Millions of Americans trying to retire today feel like Bob Cratchit, toiling away in Scrooge & Marley’s counting house, but unable to get ahead.
New research explains why: The modern-day Scrooge of Bidenomics has reduced the real value of the average 401(k) by a quarter in the last two and a half years.
The study, published with the Committee to Unleash Prosperity, examined individual retirement accounts (IRAs) and pension plans and found shocking losses under the Biden administration, enough to delay many Americans’ retirement plans for years.
How this happened is a painful lesson in government overspending and overregulating, the hallmarks of Bidenomics.
Immediately upon taking office, the Biden administration and their big-spender allies in Congress ran up multitrillion-dollar tabs with no way to pay, so the Federal Reserve just created the money to finance it all.
That sparked 40-year-high inflation, which was followed by the fastest interest rate hikes in just as long.
This severely hampered equities but completely devastated bond markets, delivering a one-two punch to people’s retirement accounts.
In 2022, one of only a few years on record when both equities and bonds both had negative average returns, the bond market had its worst year since at least 1928.
These violent gyrations from government crowding out the private sector, along with oppressive regulations, helped drive down the average 401(k) plan by almost 13%, about $17,000, in the first two years of the Biden administration.
Across all plans, the net losses are an eye-watering $1 trillion.
But it gets worse.
The stratospheric inflation, brought on by government spending, borrowing, and printing too much money, has further eroded the value of 401(k) plans by $16,200 on average, for a real (inflation-adjusted) loss of around $33,200, or 24.8%.
While the study estimates that pension plans have fared better than many IRAs, their balances have also fallen in real terms.
Through the third quarter of this year, pension plans have lost $3.3 trillion, or 12.1%, of real value during the Biden administration.
For the teacher, operating engineer, electrician or firefighter who is depending on their pensions being there when they retire, this is extremely troubling news.
By E. J. Antoni
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