around while people shot rpg's at them :)

    Somehow, this brought to mind (5.00 / 1) (#22)
    by Cream City on Sat Sep 05, 2009 at 02:47:02 PM EST
    a speech I went to find, a speech by a president exhorting Americans to continue to work toward "larger savings" and such.

    I found it.  Unfortunately, it was the famous "rugged individualism" speech given by Herbert Hoover.

    Hoover (5.00 / 8) (#26)
    by Spamlet on Sat Sep 05, 2009 at 02:56:11 PM EST
    Well, Obama is sucking like one.

    BHO (none / 0) (#34)
    by dead dancer on Sat Sep 05, 2009 at 03:19:17 PM EST
    Barack Hoover (Hussein) Obama II

    +1000 (none / 0) (#57)
    by lambert on Sat Sep 05, 2009 at 05:08:50 PM EST

    How about making some of those banks we bailed out (5.00 / 4) (#32)
    by ruffian on Sat Sep 05, 2009 at 03:11:36 PM EST
    pay more than 1% interest on savings accounts. I'd save more if  I could see it grow at all.

    Yeah, I'm a dreamer.

    Heh (none / 0) (#39)
    by cawaltz on Sat Sep 05, 2009 at 03:30:37 PM EST
    They need to provide you with a "return" on your investment that you have with them already- the bailout.

    How in the world is poor Bank of America going to pay it's CEO if you insist on a return for the bailout AND an actual return on any savings you place in a bank?/snark


    You're right (none / 0) (#41)
    by ruffian on Sat Sep 05, 2009 at 03:46:15 PM EST
    Those Gulfstreams don't pay for themselves.

    Guess I'll do what my president says and keep gambling my money in a 401k. Sure hope they aren't planning another bank crash for around 2025.


    sounds like a backdoor plot to privatize (5.00 / 3) (#33)
    by iceblinkjm on Sat Sep 05, 2009 at 03:14:53 PM EST
    Social Security if you ask me. Mr.Obama is sounding more and more Republican as the months go by. What a LOOSER!

    Is the back door to undermining (5.00 / 2) (#35)
    by oculus on Sat Sep 05, 2009 at 03:19:47 PM EST
    Social security benefits?

    Methinks perhaps (5.00 / 2) (#36)
    by nycstray on Sat Sep 05, 2009 at 03:22:12 PM EST
    SS did come up a week or so ago as being on the agenda . . .

    I guess we'll all be retiring on hope and (spare) change, eh?


    As if (5.00 / 3) (#38)
    by cawaltz on Sat Sep 05, 2009 at 03:26:21 PM EST
    he hasn't riled the senior population up enough with discussion of how he is going to save money by reforming Medicare right? If this is about Social Security reform then he needs to RETHINK.

    I know that the younger demographic went more heavily for him then the older demographic but he really must be shooting for no one in the 50 or over category to vote for him. It's political suicide if this is about Social Security reform.


    And if more of the older demographic (5.00 / 3) (#44)
    by Cream City on Sat Sep 05, 2009 at 03:56:08 PM EST
    come to the polls instead of stay home, as they did last year -- when the voter turnout relative to the population of eligible voters actually dropped from what it was in 2004.  So 2008 was the first decline in presidential election turnout since 1996, notably with the decline in white voters 45 and older, many of whom said they just didn't like the candidates enough to go to the polls.  (I happened to have pulled out my clip of the report today and had it on my desk for other purposes.)

    Imagine what happens if those voters have reason to emerge from their apathy to really dislike the candidate next time, if he keeps showing how much he really dislikes them.


    Generational warfare (5.00 / 6) (#51)
    by caseyOR on Sat Sep 05, 2009 at 04:13:00 PM EST
    Nobody flogged the "baby boomers are bad! and selfish" meme more than Obama in the last campaign. So, younger voters are primed to hate the boomers already. How much worse will it get when it becomes painfully clear that this great not-quit- a- depression recession has destroyed the retirement incomes of an entire generation?

    Already we see that boomers are working rather than retiring because of the real estate and financial crash. They cannot afford to leave their jobs. Younger people cannot find work both because boomers aren't retiring and employers are not hiring. How long will the younger generation tolerate this?

    And then what happens when boomers are too old and sick to keep their jobs? Do the millenials then explode in anger at the expense of caring for the aging boomers?

