The 3 Rs Add Up to a Fourth: Recession... 51 Per Cent of Parents Are Educating Their Kids on the Credit Crunch

/PRNewswire/ -- Reading, writing and arithmetic are widely regarded as the essential building blocks of learning, but during these days of economic turmoil it seems another R is now being added to children's education - recession.

According to research carried out for The Co-operative Child Trust Funds, half (51 per cent) of all parents are actively teaching their kids about the economic downturn alongside helping with homework and reading bedtime stories.

The findings confirm that the financial crisis is taking modern parenting to another level with six in 10 (62 per cent) of Mums and Dads believing it is important for their children to understand the UK's unprecedented economic situation.

Zack Hocking, head of Child Trust Funds at The Co-operative, said: "Parents clearly don't want to shelter their children from the realities of the credit crunch and are making extra efforts to improve their financial education."

"It's possible that one good thing to come from the current downturn will be a generation that's financially wiser and better equipped to manage their money through times of economic uncertainty."

Further proof that today's children are fast becoming the 'credit crunch' generation is evident, with 49 per cent of parents confirming their kids have actively asked them about the economic situation.

While the greatest interest is shown from older children, it seems even the young are keen to gain an understanding with one in three (35 per cent) of 6 to 9 year olds seeking information from Mums and Dads.

Parents also feel financial knowledge equals financial power with more emphasis needed on educating children on their financial foundations.

64 per cent think children should be taught about savings and investments whilst Interest rates need greater attention from teachers according to 37 per cent of parents as does tax and national insurance (41 per cent) and government support such as child tax credits (28 per cent).

However, seven per cent of parents do not feel that they understand the economy enough to explain it to their children and, in some instances, have had to ask their older children to explain the economy to them.

Zack Hocking added: "If children are taught about money from an early age, future financial decisions are likely to be better considered. One of the easiest ways to set children off to a good financial start is to utilise the Government child trust fund voucher and supplement it with regular contributions, which will give young adults a fantastic head start when they turn 18."

The Co-operative Investments, with The Children's Mutual, the UK's only specialist in savings for children, offers the UK's first Ethical Child Trust Fund stakeholder account .

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Medicare, Social Security Owe Up to $52 Trillion to Current Retirees and Workers

RJ Note: Now ain't this a kick in the ole wallet.

/PRNewswire-USNewswire/ -- If the federal government stopped the Medicare and Social Security programs tomorrow -- collecting no more payroll taxes and allowing no more accrual of benefits -- it would still owe up to $52 trillion to those who have already earned these benefits, according to a new study by the National Center for Policy Analysis (NCPA).

"The numbers are staggering," said Andrew Rettenmaier, an NCPA senior fellow and coauthor of the study. "No one thinks we are going to end these programs," he said, "but if we account for federal obligations the way private pensions and state and local governments are required to, the federal government owes up to $52 trillion (in current dollars) as of today."

To put the numbers in perspective, the size of the entire U.S. economy is $14 trillion. The newly released study determined that:

-- An estimated $9.5 trillion is owed to current retirees -- an amount
equal to almost $250,000 per person 65 years of age and older in 2008.
-- Adding the liability owed to those nearing retirement (55 and older)
more than doubles the accrued debt to $20.6 trillion.
-- Adding the benefits accrued by younger workers brings the total to as
much as $52 trillion. The beneficiaries include all retirees, as well
as anyone in the workforce above 22 years of age.

If Medicare and Social Security continue on their current course, the obligations of taxpayers will grow. In the spring, the Social Security/Medicare trustees reported that if Social Security and Medicare were to continue indefinitely, the present value of the unfunded obligation is $101.7 trillion, or seven times the size of the national economy.

Currently, the two programs combined are spending more than they are receiving in premiums and dedicated taxes:

-- By 2012, one of every 10 income tax dollars will be needed to close
the funding gap for Social Security and Medicare.
-- By 2030, almost half of all income tax dollars will be needed to close
the funding gap.
-- By 2070, almost 80 cents of every income tax dollar will be needed to
cover the cash-flow deficit in the two programs.

