This will be an anxious holiday season for one group in the 23rd: those who own individual retirement accounts with a stock market component. Many of us are invested in funds at Vanguard or elsewhere that include stock index funds of one sort or another. If the country goes over the fiscal cliff, the value of these indexes will plunge. They are already shaky – the market was down sharply on Friday, and didn’t do well on Christmas Eve either.
Republicans have long championed IRAs, in contrast to defined benefit pension programs, as a way of promoting economic choice and freedom. President Ronald Reagan was a great advocate of IRAs and encouraged their use.
You might that think that this history would have created a certain sense of obligation among Republican politicians – a sense that they should not take actions that undermine the stock market and reduce the value of the IRAs they urged upon us.
You would be wrong – as you no doubt realized during the 2011 debt ceiling crisis, when the Dow Jones Industrial Average plunged roughly 2,000 points between the end of July and early August. Standard and Poor’s, shocked by the way House Republicans pushed the United States to the edge of default, downgraded the U.S. credit rating.
Now Republicans in the House are at it again, refusing a perfectly reasonable offer from President Obama to avoid the fiscal cliff through measures that would increase revenues, decrease spending, and boost economic growth. A market plunge looms once again. Rep. Tom Reed’s constituents will suffer as a result.
- News Summary: Stocks swoon as ‘cliff’ talks falter (miamiherald.com)