Keep an eye on this

Douglas Rushkoff linked to this New York Times article earlier this week, but he is not alone in thinking it could prove to be a watershed indicator for the direction of America's economy. The gist:

After a three-year bear market, many major American companies are spending large amounts to shore up pension plans that have deteriorated, sometimes drastically. Many companies are also considering ways to reduce their pension obligations to workers, possibly undermining benefits for millions.

[. . .]

At the same time, unusually low interest rates are further undermining pension plans. The effect of the bond rates is on the financial calculations used to determine the present value of the pension liabilities, not on the pension funds' return. Falling rates make future pension obligations look bigger on current balance sheets. To meet their obligations to workers, and to stay in compliance with pension laws, companies have been forced to set aside more money.

When the big-boys like I.B.M., Honeywell, Johnson & Johnson, Ford, Lucent, Boeing, and Delta start putting aside upwards to $4 billion for their pension obligations, it isn't apocryphal to extend one's thoughts to the interesting ramifications this might have on an aging economy. Factor in the impending war and a presidential stimulus package that isn't even intended to help the economy until 2004 (gee, in time for an election) and then falter again in 2005 [note: if you don't have a screenname for the Los Angeles Times, feel free to use mine (screenname: blanchot75, password: afro1975). Don't say I never gave you anything!], and you have America's sense of self-worth, fiscally-speaking, if nothing else, taking a knock.

ADDENDUM: For more on the incredible contracting economic plan of 2003, see Kevin Drum's post on the matter.