The problem with 401K plans

Dan Solin warns us of the huge problems involving 401K plans:

Here is the harsh reality: 401(k) plans are a false crutch for employees. They simply don't work, if you define "work" as providing funds that will permit retirement with dignity -- if at all. According to Fidelity Investments, average balances in 401(k) plans as of March 31, 2011 were $74,900. Those 55 and older had saved $233,800 on average. Given increased life expectancy, it is understandable that another study found that 61 percent of those surveyed said they were more scared of outliving their assets than they were of dying.

I have just finished reading Solin's new book, The Smartest Portfolio You'll Ever Own: A Do-It-Yourself Breakthrough Strategy. Lots of intriguing numbers that run counter to much of the hype you hear from "financial advisers" on TV. Most important part of his book is the Solin gives you the recipe for assembling your own portfolio based on passively managed funds with low fees. He is one of the relatively few well-known financial advisers who steers you wide of brokers who claim that they can pick stocks. Solin essentially calls these people frauds, based upon decades of numbers.

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Making banks pay for their secret $7 trillion free ride

Eliot Spitzer offers "5 Ways to Make Banks Pay for Their Secret $7 Trillion Free Ride." Here's the problem:

During the deepest, darkest period of the financial cataclysm, the CEOs of major banks maintained in statements to the public, to the market at large, and to their own shareholders that the banks were in good financial shape, didn’t want to take TARP funds, and that the regulatory framework governing our banking system should not be altered. Trust us, they said. Yet, unknown to the public and the Congress, these same banks had been borrowing massive amounts from the government to remain afloat. The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone—without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending.

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How to create money out of nothing

Dennis Kucinich explains how the Federal Reserve created 7.7 TRILLION out of nothing, allowing many big banks to profit while starving ordinary Americans of capital. This is a dramatic illustration of why there are Occupy protests. Kucinich is promoting the "Need Act "to reign in the Fed: "to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States, retire public debt and reduce the cost of public investment, and for other public purposes." Here's a more detailed description of the proposed "Need Act." It attempts to accomplish the following: 􀂾 Puts the Federal Reserve (Fed) into the Department of Treasury (Treasury) to make our monetary policy truly accountable to Congress and the American people. 􀂾 Ends the banks’ special privilege by no longer allowing them to create our money supply when they make loans, through a simple and non-disruptive accounting change. 􀂾 Invests money to renew our crumbling infrastructure, making it fit for the 21st Century; creating real wealth and millions of good jobs at the same time.

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Mark your calendars for the Anti-Fourth-of-July

Mark your calendars for The Fourth-of-January, the antipode of The Fourth-of-July. The Fourth-of-January will be a new national date of remembrance.  This new occasion will be about the United States of America, but there won't be any fireworks and it's not going to be a happy occasion. In fact, as happy as the Fourth-of-July is, the Fourth-of-January will be the diametric opposite. Citizens will somberly recognize the Fourth-of-January by gathering together to watch mock funerals wind through their city centers, where they will mourn the death of democracy. An American flag will be placed prominently on the hearse, serving as a symbol of the deceased. On the Fourth-of-January, American citizens will actually bury these American Flags to recognize the fact that ordinary citizens of the United States have no  meaningful input in how their federal government is run. At the destination of the funeral procession, citizens will carve these words onto the tombs:

Here lies Old Glory, destroyed by Citizens United and by the unwillingness politicians to pass a Constitutional Amendment and enabling laws to remove private money from the American political system.

The Fourth-of-January will be a day when people consciously refrain from reading The United States Constitution, lest they become deluded that federal politicians are public servants of ordinary citizens.  It will be a day when, instead, mourners read proclamations that the existence of vast amounts of money in the political system has made it impossible to meaningfully debate even the simplest of political issues. It will be a day when Americans recognize that big corporate money has turned America's politicians into  psychopaths.  It will be a day when Americans remind themselves that their every year their politicians spend more tax dollars to air-condition soldiers' tents in the Middle East than they allocate for the total budget of NASA, to explore the mysteries of outer space. The Fourth-of-January will be a date when Americans consider  renaming of all of their major holidays based on fact that quest for corporate profits now dominate all celebrations, and that America's news media celebrates this fact. On the Fourth-of-January, Americans will recognize that, contrary to the will of the People, America has become unstoppably addicted to warmongering, and that it has become a nation that doesn't treasure safe food, medicine, chemicals, air and water.  It has become a nation that allows big banks, fossil fuel companies, telecoms and insurance companies to write national laws that cause massive financial damages to the People. On this new Day of Remembrance, Americans will pause for a moment of silence to recognize the brutalizing and almost unstoppable financial and political power of America's corporate-military-prison-industrial-Complex. The Fourth-of-January will recognize that laws passed contrary to the wishes of the majority of citizens have resulted in sub-standard schools, catastrophic national debt, state sponsored torture, spying on citizens, governmental secrecy and abuses inflicted on citizens and journalists who are attempting to exercise their Constitutional rights.  On the Fourth-of-January Americans will recognize that their highest court has become deaf to the needs of the People, and that the "rule of law" is rapidly becoming available only to those of significant financial means. The Fourth-of-January is a day when we warn our grade school children that much of what they are reading in their American civics textbooks is stunningly false. The Fourth-of-January will be celebrated every year unless and until the corrupting force of private money is removed from the American political system. -- [Photo credits:  Derivative work funeral photo by Erich Vieth, incorporating flag photo by Tarajane at Dreamstime.com (with permission) and Original funeral photo, which is a public domain work.  Corporate flags photo by Erich Vieth, photo taken at the 2011 downtown St. Louis Fourth of July celebration].

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