    Sometimes, in the dark paranoid recesses of my mind I think that this hating on the boomers was all part of Obama's plan to dismantle SS.


    You beat me to it n/t (none / 0) (#53)
    by Spamlet on Sat Sep 05, 2009 at 04:40:57 PM EST
    The phrase you need to watch out for ... (5.00 / 1) (#45)
    by FreakyBeaky on Sat Sep 05, 2009 at 03:57:14 PM EST
    ... is "an add-on, not a carve-out."  Not this proposal, IMO.  

    Not to bash liberal technocrats some more, but some people seem not to get that an "add-on" SS private account would eventually become a "carve-out" because markets will not always go down, and at some point while they are going up, people will conclude that if some is good, more is better, and not realize their error until too late.  


    Can you map out for me (none / 0) (#37)
    by Militarytracy on Sat Sep 05, 2009 at 03:23:27 PM EST
    how that could come about?  You are the second person to post this concern but I'm not getting how that would go down?

    This could be a softy entry into (5.00 / 2) (#40)
    by nycstray on Sat Sep 05, 2009 at 03:36:00 PM EST
    the waters and the beginning of a woo-in. A lil' personal responsibility with a helping hand . . . all warm and fuzzy.

    They'll get to that ol' "entitlement" one way or another. I'd bank on it, but I'm not sure of the return  ;)


    There is no return out there at this time (none / 0) (#50)
    by Militarytracy on Sat Sep 05, 2009 at 04:09:09 PM EST
    almost impossible too when an economy is deflating.  Not that facts matter much these days, propaganda that you can get sold seems to be worth so much more when it comes time to actually produce something tangible.

    It's gonna go over like a lead balloon (none / 0) (#60)
    by cawaltz on Sat Sep 05, 2009 at 05:32:19 PM EST
    if people wanted the "personal responsibility and pull yourselves up by the bootstraps" schtick they would have voted for the party that invented it. They want a leader that is willing to lead and solve problems with Congress on their behalf- not a lecture.

    (really big sigh)


    This is a great idea, 'cos markets never go down (5.00 / 4) (#42)
    by FreakyBeaky on Sat Sep 05, 2009 at 03:51:43 PM EST
    The short version: yet another tone-deaf, small-bore, timid, and missing-the-point proposal from President Milquetoast Goodspeech that may (or may not) be desirable, and may (or may not) be necessary, but is not sufficient.

    The long version:  Key phrases here are things we heard during the primary and general election campaigns, if we had our ears to the ground, such as "nudge," libertarian paternalism," and "what the hell are you thinking?"  

    These are ideas beloved of liberal technocrats, people like, say, Austan Goolsbee, or Brad DeLong, the latter of whom you might otherwise think is pretty sharp (I do, for the record).  They argue that non-participation in 401(k)s, etc., leaves retirement money on the table, especially on the part of those who can least afford to leave it, and that if we just make even a small amount of investment and savings the default option rather than an active choice, we can clear that money off the table to the benefit of all. Dirt cheap, falling-off-a-log easy, zero conflict, and everybody wins!  Yay for good government!

    This is OK as far as it goes, but it has two major flaws: first of all, people decline to sign up for 401ks and the like largely because they can't afford to, not because they just don't get it; secondly, its very pre-2008 to assume asset prices are going to appreciate just because, well, they always have if you average it out over a long enough period of time.  Past performance is no guarantee of future results, as they say in the fine print, and if you just happen to have to retire in a down period you will find out the hidden meaning of the word "average" (i.e., "cover for a multitude of inconvenient data points.")

    Since I'm bored and long-winded this afternoon, I'll add a third thing: this looked like a much better idea a couple of years ago than it does today, and I think there is going to be a new era of skepticism about 401ks, during which people conclude that they've been sold a bill of goods, and that no matter how you dress it up, $ in a 401k is invested, not saved, and that these things are not the same.

    As I said above (5.00 / 3) (#68)
    by cawaltz on Sat Sep 05, 2009 at 07:41:19 PM EST
    it would be interesting for them to see what real families struggle with daily. I'd like to see them do an exercise that requires them to complete a budget that deals with the realities of a minimum wage take home pay and tell people exactly what they are supposed to not pay(is it food, rent, utilities, transport, health care or just the preparation for little everyday purchases like clothing)to "save". If you are struggling in the moment it is a luxury and almost counterproductive to plan for some far off distant point in the future.

