AARP Slams Congress for Failure on Recover Bill,
Lists Ten Ways it Hurts Americans
Country ‘grows weary and weakened with every hour
and every day that Congress refuses to take action toward protecting
home values, retirement dreams and younger generation's opportunities’
Sept. 30, 2008 – AARP released a list of ten ways
that the “lack of bipartisanship and decisive action in Congress”
yesterday will impact individuals in the U.S., along with a statement
from Bill Novelli, CEO, critical of the government’s failure to pass the
bill to address the collapse of financial markets in the U.S.
"Yesterday, Americans could only watch as the Dow
plummeted 778 points,” said the statement from Novelli.
“It plummeted because Congress failed to come
together in a bipartisan manner to offer a solution to American
families. Our country grows weary and weakened with every hour and every
day that Congress refuses to take action toward protecting home values,
retirement dreams and younger generation's opportunities.”
He said that "AARP has assessed the cost of
Congress' inaction and we've found at least ten ways this will cripple
the American dream we are all working so hard to achieve. Congress must
act. Now."
The Cost of Inaction: Ten Ways
It Impacts You
Layoffs and Increased Unemployment
● Doing nothing means that as our credit system
freezes up and Main Street businesses are no longer able to obtain
financing for routine operations, business activity will slow and many
companies may be forced to lay off workers.
● The number of Americans without a job
continues to rise at an alarming rate and those who are unemployed are
finding it more and more difficult to find a job, particularly those
50+.
Long-term Unemployed and Average
Duration of Unemployment by Age, August 2008
Age
% Unemployed 27+ Weeks
Average Duration of Unemployment
25-54
22.9%
19.3 weeks
55+
23.5%
21.4 weeks
Source: U.S. Bureau of Labor Statistics,
Table A-36.
● Over the past 12 months, the number of
unemployed persons has increased by 2.2 million and the unemployment
rate has risen by 1.4 percentage points, with most of the increase
occurring over the past 4 months.
● In August, the number of long-term unemployed
(those jobless for 27 weeks or more) rose by 163,000 to 1.8 million, an
increase of 589,000 over the past 12 months. The newly unemployed --
those who were jobless fewer than 5 weeks -- increased by 400,000 over
the month.
Loss of Consumer Credit
● Doing nothing means that as credit markets
tighten, the availability of consumer credit for items like homes, cars,
appliances and other purchases will be severely curtailed. It will also
dry up access to student loans, putting college out of reach for
countless hard working students. This will contribute to and accelerate
the current slow down in our overall economy.
Student Loans
● According to the College Board, undergraduate
students borrowed $14.5 billion in private loans during the 2006 - 2007
school year.
● The downturn has forced many student loan
companies to cease lending. In a typical year, one bank may stop lending
- since August 2007, 33 banks have done so. Because of this, banks have
been forced to re-evaluate their lending terms - making it harder for
students to get a private loan by requiring higher credit scores and
co-borrowers. It has been projected that these tighter requirements may
exclude up to 20% of borrowers who were previously eligible.
Loss of Value and Increased Threats to the
Safety of Retirement Savings
● Doing nothing will perpetuate the current
uncertainty in the financial markets, encourage risky and speculative
activities, and lead to additional losses in value of retirement savings
held in pension funds and individual accounts.
● Working America doesn't have all that much
saved ... and what they have been able to save has seen, on average a
20% decline. (More than half of all working households have $25k or less
saved for retirement.)
● From its highs in October 2007, all three
major stock market indexes are down about 20 percent. That means you
could have lost $40,000 if your 401(k) was worth $200,000 at its peak.
Increased Foreclosures
● Doing nothing will increase the number of 50+
homeowners at risk of foreclosure. Almost 700,000 older Americans are
already delinquent or in foreclosure - more than a quarter of all
foreclosures or delinquencies (28.1 percent).
● Such an outcome will greatly endanger the
prospects for a secure retirement for these older households and make
the recovery from our current economic problems more lengthy and
difficult.
Loss of Housing Equity
● Doing nothing will perpetuate the current
downward slide in housing prices and values. Home equity is the single
largest component of household assets, especially among households
headed by older Americans. Doing nothing will further these equity
losses.
Threatening the Stability of America's Banking
System
● Doing nothing could encourage runs on banks,
increase the potential for bank insolvencies, and force further
consolidations in the banking system which has its own risks in terms of
competition, consumer choice, and furthering the "too big to fail"
mentality. Widespread bank failures could also severely stress current
safeguards like the Federal Deposit Insurance Corporation fund.
Information provided by AARP
AARP is a nonprofit, nonpartisan membership
organization that helps people 50+ have independence, choice and control
in ways that are beneficial and affordable to them and society as a
whole. AARP does not endorse candidates for public office or make
contributions to either political campaigns or candidates. We produce
AARP The Magazine, the definitive voice for 50+ Americans and the
world's largest-circulation magazine with over 33 million readers; AARP
Bulletin, the go-to news source for AARP's 40 million members and
Americans 50+; AARP Segunda Juventud, the only bilingual U.S.
publication dedicated exclusively to the 50+ Hispanic community; and our
website, AARP.org. AARP Foundation is an affiliated charity that
provides security, protection, and empowerment to older persons in need
with support from thousands of volunteers, donors, and sponsors. We have
staffed offices in all 50 states, the District of Columbia, Puerto Rico,
and the U.S. Virgin Islands. Web Site:
http://www.aarp.org/
Keep up with the latest news for senior citizens, baby
boomers
Sept. 30, 2008 – AARP released a list of ten ways
that the “lack of bipartisanship and decisive action in Congress”
yesterday will impact individuals in the U.S., along with a statement
from Bill Novelli, CEO, critical of the government’s failure to pass the
bill to address the collapse of financial markets in the U.S.