So The World is Not Going to Hell in a Hand Basket After All

We heard it from the press, over and over: "Americans are Now Using Their 401(k) Plans as a Piggy Bank!" Borrowing from 401(k) plans to finance day-to-day expenses had reached epic levels, we were told. Those profligate baby boomers were borrowing against their future, putting their retirement (and perhaps civilization as we know it) at risk.

Turns out, however, that it may not be true. A recent article in Investment News reports that 401(k) loan activity actually went down in 2007. This according to data from major fund managers like Fidelity and T. Rowe Price.

While I'm no fan of Phil Graham's politics, could he have been right when he said that the country is in a "mental recession?" Bad news attracts eyeballs and sells advertising for newspapers, television and even on the internet. Good news is often ignored. After all, who wants to hear from Pollyanna. As a result, we often tend to believe that the economy is is worse shape than it really is, as seems to have been the case with the 401(k) loan story.

So maybe the world is not going to hell in a hand basket after all. Go Figure.