Americans Lose Billions in 401k and 529 Meltdowns – Guess Who Won

I think I’m beginning to see a trend here, one cow said to the other. Have you noticed that whenever any our friends go into that red building over there that they never come out again? I think I figured out why: I don’t think the farmer is entirely on our side…

How many people would rather not look at their 401k statement these days? Most probably. We’ve heard a lot about the economic meltdown, the collapse of the stock market, and the resulting devastation of the average American’s 401k. For people who are close to retirement the loss of 40-50% of the value of their 401k is devastating news and means that many will not be able to retire.  Many of those who have recently retired are now wondering if they will have to go back to work and if there is any work available for them.

We haven’t heard much about the devastation of people’s 529 funds. These funds are similar to 401k plans in that they encourage people to put money into them that will then be invested in the stock market. 529 plans are intended to be used as a way to save money for children’s college tuition expenses. Last year Congress passed legislation making these plans even more attractive by making 529 contributions and the earnings exempt from income tax.  People poured money into these plans hoping to thereby have enough money to send their kids to college.  Now their 529 plans are pretty much in ruins, just like their 401k plans.

Our Republican President and Republican members of Congress have repeatedly tried to alter the present Social Security System of guaranteed government pensions to one where people would invest their Social Security contributions in the stock market, just like the 401k and 529 plans.  Imagine the devastation that such a modification would have had for our nation’s retirees, especially those who depend completely on their Social Security check for all of their expenses.  Taken collectively, these actions and proposed actions by our government might seem only stupid or irrationally exuberant – as Alan Greenspan might say. Maybe they were just dangerously optimistic. There is however another way of looking at it.

It is my contention that the ultra wealthy class of America – the top 5% of the population who are overwhelmingly Republican – and who control our present government, feel no sense of responsibility for the average American. Rather, like the farmer, they look at us as sheep to be shorn or cattle to be led to slaughter.  So it is that they make new laws and entice us into the trap of investing in their businesses, knowing that the stock market is anything but a sure thing and is the last place you should put money that you know you will need in the future.  These wealthy students of Machiavelli look at the general population as a source of money for them – period. And they use the power of government to enable their schemes to lure innocent, untrained, trusting citizens to put their hard-earned dollars into stock that will inevitably fail – but not before the ultra-wealthy sell off their own shares. Don’t worry about them- most of them (except maybe the incredibly greedy financial guys) know when to sell.

Now our government is using billions of taxpayer dollars to bail out the banks and insurance companies that are owned by the wealthy, and to make loans to businesses.  It just goes on and on.  Come to think of it, calling the current Republican-led government Machiavellian would probably be an insult to Machiavelli.  These people are in a league of their own.