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Oct 15, 2008 7:15 pm US/Eastern
Financial Advisors: It May Be Time To Use 'R' Word
Kiplinger's Personal Finance Editor: 'America Is Suffering From An Epidemic Of Living Beyond Our Means'
NEW YORK (CBS) ―
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Treasury Secretary Henry Paulson , left, and Federal Reserve Chairman Ben Bernanke listen to questions from Senators during a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill, Feb. 14, 2008 in Washington D.C.
Mark Wilson/Getty Images
Don't expect the country's economy to get healthy quickly -- that from Federal Reserve Chairman Ben Bernanke.
He spoke in New York City on Wednesday, and as CBS 2 HD found out Treasury Secretary Henry Paulson was cautioning the same thing in Washington.
A day after the Treasury Department announced it will inject up to $250 billion in U.S. banks in return for partial ownership, President Bush said it's temporary, not a takeover, and the treasury secretary said stabilizing the economy is essential.
"Gets banks lending like they're supposed to again, support business and jobs; that's what we need here," Paulson said.
But don't expect a quick recovery and jobs lost in New York City will be nearly double what was predicted a few months ago.
"So, we're looking at a job loss over the next two years of 165,000 in the private sector," city Comptroller William Thompson said Tuesday.
Of those losses, 35,000 will be on Wall Street. With such jitters, financial advisors are now doing a drive-by. A bus tour of volunteer financial advisors is touring 60 cities. On Wednesday, they stopped in New York.
"People are concerned about 401Ks," financial advisor Lisa McKnight said.
And no one knows it better than investor Jim Gilmartin.
"You know, I lost a ton of money in my 401K," Gilmartin said.
Added investor Keith Hughes: "Everybody was over-leveraged."
Americans have over-borrowed and over-consumed, according to the editor of Kiplinger's Personal Finance magazine, who said the average credit card debt is $16,000.
"America is suffering from an epidemic of living beyond our means," Knight Kiplinger said.
It's at times like now that people want to know how to get rid of debt, protect their money, save for college and navigate a volatile stock market.
As the country decides to bail out banks, the jobs outlook for New York is bleak.
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