    I'm not sure that a family that can afford $600 sneakers for dog walks or that vacations at Martha's vineyard completely understands what it is like to have to pray that the family car passes inspection so that you don't have to sink $200 on new tires or brakes for the thing and blow almost your entire "incidental fund" for the month.


    Yep, I wondered about how well (none / 0) (#48)
    by Cream City on Sat Sep 05, 2009 at 03:58:50 PM EST
    this would sell in the post-2008 economy in my comment above . . . and your details convince me.

    I have an idea (5.00 / 3) (#54)
    by Militarytracy on Sat Sep 05, 2009 at 04:41:48 PM EST
    Why can't we all invest in a bond program that would be the seed money to start the National Health Insurance Co-Op?

    You noticed (5.00 / 1) (#55)
    by jimakaPPJ on Sat Sep 05, 2009 at 04:58:57 PM EST
    and that no matter how you dress it up, $ in a 401k is invested, not saved, and that these things are not the same.

    No Obama did not notice this (none / 0) (#58)
    by Militarytracy on Sat Sep 05, 2009 at 05:19:53 PM EST
    And he certainly does have his financial definitions skewed and screwed.

    Indeed (none / 0) (#70)
    by jimakaPPJ on Sat Sep 05, 2009 at 08:05:52 PM EST
    I think it's great that the brokers... (5.00 / 1) (#56)
    by lambert on Sat Sep 05, 2009 at 05:08:25 PM EST
    ... will be getting more commissions from the 401(k)s. They certanl need them.

    Why not turn the banks into regulated public utilities, so we have someplace safe to put our money?

    I was thinking (5.00 / 1) (#62)
    by cawaltz on Sat Sep 05, 2009 at 05:46:47 PM EST
    since the end run seems to be one mega conglomerate "too large to fail" institution anyway(Lord only knows they seem to be encouraging enough mergers), why is it again we aren't nationalizing the system so just about EVERYTHING being made at this point is"returns" on the taxpayer's investment? At least this way when they screw up we wouldn't be on the hook for paying for a fancy separation package for them.

    The elephant (5.00 / 3) (#59)
    by Spamlet on Sat Sep 05, 2009 at 05:20:48 PM EST
    (no convoluted pun intended) in the room is that this entire idea begs a very big question: namely, who is going to be able to retire, ever? I think retirement in the U.S. is an artificial lifestyle that applied to the WWI and WWII generations. Not that I wouldn't like to see more of that artifice, but it does seem that the rest of us are going to be working until we die or fall over and have to stop (which isn't quite the same as retirement).

    Timid and Tepid (5.00 / 2) (#61)
    by ricosuave on Sat Sep 05, 2009 at 05:32:43 PM EST
    I understand that these are merely in the realm of what can be done without legislation, but they don't do much.  How about pushing for some real stuff:
    • Take 401K away from employers.  let any individual open a tax free account with a company like fidelity, and allow them to contribute directly or provide a simple process for employers.  Fidelity is perfectly capable of cutting you off at the maximum, or splitting the amounts into taxable and nontax.
    • Let anyone open a tax-deferred health savings account and contribute an amount equal to or x% larger than their family deductible total.
    • Make a savings plan that non-wealthy people can afford.  Small contributions, no fees, easy access to the money.

    And the most important ways to affect the savings rate:
    • Eliminate federal restrictions on states enforcing usury laws.  If we can legislate recognition of marriage and access to abortion across state lines, surely we can allow the other 48 states to set interest rate caps lower than South Dakota and Delaware.
    • Bring payday loans under control of usury laws
    • Provide universal catastrophic care insurance.  Don't let anyone go bankrupt for medical reasons.  If this is part of universal health care, even better.

    Don't hold your breath, though.

    I like your idea about taking 401k (5.00 / 1) (#64)
    by Militarytracy on Sat Sep 05, 2009 at 05:54:53 PM EST
    away from employers, I always thought it was stupid to allow employers to decide what plans were available to their employees......for those still interested in what a 401k investment could possibly glean of which I am not at this time.  I like your second group of suggestions far better than your first, and the first two  would certainly create a sort of stability for folks out there dealing with the cost of credit issues at the moment.  If it was a fact that none of us could ever go bankrupt for medical reasons that would help enormously as well.  It would be a start to a much more sensible financial reality for everyone and a more solid financial base from which all of us grow from.  None of it is sexy though.  It is sort of boring, like Krugman often says such things should be.

