BusinessWeek really has some credibility problems with those in the business community (here's Part 1 of Biased Businessweek). Many of the university professors that I talk to laugh whenever I mention an article in BusinessWeek. The following article from Laura D'Andrea Tyson is just an example.
Retirement Savings: A Boost For The Needy
Government matching would give IRAs a shot in the arm
There is a mounting retirement savings crisis in America. Too many middle- and low-income Americans are saving too little. The plunge in the U.S. household savings rate over the past decade has occurred just as baby boomers should be saving in earnest for their looming retirement. Even worse, personal savings have dipped just as employers have dropped defined-benefit pension plans in favor of defined-contribution plans -- shifting both the responsibility and investment risks of retirement savings onto workers. The good news is that there are some relatively simple and inexpensive policies that could ease this crunch.
Two recent studies from the Retirement Security Project, a joint venture between the Brookings Institution and Georgetown University, demonstrate that savings plans that combine accessible information with ease of use and modest financial incentives can boost retirement savings -- even among middle- and low-income households.
For households on the verge of retirement -- those headed by someone between 55 and 59 -- the median value of savings held in both individual IRA accounts and employer 401(k) plans is a meager $10,000. Despite both tax advantages and matching contributions by employers, only about half of American workers participate in 401(k) and other employer-based retirement savings plans.
I read through the article 3 times and kept thinking to myself... "wait, something's missing here!!!"
Here are two things that were left out:
- Not one mention of Personal Retirement Accounts as an option to improve the retirement savings rates for the poorest workers. The current Social Security tax is the most regressive tax on poor workers and a PRA would provide them with significantly higher returns - and Bush' proposal to index future benefits based on need would give them an even greater boost
- No mention of Laura D'Andrea Tyson's previous role as chairperson of the Council of Economic Advisors in the Clinton Administration
Oh, and no mention that Laura had a previous BW article that was critical of Social Security reform. One month, she's arguing that people shouldn't get a better return on investment than what social security will provide, -2% for me (YEAH!); the next month she's bitching that the poor and middle class aren't getting a better rate of return and recommend investing in mutual funds (ie the stock market).
yeah, that's what passes for logic on the Left. Amazed that she's the dean of a business school. Sociology dept? Sure... business school? Ummm, I;d want my money back.
ARC: St Wendeler