Getting the Deficit We DeserveUncle Sam isn’t...
Getting the Deficit We Deserve
Uncle Sam isn’t the only one busily mortgaging the future. Americans may pay for their spendthrift ways individually at retirement, according to a study by the Employee Benefit Research Institute in Washington.
The reason: More companies are providing pension benefits in lump sums--large cash payments that replace monthly retirement annuities, said Joseph S. Piacentini, research associate for the institute. And instead of rolling those payments into tax-deferred accounts, Americans just spend the dough.
In 1988, 8.5 million workers got more than $48 billion in lump-sum distributions, according to the study. But only 11% put all the money into another retirement account. A whopping 34% said they spent the whole amount, Piacentini said.
Some long-term planners are so worried that they want the laws changed to limit workers’ access to these lump sums. For two reasons, the proposals appear headed nowhere.
“There is a lot of resistance in the private sector” to paring retirement options, Piacentini said. And the deficit-ridden government, which does quite a bit of spending itself, collects taxes on every retirement dollar spent. “They don’t want to do anything that would stop people from paying tax.”
Now He Blows Up Balloons
Old tank commanders never die--they just trade away. Avraham Bar-Am, a retired Israeli general and military hero who commanded armored units in the Sinai Desert, traded tanks for toy balloons.
The 57-year-old former tank commander and his Los Angeles firm, Atlas Home Video, a unit of closely held Videotape Industries Inc., have introduced a new line of children’s toys called the Magic Balloon in more than 80 stores around Southern California. It is a toy with no military applications.
Retailing for about $20, the Magic Balloon is a party kit with enough balloons to make a menagerie of animals or other sculptures--plus a videotape of a fanciful birthday party with instructions on how to make purple poodles or green rabbits. It even comes with a pump.
A grandfather who says he wants to “challenge children to be creative,” Bar-Am foresees other video kits too. But the former general will have to outflank the competition first. For example, BugByte Inc. of Wilmington, Del., offers balloon sculpture software for MacIntosh computers, complete with balloons.
For Bar-Am, whose military exploits in 1967 and 1973 earned him comparisons to Gen. George S. Patton, the prospect of battling toy-business competitors evokes only a wry smile and a shrug.
“It is not so dangerous,” he says.