    Your own 401k (5.00 / 2) (#66)
    by ricosuave on Sat Sep 05, 2009 at 06:12:55 PM EST
    One of the few advantages to being self-employed (other than not having to work for a company, that is): the SEP-IRA.  It is basically a self controlled 401K.  It would be easier for employers, provide more freedom for citizens, and be easy and lucrative for a company like Fidelity.

    Like most everything else that is good for those of us with broadband internet access, though, it does nothing to help poor people.  But it still could be a good thing.


    I believe the SEP-IRA requires (none / 0) (#72)
    by TeresaInSnow2 on Sat Sep 05, 2009 at 09:26:25 PM EST
    that the employer contribute to all employees' accounts. So if you hire an employee and they meet pretty small requirements you the employer have to contribute to their SEP-IRA account.  And all employees must have the same contributions. If you can afford to contribute to all employee's SEP accounts, then it works.

    Correct me if I'm wrong.


    Does anyone here pooh-poohing 401K know that (5.00 / 1) (#65)
    by steviez314 on Sat Sep 05, 2009 at 05:59:02 PM EST
    you can put 401K money into money market funds which invest in bank CDs and Treasuries? Or you can buy municipal bond funds?  That it's all not restricted to common stocks?

    Or are you just reacting to Obama talking about saving more the way the right wing is reacting to Obama telling kids to study more?

    Okay (5.00 / 7) (#69)
    by cawaltz on Sat Sep 05, 2009 at 08:01:30 PM EST
    if I am making minimum wage or an unemployed person making about $1600 a month what would you suggest they go without in order to "take advantage" of savings programs? We have an almost 10% unemployment rate, with some areas well above this. The average work week is 33 hours and the average person is underemployed. One in 159 houses are in foreclosure. This plan could be positively brilliant and spot on and it would still be tone deaf because the more immediate problem isn't getting people to save a little extra money but giving them enough money to meet the needs they already have. You do that by addressing jobs, housing, health care, energy costs, etc, etc, not telling them they should save some imaginary money that they would be using to pay bills like the mortgage if they actually had it.

    The return on CDs is dismal (none / 0) (#67)
    by Militarytracy on Sat Sep 05, 2009 at 06:20:15 PM EST
    If you thought you were going to retire in seven years two years ago. After the trashing that everyone has taken, it wouldn't even get someone caught up if they worked an additional ten years and died being a Walmart door greeter.  At this point in my life I'm going to do much better buying some decent foreclosures.  Nothing too fancy...buildings with good bones that will easily rent out to those in a moderate income range.  Keep them up, keep them clean....much better return on my income prospects at this time.

    Anyone planning to retire in 7 years should never (none / 0) (#71)
    by steviez314 on Sat Sep 05, 2009 at 08:27:46 PM EST
    have had much money in stocks.

    The best rule to follow is 100-age % in stocks, rest in bonds and money market funds.

    That would not have hurt as badly.


    Reality (5.00 / 1) (#73)
    by shoephone on Sat Sep 05, 2009 at 10:18:42 PM EST
    Stocks suck, money markets suck, CD's suck. Here are the deposit rates for the best credit union in Washington State (yes, much better than BECU --Boeing Credit Union, and better than any bank).

    So, uh... I guess that leaves us with bonds. I'm terribly excited about my financial future.


    The existing reality isn't going to cut (none / 0) (#74)
    by Militarytracy on Sat Sep 05, 2009 at 11:21:19 PM EST
    it or cover it.  If anything Social Security payout must be increased.  I think Krugman wrote something about it awhile back and of course the budget balance people will not understand why we must do this and will maintain that we can't afford it.  The reality is we can't afford not to.  No more cap on Soc Sec taxation.  Increase in payout amounts and return to a sane retirement age once again.  That is the only way to give the boomers a chance and it is really the only way to preserve their ability to be cocreators in the economy we all have to survive in.  If boomers don't have enough money to be purchasers on any level, they are at best then only takers and drainers within the economy and cannot be an economic multiplier.  It would prevent a certain amount of deflation too. I might as well stand in the mirror and have the conversation with myself though, because that's probably as far as it's going to go.

    What planet are you people living on? (5.00 / 1) (#75)
    by mcl on Sun Sep 06, 2009 at 02:08:26 AM EST
    The delusional fantasy that the average American can pay any money into a retirement plan is right up there with the bizarre hallucination that the average American has enough money to see a doctor, or get hi/r teeth fixed at a dentist.

