Donald Lambro

Longevity continues to rise into the late 70s and beyond. One of the fastest-growing population cohorts today: people 80 years and up. The aging of our population, as the baby-boom generation nears retirement, will present problems of its own, but medical advances and miracle drugs are keeping more of us healthier and active longer than ever before.

And for those who think this nation is growing poorer, the Federal Reserve Board released its "flow of funds" data on Dec. 7 that shows a continuing increase in household wealth that is improving the nation's balance sheet. "Rather than 'running on empty,' it shows a U.S. household sector with assets, with or without houses, increasing much faster than debt," reports chief economist David Malpass at Bear Stearns.

"The data contradicts the negative savings rate assumptions underlying many of the bearish outlooks on the U.S. consumer," he says. "In the third quarter, household net worth rose $776 billion to $54.1 trillion. Financial net worth increased $479 billion to $27.5 trillion, more than the rest of the world combined."

Does this mean that everything is rosy economically? No, not when the median income is at $44,000 a year, meaning half of all American workers earn less than that and half make more. Not when millions of Americans do not have health insurance and are not saving anywhere near enough for their retirement.

Steps are being taken to fix some of these problems. President Bush signed a bill this year under which new employees can be automatically enrolled in company 401(k) savings plans. Other legislation is in the works to offer automatic Individual Retirement Account plans to workers whose employers do not have 401(k) plans.

But the best way to help ordinary income earners create wealth is to let them begin investing part of their Social Security taxes in safe, diversified bond and stock funds.

Many Democrats who fought this idea, saying it was too risky, invest in government pension stock plans because they get a much bigger return on their investment than the 1 or 2 percent from Social Security. Even the AARP, after it killed Bush's plan, promptly went into the mutual-stock-fund business for retirees.

But despite our remaining problems, we have many blessings to count and much to be grateful for in this season of hope and goodwill, with its enduring promise of a better life to come for future generations.


Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.