Book Review: “America, Welcome To The Poorhouse”

America, Welcome To The Poorhouse

Jane White's book America, Welcome To The Poorhouse is an angry rant that you just may agree with incessantly.

Author Bio: Jane White is Founder & President of Retirement Solutions, LLC, which promotes 401(k) reform and provides investment education.

Publisher: FT Press. A compact 247-pages in hardcover.

Summary: America, Welcome To The Poorhouse is one angry, no-nonsense book!  Jane White blames more politicians than I can name for causing the mess we're all in.  She plays no favorites and thinks both parties are corrupt. Phil Gram (R-TX) deregulating the banking industry is the genesis of this crisis, while Chris Dodd (D-CT) is blamed for carrying bank deregulation further by deregulating exotic financial instruments.

Review: America, Welcome To The Poorhouse

Jane even questions whether Bernanke knows anything about economics. One of my favorite assertion of her's is that big business owns both parties, and politicians are just playing puppets to their lobbyists.

In a great irony, Jane writes that Congress has a higher standard of living than the taxpayers who subsidize it.  So true as the average salary for a House and Senate member is $174,000 a year, or 4X the US median wage.  Meanwhile, as of 2006, 290 members of Congress were receiving an average pension of $61,000 a year!  As a result, those jaded politicians stay in politics for way too long and take way too much of our money.

The solution for everything seems to come from putting lobbyists out of business by introducing campaign reform.  Furthermore, we should refuse to contribute to Congress and instead, fund a citizen's revolt!  Jane concludes by saying America needs to prepare for an “Economics Olympics” with higher education as the key to winning gold.

I found myself agreeing with much of what Jane says in America, Welcome To The Poorhouse. She writes with acerbic reality that just stuns the reader.  It doesn't matter whether there's a Democrat or a Republican in the White House, money will eventually control their decision making.  Since it's inevitable we will have self-serving, corrupt politicians, we need to do our best to educate ourselves on the economic realities of various policies.

A Taste Of What's Inside America, Welcome To The Poorhouse

Chapter 1: Why You Can't Retire From A 401(k) Plan: You Won't Have 10X Your Salary In Your Account At Age 65

* Australians have it good and we don't.  The typical 30-34 Australian will have assets of around U$540,000 when they are ready to retire vs. $43,000 for the typical American.  The reason for the difference is Australia's superannuation system where employers are required to contribute 9% of an employees salary up to $135,000 to his/her retirement fund.

Chapter 2: How To Save Wisely Until We Get 401(k) Reform

* One of my favorite parts of the book.  Jane asks why there is a silly $16,500 cap on 401(k) contribution.  I've written before that nobody is going to get rich and retire off $16,500/yr contribution for their careers.  The Australians can contribute $150,000 a year for $450,000 total in three years after the age of 60.  We have a preposterous $20,000 contribution cap over 60.  What a joke! We need reform.

Chapter 9: How Credit Card Debt, Home Equity Loans Get You Over Your Head In Debt

* ARMS & 0% credit card balance transfers are bait and switch tools according to Jane, so stay away.

Further Reading

Share your thoughts on whether you think America really is in “the poorhouse”. In your comment, please share with us whether you think this downturn will permanently change consumption behaviors for the better, or whether we'll regress back to our levered spending ways.

To buy directly from Amazon click here:

“America, Welcome to the Poorhouse:” What You Must Do to Protect Your Financial Future and the Reform We Need


Financial Samurai – “Slicing Through Money's Mysteries”

About The Author

42 thoughts on “Book Review: “America, Welcome To The Poorhouse””

  1. @Bob
    Looks like the economy is raging back though Bob! 2009 is a bonus bonanza, and the job market looks to be tightening. I’m optimistic!

    I love how the government forgives tax on $38 billion in any profits for citigroup to save them billions. Coincidence gov’t owns 34% of the company? Nope. Everybody is in it together.

  2. America is the poorhouse. We are in times like the Great Depression. The Great Depression caused the pre-boomer generation to be frugal. We are repeating history!
    .-= Bob´s last blog ..Credit Card Rebates =-.

  3. @ctreit
    comment on #3.

    I think it’s safe to say our government was already involved with health care quite a bit. Medicaid, Medicare and pricing. Also with rules and regulations to control health care companies, and not allowing national competition. To say our government will do a better job than the private sector is just plain hogwash. What’s the purpose to have government run health care? To increase quality of care, save costs

    There already is rationing with private run health care and it will be no different with government run health care. Nothing is unlimited, costs will have to be controlled.