"Without reform, paying for elderly entitlements will crowd out other federal spending or will require substantial tax increases," said Rettenmaier.

"The longer we postpone reform, the worse the financial picture becomes," he said. "Procrastinating will make the cost of reform even more painful."

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Layoffs, See-Saw Markets, and Distracted Employees Challenge Managers, but Past Recessions Offer Important Lessons on How to Lead

/PRNewswire/ -- Managers who take 10 steps in three areas -- financials, people and organizational climate -- stand a better chance of emerging from the recession with their organizations poised for success, according to research into past recessions by The Forum Corp. (www.forum.com), a consulting firm that helps organizations execute strategy through people.

As layoffs rise, markets see-saw, and employees worry about their futures, managers are increasingly challenged to meet their goals, focus their people and keep their organizations moving in the right direction. Uncertainty can paralyze many managers or cause them to over-react, but knowing specific, recession-tested actions can give them confidence and strategies that help them lead.

"By looking at past recessions we've identified 10 steps that can make the difference between success and failure in managing through our current downturn, and they all come back to leadership," said Ed Boswell, CEO of The Forum Corp. "Following these steps will be particularly valuable in organizations that are undergoing cost-cutting and layoffs, which challenge managers to do more with less."

Using its research, Forum, along with Paradigm Learning, has developed a managerial toolkit, available at www.leadinginatougheconomy.com, which managers can use to consider the actions they and their organizations must take. The toolkit, which is free and requires registration, can be used independently or with the assistance of Forum's experts, who can help guide and facilitate discussions.

The 10 steps in three areas are:

Financials:


1. Move quickly to reduce costs and control spending by narrowing focus. Winners in a downturn focus on a few critical priorities where they can develop a clear lead, and they walk away from bad business. Losers chase unprofitable sales in an attempt to hold their top line.

2. Refrain from across-the-board cutbacks, being sure to preserve areas that customers value most. Businesses that uniformly cut costs often find that they end up damaging their ability to sell and deliver their products and services. How do you find out what customers value most? Ask them.

3. Consider alternatives to layoffs. Downsizing tends to bolster the bottom line and stock price in the short term, but often creates long-term negative repercussions. Alternative strategies include cutting management bonuses, freezing salaries and reducing compensation options. It's critical to clearly communicate the rationale and impact to employees.

4. Invest in opportunity. A bad economy can present bargains, both in new assets and in new talent. Good areas to invest in are R&D, marketing and customer-perceived quality. By contrast, investing in working capital, manufacturing and administration doesn't pay off as well.

People

5. Retain and develop top talent. High-impact workers are often more susceptible to being poached by a competitor in a downturn. Organizations that provide development experiences and rotational assignments have better employee retention rates.

6. Make sure everyone's on the same page. When alignment on key goals is absent, performance suffers, according to studies on strategy execution. Top leaders frame an agenda and meet with key stakeholders to gain support and build commitment to overarching goals and values. Ineffective leaders let inter-office politics fester and hidden agendas dominate.

7. Encourage questions and new ideas by making it safe for employees to raise them. Leaders who admit they don't have all the answers and ask for input empower their people to contribute their best ideas.

Climate

8. Manage the heat. Leaders are often tempted in difficult times to relieve the organization's stress by making unilateral, tough decisions. That's often a mistake. Leadership by dictate often doesn't take because it lacks a broad base of support, and it often eliminates constructive conflicts that challenge the status quo and fuel good decision-making.

9. Communicate authentically. Strong leaders acknowledge the challenges they struggle with and, by doing so, build trust among followers. Rather than being a sign of weakness, it's a sign of strength.

10. Create a positive vision and attitude that acknowledges reality. Businesses at the top of their markets often fall while "sleeper" companies sometimes jump to the top in a tough economy. When leaders exercise discipline and focus by mobilizing employees to respond to customers' interests and values, they increase the chance that, when the downturn ends, they'll come out on top.

Additional insights on this topic are available in Forum's point-of-view paper entitled "Leading in a Recession."

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