In recent years there has been much alarmist talk of the impending bankruptcy of Social Security, but it is in the private sector that real dangers of default now loom. Social Security is safe through 2041 or longer, but the pension fund crisis is already squeezing corporate budgets, with disastrous consequences for jobs. If nothing is done, this pension-and-jobs crunch will intensify over the next two years.

While many CEOs sold at the top of the market, the pension funds and holders of 401(k)s were left with depreciating paper. Swooning stock markets have caused the major pension funds to lose 40 percent or more of their value since March 2000. Even the well-stuffed 401(k) has become a 201(k).

Pension funding has become so central to today's capitalism that these developments menace the financial good health of corporate giants as well as individual retirees. Most reports on the crisis have, understandably, focused on the plight of the 42 million Americans who have 401(k)s or the equivalent. But the impact on corporate pension schemes, on which a similar number of people depend, has been just as bad. Many businesses must now forgo investment or face bankruptcy because they cannot meet their pension obligations.

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