Despite problems, Americans are blessed

Posted: Dec 23, 2006 12:00 AM

WASHINGTON -- There are many reasons for Americans to be hopeful, optimistic and grateful this Christmas season, reasons too often forgotten or lost among the problems and fears that confront us.

We have always been an optimistic, can-do people through wars and depression, even in the face of terrorism. But in the past year, we've seen the nation's mood turn pessimistic about the direction of our country and its future.

The war in Iraq to defeat the terrorists in their breeding grounds, and thereby make future generations safer, has gone badly: dividing our nation about what to do next. However, we live in a democracy where we settle our differences peacefully at the ballot box, and Americans voted for a new strategy and course of action in that conflict.

This is what the Bush administration has set out to do -- not in haste but in a methodical, careful analysis of our options and a plan that will achieve our objectives of preserving a democracy still in its infancy for which so many brave Americans, and Iraqis, gave their lives.

We are a smart people, with dedicated political and military leaders, and I do not have the slightest doubt we can figure this one out in a way that a majority of Americans can support.

The world, especially in the Middle East, seems at times to be in chaos, but this perception is spawned to a large degree by a 24/7, instantaneous global news system that reports all of the world's ills and screens out all of its progress and successes.

The global economy's expansion is one of the free market's greatest achievements, lifting once-impoverished nations to a much higher level of prosperity. China, India, Eastern Europe and much of Latin America are all on fast-growth tracks that are benefiting millions of people.

The continent of Europe, long held back by a still burdensome welfare state and taxation, is slowly but surely putting itself on a growth track that has made it one of the strongest investment regions in the world.

The Pacific Rim and Southeast Asia brims with economic energy and growth as well. The best evidence of this can be seen in the Euro-Pacific growth funds that have delivered double-digit returns for investors.

Here at home, with all of our problems, we are still achieving a level of economic prosperity and human advancement that remains unparalleled in the world.

More people are employed than at any time in American history, more than 150 million of us. Unemployment remains in the low 4 percent range, unmatched in the industrialized world. We seem obsessed by a temporary downturn in housing sales, but long-term homeownership is at nearly 70 percent and climbing.

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.