Many American corporations, acting more like welfare organizations than entities that seek to maximize profits, are, or will be, overwhelmed by the looming pension crisis.

That's the thesis of the business writer Roger Lowenstein. He warns that today's 401(k) system won't adequately fund the average retirement. The average 401(k) participant has a balance of only $31,000, he notes, saying that measly amount isn't nearly enough, along with Social Security income, to ensure a decent retirement.

"America now faces a crisis of epidemic proportions," he writes in the introduction of his book While America Aged, as he points to the many businesses with underfunded retirement funds. "The fabric of the nation's pension system is collapsing," he writes, "at the very moment when the population is rapidly aging."

Corporations, as well as numerous public entities such as the state of New York's Metropolitan Transportation Authority have made pension and health insurance promises that are unsustainable. The results of these pie-in-the-sky pension policies are all around us: Corporations file for bankruptcy protection. Subway fares rise in a system that is ancient, breaking down and starving for cash for long-delayed improvements. And General Motors may be headed for the ash heap of history.

How did the once mighty GM come to this lowly state? Because of an uncompetitive position is due to giant pension and health costs. So the automaker has lost huge amounts of market share over the past half century.

Although Lowenstein spotlights GM's woes in this book, all the American automakers are straining under huge labor costs, which have been driven sky high by pensions and health-care costs.

"Largely thanks to cheaper labor," Lowenstein writes on Page 46, "Japanese carmakers could manufacture a car and ship it to the United States for $1,650 less than the Big Three could produce one here."

The problem, Lowenstein argues, is that big American corporations offering defined benefit programs and/or health insurance are taking on a role that in other nations is the government's responsibility. Those extra costs mean U.S. corporations are often at a disadvantage.

By the end of this short but engaging book, Lowenstein is making a pitch for some form of expanded government health care and a government 401(k) plan that would presumably get Americans to save more. He praises such a 401(k) plan offered by Sen. Hillary Clinton.

Even though it's easy to take issue with most of Lowenstein's solutions, he should be commended for calling attention to problems confronting numerous public and private entities. Because this is a critical issue that the average pol promising limitless pension benefits and tax cuts doesn't discuss.

"Unfortunately, pension plans are an easy place to defer spending to balance the government budget," says Elwood Hillis, a former congressman from of Indiana.

That's because the career pol who wants to look good during an election cycle often uses the oldest trick in the book: He or she passes the problem to the next administration.

Still, is the problem that there are not enough government health care and pension benefits or that there are too many? Or possibly it is something more profound? Could it be an issue that Lowenstein never touches on? Could it be culture?

Americans are not only living longer than their forebears, but living very differently today than Americans who set record saving levels generations ago. They today expect more and more of the government than their grandparents did. Yet the more government we get, the more we tend to want. We often lack the spirit of thrift that once led the typical American to consume less, save much more and work much longer.

Still, if we accept Lowenstein's premise, that health care must be financed by the federal government and that government should do more to force or encourage Americans to save, then we will consciously be going away from traditional American individualistic values. We will be moving toward a socialization of savings and health services.

Let it be stated clearly that we will turn more and more to the state because we can't do it for ourselves. But let us remember that we have already traveled far down what one socialist critic, F.A. Hayek, called "the road to serfdom."

And let us remember that we have already had more than 40 years of Medicare, and that program is in trouble. Also in trouble is the Social Security Trust Fund-a fund deemed fraudulent because it has no tangible assets. However Lowenstein says the latter crisis has been exaggerated (on Page 230). Actually, I believe he is partly right. Sure, the fund can pay its recipients now. So there is no immediate crisis.

But it is financed by a regressive payroll tax that is the biggest tax paid in many American households, and unless we are prepared to keep raising this big tax-one that has been hiked dozens of times over the past few decades-there will be another crisis. And it will be followed by the usual bipartisan solution: raising payroll taxes. Incidentally, Lowenstein advocates higher payroll taxes (Page 231).

I'm not sure anyone in the short term has the solution to America's looming pension fund crisis. I believe the long-term answer is partly in changing the consumption-at-all-costs culture and helping Americans understand how to benefit from a defined contribution system. Still, culture doesn't change overnight.

The ultimate answers may include more favorable tax treatment of savings. The might also mean more available health savings plans and greater use of the 401(k) plans that Lowenstein maligns.

The problem with his critique is that the government's solutions-bigger Social Security and Medicare-have had mixed results, and certainly the costs of these programs are daunting. They could threaten a new generation of American workers with European welfare state social insurance tax rates. In some European welfare states, people pay 20% to 30% taxes for their social insurance systems.

Is that what Lowenstein wants? His solutions would probably take us there.

Indeed, the ultimate solution to what is really a lack of saving will not come from the government taking over a bigger part of our economy. If an even bigger government were such a good solution, then payroll taxes would be declining and the government's forced Social Security saving would be ensuring that most of us could look forward to a well-financed retirement.

Nevertheless, this book, because of its diagnosis of the problem, is well worth the reader's time.