Whaddaya mean "Generation Risk"? (And am I in it?)
Welcome to Money's new blog on money and politics. It's best to start, I think, with a word of explanation about the slightly grandiose title we've chosen for it.

When my editors at Money magazine asked me to do a political blog, the first question I had to ask myself was, "What does a reporter from Money bring to this discussion?" We're not a political magazine, and there's a whole range of important economic issues that obsess Washington, but about which I have nothing special to say. You won't be reading about telecom legislation, accounting standards or patent law here.

What we do know at Money? Middle-class pocketbook issues: Health insurance, retirement, college savings, retirement, taxes, jobs, money management, and retirement. (Did I mention retirement?) And over the past several years, we've noticed something: This stuff is getting harder to manage. The results aren't necessarily worse. But it is undeniably a lot more complicated.

Take--ahem--retirement. Are traditional pensions better than 401(k)s? Well, not if you worked for United Airlines. But if you've ever sat down with your company's 401(k) plan booklet and puzzled over which of 30 different mutual funds you should entrust with your retirement, you've probably had this thought: "I could really, profoundly, and spectacularly mess this up." In other words, the risk is on you, not your employer. You not only have to live with this risk; you have to learn how to manage it.

You're in Generation Risk if you've ever wished that someone could help you pick the right funds for your retirement. You're in it if you wonder whether you should save even more because Social Security and Medicare benefits might not be there for you. You're in it if you've been watching your co-insurance payments go up while your health-care choices seem to dwindle. You're in it if you worry that your kids won't be able to go to your local state university without piling on huge debts.

Some decisions made in Washington may leave you exposed to more risk than you can handle. Others might protect you from risk, but at the expense of shutting off far better opportunities. In between, there are lots of interesting policy ideas, from both sides of liberal/conservative divide, which could help make the new risks more manageable. (I've written about some of those ideas here and here.) This blog will cover all of the above.

And it's a great time to kick it off. In the coming year, expect the debate about risk to get louder. The Democrats have won Congress, and they're buzzing about "The Great Risk Shift" , an important new book by political scientist Jacob Hacker that argues that ordinary Americans are very much worse off thanks to the rise of risk. (More on Hacker in a coming post.) Republicans, meanwhile, must be thinking hard again about how to make the flip side of risk--opportunity--more visible in their policies. Here's an excellent start, written before the election, from the Weekly Standard. We'll have lots to talk about.
Posted by Pat Regnier 12:18 PM 6 Comments comment | Add a Comment

With the US embroiled in this mess called Iraq, our financial stability will be further threatened. Due to continued escalating costs associated with this "war", our deepening budget deficit causing inflation to peek around the disaster corner is the real threat to our "boomers and beyond" crowd. The Us is not ever going to leave Iraq. Just look at the 104 acre, 21 buildings Baghdad Embassy almost completed. Do you honestly believe the Us would leave this Vatican sized facility after having spent 1 billion dollars building it, not to mention all the deaths associated with this MISTAKE.
Look at this website for yourself and make up your own mind about where we are and where we're going in regards to Iraq: www,commondreams.org/headlines06/0415-07.htm
The next group of boomers will be also at risk if we continue to pursue this course of action in Iraq.
Posted By John Medici of Longwood, Florida : 12:14 PM  

Thanks for the political rhetoric. No seriously. What a tool.
Posted By Sean, SF, CA : 7:33 PM  

if this blog is related to middle-class pocketbook issues it's not going to last long, as the middle class is a dying breed. haven't you noticed that the rich are getting richer and the poor are getting poorer. the only middle class left are wannabees and they're headed for disaster and the working poor class because they're trying to pretend to be upper middle class (or rich) and saddling themselves with incredible amounts of debt in order to keep the facade going. higher paying jobs are not the answer as this only makes the rich richer. mutliple income streams are the answer and more and more are starting to recognize this fact. not sure if this fits into your discussion but it should be considered as a part of it.
Posted By mary b, pittsburgh, pa : 12:44 PM  

To the gentleman posting a tirade on Iraq, I'd like him to check a history book or any reputable source before writing anything ever again. He would find that every conflict in our history has had little to no effect on the retirement of it's citizens. Check Vietnam, a 16-year conflict, either world war or the cold war, a 45-year drain on federal resources. The Iraq war, while certainly a mistake (I and 2 other family members were there) is not the grand threat to retirement that it is made out to be. What is a threat however, is the lack of a culture of saving (what percentage of baby boomers have insufficient funds for retirement?). Generations of us have either placed material desires ahead of common sense, or life has just never given us the opportunity to save adequately. Changes in the world demand sacrifice from those who undergo them and we find ourselves in a different environment than decades ago. The first step towards dealing with this is to actually learn something before we unleash the usual liberal or equally-ridiculous conservative retoric we're used to saying. After that try saving money, using any of the multiple methods mentioned here among other places to prepare. Ultimately just deal with reality and lower your expectations. This world has changed and those who work and adjust will fare far better than those who spout political drivel.
Posted By Carl K, Portsmouth RI : 7:37 PM  

I think the only middle class left will be government employees, with pensions and health care that the rest of us can only dream about. When will all politicians cut these down?
Posted By Kelly G, White Plains, NY : 12:31 AM  

To the gentleman from Portsmouth...I suggest that you check your history books and reputable sources. Anyone who believes that the cold war and the Vietnam war did not negatively affect the American standard of living has not been paying attention. Both those conflicts soaked up trillions of dollars that could have been spent on things like education, infrastructure, and paying down the national debt. Just a little research on the internet will show you that there is an very high inverse correlation between a country's standard of living and percentage of national income spent on the military. The more a developed country spends on the military, the lower their comparative standard of living.
Posted By Dave H, Hastings, MN : 7:35 PM  

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