Pete Stark: “most Americans living today were born well after the Great Depression. They are not marked by the fear of economic loss…”

“most Americans living today were born well after the Great Depression. They are not marked by the fear of economic loss because--as a society--they have not experienced it. It may well be that those who have not lived through the Depression do not appreciate the need for a social safety net. Today's adults almost assume that a good economy will last forever. In such a climate, more people may be less appreciative of safety nets, like Social Security, and more convinced that self-reliance will suffice. But economic self-reliance is only workable for those who are reasonably well off and who understand the value of savings. Nobel prize winning economist Modigliani, my economics professor at Massachusetts Institute of Technology, taught me this lesson: people save only when they have money to save and perceive the need to save. With our national savings rate at an all time low of 3.8% of disposable income. I cannot help but conclude that Americans today do not perceive the need to save for the future. Self-reliance also assumes a certain level of sophistication to ensure that invested savings will grow. That requires knowledge about how to balance investment opportunities and risks. Americans have a ways to go in this regard as well. Social Security was never intended to meet all the requirement needs of Americans. The three-legged stool of secure retirement also requires worker pensions and private savings. We have a voluntary, employment-based pension system.…”