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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (54481)	6/17/2000 4:43:00 PM
From: Les H	Read Replies (2) \| Respond to of 99985

I got your piles of cash on the sidelines right here: Gersh on Washington 6-9-00: ZERO BALANCE a special web column by NBR Washington Bureau Chief Darren Gersh (Read his previous articles) I believe in the new economy, but sometimes I think I believe too much. It is tempting to think that everyone is going dot com. The economic times are as good as they get. And, I want to believe that everyone is getting while the getting is good. But many of us are not doing as well as we should be, and the clearest indication of that is the lack of savings by almost half the population. Even though economic times have never been better, 44% of American families report they are not saving. The leading edge of the baby boom is heading into retirement, and half of those families age 55 to 65 have piled up less than $45,000 in financial assets. Keep in mind those savings must sustain 20 to 25 years of retirement. In a series of stories this week I will examine why Americans aren't saving and what can be done about it. This special series, called "Zero Balance," begins Tuesday, June 13 and continues through Thursday. I'll talk to Treasury Secretary Lawrence Summers, and leading economists, and examine surprisingly simple solutions to solve the problem. To be sure, all is not doom and gloom. As a nation, we are wealthier than we have ever been. Homes are soaring in value, and the stock market is doing much of our saving for us. Because official statistics don?t count our stock market wealth, our savings seem lower than they really are. But in important ways our rising wealth obscures the larger issue. Stock holdings are heavily concentrated in the hands of upper income families that save anyway. The real savings problem is for middle and moderate income Americans. Half the population doesn't have access to a pension plan or a 401(k). For those who do have a 401(k) account, the typical balance is now just $8,000. No wonder economists say the booming stock market is irrelevant to two-thirds of the population. Clearly more needs to be done to make sure middle and lower income workers are building up the assets they need for the future. There are signs the nation is about to get serious about saving. Both Al Gore and George W. Bush are pushing plans to boost savings -- either through private social security accounts in Bush's case, or Universal Savings Accounts in Gore's. Companies are exploring creative ways to increase participation in 401(k) plans. The Consumer Federation of America is testing what it hopes will become a national campaign to change our buy and borrow culture to a savings culture. The consequences are real. As a nation we now borrow close to 4% of our GDP from abroad every year. That's over $300 billion dollars a year. Clearly this can't last forever, and as the old saying goes, "things that can't last forever, stop." We face a simple choice as a nation. If we don't save enough now, we will be poorer in the future.