Easy ways to save money
Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last "bubble," if that is what we choose to call them. We haven't had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we're ready to understand the savings and loan "bubble" that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What's more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart's 1946 film, It's a Wonderful Life.
The growing disparity between the developed and the developing countries has once again rekindled the debate about the relative merits of foreign investment as means whereby the developed countries can help the devel- oping countries in both achieving a reasonable rate of growth and also from preventing the widening gap between the North and the South from widening even further. This renewed interest in the debate was most sharply highlighted at the recently concluded North-South economic summit conference at Cancun, Mexico. There, the United States took the position that massive increases in foreign aid were neither practical nor the best means of ensuring continuing and satisfactory growth in the developing countries. Rather the solution was to be found in depending on a free market economy and on inflows of private foreign investment. Behind these views, of course lie the more fundamental questions: for example, what should be the role of multinational corporations in the developing countries since they constitute the main source of foreign private investment? Should there be greater cooperation between the public sectors of the North and the South? What is the best means of bridging the economic gap between the North and the South: through direct transfers of wealth from the North to the South or through raising South's growth rates via the transfer of technology and the inflow of investment by multinationals? These questions are of fundamental importance and have wide ranging implications, not only for the economic
Thrift Savings Plan: A Practical Guide to the TSP, is a valuable information source for all federal employees. Regardless of what agency you may work for chances are you received little or no explanation of the in's and out's of the TSP when you first started working for Uncle SAM. This booklet covers many of the details that are relevant and important to all TSP participants. The booklet will take you from what happens when you sign up for the TSP through your retirement withdrawals. If you are like most federal employees you may be participating in the TSP but you may not be aware of how the TSP is set up or works. While this booklet does not go into how to invest in the TSP funds, it does provide an explanation of the funds available for plan participants in which funds can be invested. Along these lines, it also discusses a few ways to diversify your TSP holdings and maximize your potential returns at the same time with some real life examples. While the booklet does not get into investment tactics it, does provide an excellent overview and discussions of the way the TSP is set up and works in general. So if you are a federal employee what are you waiting for? Buy Thrift Savings Plan: A Practical Guide to the TSP now.
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