A New Idea for President Obama

Like many people my age, for years I have scrimped in order to put away as much as I could in whatever IRA or 401(k) my employer offered. This past year was no different. For most of the time I was employed, I diverted 5% of my salary every month to the company retirement plan. (I stopped when I realized that I was losing money, dramatically, by doing so.)

By the end of the year, I added up my retirement accounts, like I always do, to discover a horrifying fact: My various accounts had cumulatively lost 50% of their value. Now these were not marginal funds. I chose mainstream mutual funds for my money. I read their prospectuses, I checked their ratings on Morningstar, I read their propaganda, including the fine print.

I thought I had chosen wisely. Until recently, I used to email my older kids about the main fund, which I try to manage myself, through Schwab. As for the risk/gain ratio, I chose medium to low risk over and over. But now, I would be humiliated to share with them what has happened to my account. In short, it is less than what I originally started with!

So, what went wrong? Why now, as I add up the damage, is my retirement fund only worth half of what it was on December 31, 2007?

Of course, I know I am not alone. Many, many people have experienced a similar fate. So, my personal idea for the new President is very simple...take a snapshot of every American's retirement account as of 12/31/07 and compare it with 12/31/08. If the person withdrew funds, reduce the "at risk" total accordingly.

Then, make a very simple gesture. Simply reimburse these savers for their losses. You can create a cap on this benefit; perhaps only reimburse those of us who are "small investors," at whatever definition seems appropriate. Given other programs that have been discussed, this benefit might only apply to the first $250,000 in any individual's retirement accounts.

To be explicit, if I had been able to save $250,000 through the end of '07 and it now was worth only $125,000, I would get a check for $125,000 that could only be used to rebuild my retirement accounts.

This program should probably be available only for older Americans -- perhaps those 50 and older. Why? Because younger people should have enough time for the market to rebuild their losses. In any event, it's a long time before they will need to tap into their retirement funds, hopefully, unlike those of us who were born in the '40s or '50s.

Our crisis is now. I doubt this proposal would amount to very much cash, in the overall scheme of things. Perhaps some economist somewhere could calculate the total. Plus, it is a highly selective idea; not everyone would benefit, not any of the neediest among us.

But I trust other stimulus packages will be devoted to the working poor. My concern tonight is the aging working middle class. This past year has destroyed our faith in the American economic model. We are the people who, rather than using plastic to go deeply into debt, tried to live within our means and set aside anything non-essential for the future, when we could no longer be as economically productive.

This may not be the demographic that is the new President's top priority, but it is one that deserves a "bailout" at least as much as GM, Citibank, or Freddie Mac.

Otherwise, all too soon, we will be joining the poor, swelling their ranks, even though for all of our adult lives we have been middle class people, consuming and keeping our economy strong. Now it is not economy that is vulnerable, because it will rebound, but those of us who have built it.

We are older. We are tired. We are disheartened. We still have lots to give. As for me, if I hadn't lost so much of my savings, now that I am once again unemployed. teaching might be a possibility. I am a good teacher, very experienced and motivated.

But given how much my future security has shrunk, I cannot even consider such a low-paid option. There are many like me.

Think about it.