EagleTribune.com, North Andover, MA

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January 20, 2013

Column:With such perverse incentives, why not spend savings today?

There was a clear undercurrent of alarm this past week in a Washington Post story reporting that more than a quarter of American workers with 401(k) and other retirement savings accounts are using them to pay for current expenses.

This is draining nearly a quarter of the $293 billion deposited into those accounts every year. Matt Fellowes, a former researcher for the liberal-leaning Brookings Institution and now chief executive of the financial advisory firm HelloWallet, told the Post that employers who match their workers’ contributions, “are dramatically overpaying for retirement, but it is not benefitting the employee.”

To which I wonder, why is anybody, especially the left-leaning Post and other liberals, surprised?

I agree that, back in those long-ago days when personal responsibility was considered important, this would have been seen as a very big problem. But now? The ones raiding their retirement accounts are the smart ones. You can count the ways.

First, why shouldn’t they spend it? At least they’re spending, or borrowing against, money they actually have, unlike our benevolent federal government, which is spending trillions that it doesn’t have – borrowing it from China and leaving crippling debt for the coming generations to clean up.

Time and again in his first term, and now going into his second, President Obama has declared that true fiscal responsibility lies basically in just getting a bigger limit on your credit card.

His recent self-righteous declarations on raising the debt ceiling (which he spoke and voted against as a senator) are just the latest absurdity. Obama slams Republicans for resisting raising the debt ceiling, saying that the U.S. has always been a nation that pays its bills.

That’s worth a Saturday Night Live skit – which will never happen since SNL wouldn’t consider mocking a president not named Bush. And even if they did so, no matter how SNL framed it, they would be accused of using “racist dog whistles.”

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