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"Paul, I know you are just bring up points so don't take this as a personal attack."

Gee, William. Where have we crossed horns before? I can't find any recent history. (Your CAPs account sure looks super.) Hopefully this does not sound too defensive.

It seems to me that the major problem being addressed is risk. Companies offered pensions when they were inexpensive, but now they have become a costly liability and they especially don't like the idea of major liabilities showing up on the books as "unfunded pensions" when stocks are down. (Too much risk.) They much prefer a defined contribution plan where they control how much they will spend each year on pension costs.

But every time the stock market crashes, many now find their ability to retire reduced. (Again too much risk.)

The trend has been to put more and more responsibility on govt. With govt managed 401K plans you have basis to demand a govt bailout if the markets tank. (Govt takes the risk off the shoulders of the individual.)

Similarly when employers abandoned their pension plans in bankruptcy some years ago, Congress was called on to set up the Pension Guarantee Corporation. Making govt responsible for pensions.

But I think we begin to see the practical limitations of all of this. The recent financial bailouts are close to the limits of what govt can fund. The economy is much bigger than govt. Govt cannot create infinite funds by taxation.

As Iceland seems to be finding out, our benefits, even if govt guaranteed very much depend on the health of the US economy. We have to be productive to pay for the standard of living we enjoy. We all depend on the success of the economy. Without that, not much else matters. The finer points amount to rearranging deck chairs on the Titanic.
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