    Americans don't have money for these kinds of wild luxuries. Maybe you people in the top 20% have that kind of disposable income, but no one else does.

    In America, when your tooth rot in your head, they get infected and you die. In America, when you get sick, you die because you can't afford to go to a doctor and no hospital will let you in the door without insurance. In America, when you get fired, you wind up living in a cardboard box on the street and you die.

    Who is he talking to? (5.00 / 1) (#78)
    by nellieh on Sun Sep 06, 2009 at 11:41:14 AM EST
    Certainly not the 9+% unemployed or those that have run out of benefits and are not among those counted. It is a bogus topic for these times. Get REAL healthcare reform where EVERYBODY has access with LOWER costs and don't become destitute because of medical bills, then maybe talk about savings. Who the F@#k is advising our President? I'm not looking for geniuses, just 'masters of the obvious!'

    Won't help me (none / 0) (#10)
    by Radiowalla on Sat Sep 05, 2009 at 02:23:35 PM EST
    but I've been hearing for so many years about how Americans don't save enough that it seems to me to  be a good idea.  Delayed gratification and long-term goal setting are not our strong suit so perhaps this will instill a little more discipline.

    OMG, if you even attempt to live (5.00 / 2) (#12)
    by Militarytracy on Sat Sep 05, 2009 at 02:28:49 PM EST
    any sort of life of delayed gratification these days you are nothing short of a loser.  I don't talk about money or my spending habits with anyone because there is no social definition for me right now that is even considered "cool".

    Well, I AM a loser (5.00 / 1) (#18)
    by Radiowalla on Sat Sep 05, 2009 at 02:40:50 PM EST
    from way back.  Just ask my kids.

    If you have more kids than I do (none / 0) (#21)
    by Militarytracy on Sat Sep 05, 2009 at 02:46:16 PM EST
    you probably have more votes for being a loser :)  Josh goes pretty easy on me too.  I can talk to him about choosing to splurge on the things in his life that actually provide him joy and contentment but his sister is still all about creating a mythical tower of perceived throwing money away in which to sit upon that will keep her safe from..........I don't know what it keeps her safe from but without it she claims to be in pain of some kind.

    What's safe (5.00 / 4) (#27)
    by cawaltz on Sat Sep 05, 2009 at 02:57:06 PM EST
    when life has you rolling snake eyes and you have to choose between getting medical treatment and going bankrupt?

    Obama was never my favorite but I really didn't think he was THIS politically tone deaf.

    There are about 10% of the population surviving on unemployment(at least), many of them dipping into their savings to do so. I don't think they are going to be receptive about hearing his plans on how he can make it easier for them to save. They'd be more interested in hearing him explain how he is going to create good paying jobs that ENABLE them to save.


    Discipline.... (5.00 / 4) (#15)
    by kdog on Sat Sep 05, 2009 at 02:35:05 PM EST
    lol...I know a lot of us Americans have debts and don't save like we should and all, but Uncle Sam is far worse in the discipline dept...just checked the debt ticker and we're all on the hook for over 38k a piece.

    Maybe Obama should worry about retiring that debt before automatically enrolling us all in a 401k and trying to pawn off savings bonds.


    You (none / 0) (#46)
    by Cream City on Sat Sep 05, 2009 at 03:57:15 PM EST
    are on a roll with your comments today, kdog.:-)

    Your employer may offer a plan. (none / 0) (#47)
    by ChiTownDenny on Sat Sep 05, 2009 at 03:58:36 PM EST
    Many employers not only offer retirement plans but also provide matching funds, up to a limit.  That's free money.  Also, considering your age, investing in stock funds, especially with a company match, is what most advisors suggest.  However, do not put your retirement money in company stock!  Matching funds are usually in company stock and this would leave you with a lack of diversity.
    Hope this helps.

    The game is over....... (none / 0) (#76)
    by NYShooter on Sun Sep 06, 2009 at 05:50:06 AM EST
    The Bankers, and the rest who comprise the top 2-3% have won.

    This temporary "slowdown" in the rate of our freefall into the abyss is just that, temporary. The residential real estate implosion was simply the first leg, the cap igniting the dynamite, if you will. The commercial real estate debacle ahead is being handed the baton. Mortgage payments can't be met, vacancies are through the roof. With the wild over-building of the past few decades, and consumers' incomes declining, it will be generations, if ever, for that market to return.

