Savings And Wealth

Articles

Savings And Wealth

By Brooks A. Mick, M.D.
Feb. 22, 2006

Savings are at an all-time low in the USA, now approximating ZERO. This is calculated by taking all income and subtracting taxes and other government expenses, and then subtracting all spending on mortages, food, and other items, and then what is left is disposable income. And we aren't saving any of it, apparently. That sounds bad, and it sounds as if we will all end up in the poor house.

Luckily, though savings are at an all-time low, WEALTH ACCUMULATION for Americans is at an all-time high. That's H I G H! Americans are getting richer now than they have ever been.

I hear you asking: How can that be? I'll explain it.

The savings does not include the appreciation of equities or capital goods or the appreciation of your house or other property. That is, if you bought a house for $200,000 a few years ago and it is now worth $600,000, you are not credited with that extra $400,000 when the government considers "savings." And if you have purchased stocks and they have appreciated, you aren't credited with having "saved" that money either. Yet it will be money that is there, in your account, when you retire.

Your mortgage payments, then, are effectively "savings," but not counted as such.

None of this is to disparage saving money nor to discourage saving money. I'm certain that people are not saving enough. What does discourage saving money, however, is the erroneous idea that Social Security will be enough to retire on, that it is "always going to be there," that it is guaranteed and that the government can't take it away. People have grown to count on it to the point where they consider Social Security their "savings account."

Unfortunately, there is no mandated payout from SoshSec. The government could, quite legally, decide simply to pay at a lower rate, to raise your retirement age, or to refuse to pay you at all because you have accumulated so much wealth that you don't need Social Security. Yes, they could do that.

And President Bush, who wants to create accounts YOU WOULD OWN AND WHICH THE GOVERNMENT COULD NOT TAKE AWAY is characterized by the Democrats as wanting to "mess with Social Security." And the gray-hairs of AARP believe it! They don't realize that it is the Democrats who wish to keep Social Security insecure, without a guarantee, and in their hands and their control and their moneybox, not yours.

So for goodness sake go about accumulating wealth. It's your main hope for real security in your old age. You can't count on the government. But vote for Social Security reform, real reform, meaning PRIVATIZATION, whenever you get a chance.

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About the author Brooks A. Mick: Physician, still practicing medicine but retired from the US Army. Write just for the fun of it, but working on novel in the vein of Tom Clancy's politico-military genre.

Email: brooks15@cox.net

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