    While for simple things (ie regular check ups) a government run plan might help save costs. The issue is the costly procedures and when you are near end of life is where you have dramatic costs. This is what’s bankrupting Medicare. How is our government going to save us money then?
    .-= Investor Junkie´s last blog ..American Express Merchants Win 10k Promotion =-.

  4. @Kevin@OutOfYourRut
    It seems like the bottom line is that successful capitalists CAN’T win b/c being rich/successful puts you in a minority. “A protruding nail gets hammered down” is what the Chinese say.

    The #1 thing I think is for us NOT to rely on big government or the private sector to take care of ourselves. We need to take care of ourselves. We can’t count on anybody else but our selves, and that’s why education is key.

  5. Don@MoneyReasons

    It’s good to hear from someone that was in the industry speak about the matter. To often, all we have to go on, is the sensationalism created by the media. And they tend to favor non-business party or underdogs, even when the business in question is in the right.

    I’m sorry to say that, but I think a lot of business matters are “Catch 22” anymore.
    .-= Don@MoneyReasons´s last blog ..Creating My Kid’s Christmas Money Fund =-.

  6. 1) There is no question that big business has politicians in their pockets. The insurance and pharma lobby for one is behind stalling health care reform. Being a lobbyist is one of the best jobs in the US. They make a ton more money than four times the national average, which is really not that much money for a politician when you consider politicians’ lifestyles (maintaining two homes, etc.) and the money they control – a budget of a few trillion.

    2) How much does Bernanke know about economics? Probably more than Jane White does, or anyone of us does, which may still not be enough. After all, economics is a very fluid and imprecise science since it deals with human decision making.

    3) We don’t like government involvement in anything, but it looks like the private sector has not worked out for us in many areas. Two examples. Health care: our health care expenses per capita are about twice as high as they are in other advanced countries, but key numbers like infant mortality and life expectancy are lower than the average of these countries. As a country, we get less from the private sector, but we get to pay almost twice as much for it. Retirement: Jane White’s purpose is reforming retirement programs. The private sector certainly has not served the public very well. – I think we should not be so scared of having the government involved in certain areas in which the private sector has obviously not done such a great job. The government’s involvement in other advanced countries seems to work pretty well. Maybe we should copy some of their programs…

  7. @Jane White Wow, it’s Jane White herself!

    I’m pretty impressed with what the UK legislature is doing right now wrt taxing bonuses over 25K pounds by 50%. Ouch.

    I really hope we find a plausible way to fix the retirement crisis. What you write about regarding social security, 401k’s etc is quite true and quite scary.

    Congrats on writing such a poignant book. Thanks for stopping by!

    Best, Sam-urai

  8. Thanks Financial Samurai for the wonderful review–and the intelligent comments! Please buy my book and give your Congressperson hell. I just got back from D.C. and met with a Congressional staffer who seemed indifferent to the financial/retirement crisis. I truly believe that the reason why France and the U.K. have already adopted financial services reform is because their politicians aren’t on the take. We’ve got to take America back.

  9. @Moneyreasons
    Your comment, “I think if Banks didn’t lend money to subprime, lawsuits would have ensued. ” is right on the money.

    I was in the mortgage business in the 90s when subprime was snaking it’s way thru the mortgage world, and it was being driven by activists threatening lawsuits. The banks responded with good old fashioned risk based pricing, then called subprime because it was more expensive.

    Then in the late 90s, early 2000s, the same activists threatened and brought lawsuits for discriminatory pricing, and state governments responded by passing fair lending laws that restricted the price and terms of subprime. Shortly after, we had the subprime mess. Now there is no more subprime.
    .-= Kevin@OutOfYourRut´s last blog ..Fast Track to Frequent Flyer Miles =-.

  10. @Moneyreasons

    To clarify, I don’t place blame solely on banks. I share your collective “sipping the corporate punch” mindset. My point was to highlight their influence on politicians in relationship to the book. On point #2… sub-prime is only a portion of the whole picture. The over-extending occurred across all levels of income. The sub-primes were just first the “party”. Since we hang in a teeter-totter balance, we still could see another wave of “prime” borrowers default (depending on what sources you read). You do address this with the “strategic defaulters”, but think sub-prime catch too much heat.

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