Constructive gadfly
Published on March 9, 2005 By stevendedalus In Business

In early childhood all of us were taught to save for a rainy day: save up your pennies to get that baseball glove or hoop you always wanted. Later we were told to save those dollars earned working part time to get your first jalopy, plus enough for auto insurance. Before you could blink an eye you were contributing to your parents savings that would send you to college. When you married, savings were for a down payment on a house and education for your children.

The point is “savings” is for future liquidation through consumption. You also soon learned that savings were never enough and you had to borrow in order to further consume whether for noble purposes or for that HD-ready widescreen. The brilliance of the American economy is relentless consumption; otherwise the semblance of affluence would not exist.

True savings belong to the wealthy who are blest with the monetary cushion of consumption that cannot possibly come close to the wealth accrued and thus are able to invest the excess, which makes consumption possible for the rest of us, and simultaneously brings them further wealth. In short, the affluent save for many rainy days far into succeeding generations.

That is why personal accounts generated by a portion of payroll tax is a bad idea because it will be taken full advantage by those who already sit on the cushion of wealth from investments. To tell the little guy that he too can invest and therefore live in fat retirement and even pass the proceeds onto his progeny is an illusion; for he will always be caught up in the pit of consumption and thus will continue to his grave contributing to the great American way.

   

Copyright © 2005 Richard R. Kennedy All rights reserved. Revised: March 9, 2005.

http://stevendedalus.joeuser.com


Comments
on Mar 09, 2005
Good article but I think savings via a vehicle like a 401K or TSP (where you can't easily roll your savings out for consumption) far outstrip the benefits of Social Security accounts. I just wish I had started my TSP ten years earlier than I did!
on Mar 09, 2005
Greywar you scare me, your posting was pretty much what I was thinking while reading this.

Steven, I see what you mean here, but the basic fact is, almost every worker with any kind of benefits already invests for the future. Unless you consider all of those programs abject failures, they pretty much contradict your article.
on Mar 29, 2005
Still a matter of frugality and moxie--some of us don't have it, let alone the money. Moreover, SS is still a safety net designed for more than retirement to cover golf fees.