May 13, 2016

BERNIE UNDERSTANDS ECONOMICS BETTER:

Donald Trump is now threatening the 401(k)s of ordinary Americans (BRETT ARENDS, 5/13/16, Marketwatch)

[W]hen Donald Trump monkeys with the U.S. government debt, as he has in two interviews in the past few days, this isn't just a matter of abstract economics or of sticking it to foreigners.

It's about threatening to take your personal 401(k) out into the back yard and beat it like, as they say, "a rented mule."

According to official data, we collectively own about $2.6 trillion in Treasury bonds directly or through mutual funds. Our pension plans own another $2.2 trillion. And our insurance policies, such as the life insurance contracts that will pay out if we fall under a bus, are backed by another $300 billion in Treasurys.

According to the Investment Company Institute, a mutual fund industry trade group, the average 401(k) plan is about 25% invested in bonds, both through bond funds themselves and through "balanced" funds. (Balanced funds are typically 60% stocks, 40% bonds).

The older you are, the more you are likely to have in bonds. For "safety."

Posted by at May 13, 2016 6:46 PM

  

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