    At the same time our Government has set into motion National debt with numbers so large, it's almost incomprehensible to us mere mortals. The Con-Man in the White House is trying to sell the snake oil that his "green shoots" will blossom into millions and millions of new, high paying jobs, and before you know it, we'll have a balanced budget and a zero debt.

    I challenge anyone here to tell us, "Where will the jobs come from?"

    What do we have that's better than the rest of the world? Natural resources? No. Manufacturing? No. Better students? No. An enlightened government? Please.

    There will be no recovery. When the crash finally comes to an end sometime in the future, we'll just stay there, flat lined.

    The Oligarchs have won, and Obama, who has always lusted to be allowed entrance into their club, has been the "change" they've lusted for.

    I agree with your analysis (none / 0) (#77)
    by Militarytracy on Sun Sep 06, 2009 at 09:40:50 AM EST
    But since we will all go on from there the only thing Oligarchs won was the booby prize.  They've killed the host.

    Wish it were so (none / 0) (#79)
    by NYShooter on Sun Sep 06, 2009 at 01:11:25 PM EST
    But the "Masters" are not American citizens; America is only the return address of their Corporate Headquarters.

    "They" are Global Citizens. As America lays wasted, their looting finished......., Monaco has a nice ring, or Barcelona; maybe Greece, or the Islands off Thailand, some of the most beautiful, and luxurious in the world.

    No, the waste is left for us; "They" never intended to raise their grandchildren in the sucked out sewer they'll leave behind.


    Collapse of the garrison state (none / 0) (#80)
    by mcl on Sun Sep 06, 2009 at 10:07:07 PM EST
    At the same time our Government has set into motion National debt with numbers so large, it's almost incomprehensible to us mere mortals.

    Not so much. America could easily pay off its entire national debt...if we cut our insane military expenditures by 80% and reformed our demented and dysfunctional medical-industrial complex so that instead of spending 2.2 trillion per year of buying yachts for doctors and ferraris for nurses (an amount estimated to skyrocket to 4.4 trillion dollars per year within a decade), we spent only half as much on medical care. Single-payer national health care, anyone?

    America currently squanders 1.32 trillion dollars per year on a military that is being handily defeated in Afghanistan by teenagers carrying bolt-action rifles. Clearly, America's military is worthless, so we might as well shut it down. Cutting that 1.32 trillion dollars per year by 80% would give us 1.1 trillion dollars per year free to pay down the national debt. Single-payer national health care that ratcheted expenditures down to 1.1 trillion per year would give us another 1.1 trillion dollars per year.

    You know, you can actually make a dent in America's national debt by shoveling 2.2 trillion dollars a year into it.

    The current national debt runs somewhere north of 18 trillion. That means inside 15 years, if we just cut our military back to a reasonable level and set up single-payer national health care, we could pay off America's national debt completely. 100%. Done. Gone. Paid down. Zeroed out.

    Now, you might be talking about America's future entitlement obligations here, which run somewhere north of 78 trillion. However, bear in mind that that's the total sum of America's estimated entitlement obligations over the next 40 years. Notice that with 2.2 trillion dollars per year available, the seemingly mind-boggling sumof 78 trillion dollars melts away quite handily when you dump 2.2 trillion into that hole over the next 40 years.

    So, to put it bluntly, America has no financial problems at all. We're filthy rich. We're awahs in money. America has money squirting out its ass.

    The problem is that America is pissing away all its wealth on a military-industrial-prison complex, broadly defined to include things that no one actually counts, like the CIA and the NSA and the NRO (satellite surveillance) and military pensions, plus a colossally wasteful medical-industrial complex, that serve only to enrich a few members of the top 20% of our society and perpetuate a brutal and increasingly totalitarian garrison state in which civil liberaties are being zeroed out in order to keep feeding the military-industrial monster.

    I challenge anyone here to tell us, "Where will the jobs come from?"

    Prison guards. Torturers. Hospital orderlies. And lots and lots of cops to beat and tase those mobs of people without adequate insurance who try to break through the razor-wire perimeter into the hospitals ringed with armed guards, because their kid is dying but the hospital won't let 'em in the door.

    If you want to see the future, imagine a prison guard's boot stamping on America's face...forever.