07/09: SAVE
Bill Gross, in his monthly investment opinion piece, describes the current dire situation of undersaving in the US. Underfunded pensions, future social security & medicare obligations and other future claims have a current present value that is too large to fathom. Take note he says. See his article at: http://www.allianzinvestors.com/
Imagine saving for your child's future education. Year after year you contribute and ponder investment choices. Then, when junior reaches seventeen you decide that a big raise you will get in the future will pay for this education and you take the savings and go around the world or add a game room/theater, workout room to your current palace.
You no doubt are thinking that no-one in their right mind would do such a thing! Alas, it is happening every day. The US government will spend $200-$300 billion of our savings (read soc Sec Trust fund) this year! And recent years have seen gross tax revenues running at much smaller percentages of GDP thanks to tax cuts.
Yes, we are ignoring future claims as government and as families and as corporations.
How will General Motors meet the claims of its retirees when they operate with 1 current worker for every four or so retirees? Delta Airlines is in the process of defaulting its pension program to US taxpayers.
When will we wake up?
I do not know. Perhaps the freefall of US residential real estate prices will cause us all to sit up and take notice.
Whatever, when we do realize the challenges we must respond at all levels in one way: SAVE!
OSF, September 2006
Imagine saving for your child's future education. Year after year you contribute and ponder investment choices. Then, when junior reaches seventeen you decide that a big raise you will get in the future will pay for this education and you take the savings and go around the world or add a game room/theater, workout room to your current palace.
You no doubt are thinking that no-one in their right mind would do such a thing! Alas, it is happening every day. The US government will spend $200-$300 billion of our savings (read soc Sec Trust fund) this year! And recent years have seen gross tax revenues running at much smaller percentages of GDP thanks to tax cuts.
Yes, we are ignoring future claims as government and as families and as corporations.
How will General Motors meet the claims of its retirees when they operate with 1 current worker for every four or so retirees? Delta Airlines is in the process of defaulting its pension program to US taxpayers.
When will we wake up?
I do not know. Perhaps the freefall of US residential real estate prices will cause us all to sit up and take notice.
Whatever, when we do realize the challenges we must respond at all levels in one way: SAVE!
OSF, September 2006
