The good, the bad and the ugly

Nelson Graves
Published: October 1, 2008

As a joke, about 30 years ago, I said to co-workers that Social Security should be paid to everyone when they turn 18 and stop when they reached 30. I added that everyone could then find jobs and work until they died.

Well, it seems my joke may have become the reality. After what the president and congressional leaders agreed to do Sunday night but failed to do the next day, when the House rejected the $700-billion Wall Street lifeline, it doesn’t look as though many close to receiving a Social Security check will do so anytime soon. Since most folks are living longer anyway, Congress may want to extend the entitlement age to 75.

We’re in this crisis because some greedy Wall Street companies and mega-national banks and leaders at both destroyed, or at minimum weakened, workers’ 401(k) investments. All blame can’t be leveled just at them, however. They were aided by the lack of due diligence on the part of our protectors – congressional oversight committees and applicable federal agencies. Neither may we excuse borrowers who bought homes they couldn’t afford.

While most working and retired Americans don’t like the bailout, it will have to be done, in some form or fashion. The failed bailout may be summed up and described with the title of the Clint Eastwood movie, “The Good, The Bad and The Ugly.”

I’ll tackle those attributes in reverse.

The Ugly: American taxpayers will bail out (regardless of the spin House Speaker Nancy Pelosi puts on the deal) big American investment companies, their leaders and investors. (It should be noted that I don’t mean investment fund groups such as municipal retirement ones, but speculator types.) I’m referring to those large companies whose greedy administrations took advantage of gullible borrowers.

The Bad: The situation the retired and those who are near it find themselves in. Additionally, folks who were about to buy homes and autos, parents and their children who need student loans and small businesses needing short-term loans are in limbo. And if money is frozen, neither people on commission nor their employers can make sales.

The Good: Believe it or not, it exists. All the experts say Americans in general live beyond their means. Neither individuals nor any institution is immune from the economic crisis we’re facing. For those unable to rein in their credit on their own, financial institutions will do it for them. Prices for goods may drop. OPEC and oil speculators will notice Americans aren’t driving as much. Home prices will also continue to drop (there will be bargains to be had).

Two final thoughts:

First, those who planned to retire will work longer and will pay even more into the system, further delaying the drawdown on Social Security.

Second, also adding more funds to the system, many people who could be working but aren’t must now get off their duffs and do so. With the budget tightening that’s sure to come and only those most in need will get assistance.

Nelson Graves, Western Virginia director of the Virginia Minority Supplier Development Council, writes a weekly column for The News Virginian. E-mail him at .