Washington’s Next Target: Your Retirement Savings

(Editor’s Note: Washington is running out of buyers for its Treasury debt securities. The nations of the world don’t want US Treasuries any more…they’re trying to dump them as fast as they can. So who will finance Washington’s insanity? It might be YOU, if you have retirement savings. Washington wants to nationalize ALL retirement savings…pensions, IRAs, 401(k)s, 403(b)s…ALL OF THEM.

Ladies and Gentlemen, will this be the last straw? Will you sit idly by and allow Washington to steal your life savings? Is there no act of tyranny…no level of serfdom…so grievous that you will finally fight back?)

Will The Government Nationalize Your Retirement Funds ?

by “Da King”

It’s no secret that Obama Hood and his band of merry liberals want to redistribute wealth and centralize power in this country (but don’t call them Socialists!). They don’t trust the American people to handle their own money properly. They view the American people as too ignorant to be trusted with much of anything, and besides, in Liberal La La Land, your wages really belong to the government in the first place. That’s why liberals refer to things like tax cuts as “government spending.” Liberals say things like “why should the government spend $700 billion on tax cuts for the wealthy?,” as if a person’s wages belong to Obama and company instead of to the person who earned those wages. And never mind that the wealthy already pay the highest taxes in the country by far. If you point that out to liberals, they will start reminiscing fondly about the “good old days,” when the highest marginal tax rate was over 90% here in the land of the free-up-to-a-point-to-be-determined-by-liberal-wealth-confiscators. In true Orwellian fashion, liberals call such discriminatory theft “fairness.”

But stealing more money from the wealthy will only take liberals so far. After all, reversing the Bush tax cuts for the wealthy is only expected to bring in about $70 billion per year in additional government revenue, hardly enough to close the $1.3 trillion annual deficit. It’s a drop in the bucket. Liberals need to find a really huge pile of money to steal in order to continue spending America into fiscal disaster implementing helpful governmental policies.

And there is over $7.8 trillion sitting around in private retirement accounts (401K, IRA, etc) that liberals would love to get their grubby mitts on. Think I’m kidding? Consider this from Forbes:

The U.S. Labor Department and the U.S. Treasury Department are holding hearings today and tomorrow on how to annuitize, that is, how to get a lifetime of income, from your 401(k) or IRA, entitled: “Hearing on Certain Issues Relating to Lifetime Income Options for Participants and Beneficiaries in Retirement Plans.”

How would the government go about insuring that our retirement plans provided a lifetime of income ??? Here’s how:

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts (GRAs)” which would provide protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” — presumably at taxpayer expense. …

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary — again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen.

Now, how could the government make 401K’s, IRA’s, etc. free from inflation and market risk?

Easy. Take them out of the market and put them under government control. That’s what the GRA’s would be, government controlled accounts. There have already been hearings on the plan:

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

By “attention and criticism,” that means Ghilarducci’s plan got the attention of liberal Democrats (mo’ money, mo’ money !), and criticism from conservative Republicans.

Of course, the government won’t be able to takeover everyone’s private retirement plans all at once here, like Argentina’s socialist government did a couple years ago. That would have people marching in the streets. For a takeover to occur here, there would have to be several intermediate steps, like….a financial crisis that threatened private retirement accounts (check), followed by a campaign of demonization of the private financial sector (check), followed by the government stepping in with unprecedented new powers over the financial system (check), followed by government proposals to “protect” the citizenry from the scary free market (check), etc, etc.

If would also be helpful if, prior to the government takeover of private retirement accounts, the government found a way to….say….dramatically increase the size of those retirement accounts, in order to allow the government to maximize the amount of money it will eventually steal…

Enter Democratic Senators Jeff Bingaman and John Kerry, and meet SB3760:

Automatic IRA Act of 2010 (S. 3760) enables nearly all employees who work for a private business with more than 10 workers and whose employer does not already offer a retirement plan to contribute to retirement savings through payroll deductions. Worker contributions would be deposited into their own Individual Retirement Account (IRA), ultimately managed by the same banks, mutual funds, insurance carriers, and other institutions that currently provide IRAs. The approach builds on the use of automatic features in 401(k) plans that encourage employees toward sensible decisions (while allowing them to make alternative choices), which has proven highly successful in raising 401(k) contribution rates.

Maybe the government can get those private retirement accounts up to $10-12 trillion before they swoop in and put it all under the control of the Social Security Administration (SSA). We all know what a bang-up job the SSA did with our SS retirement Trust Fund. They spent the Trust Fund and then wrote IOU’s in the form of T-bills back to us, so we can pay for the Trust Fund all over again later. Heck, if they used the same Ponzi scheme with our private retirement accounts, they could screw us all over again, and pay down the national debt at the same time!!! It’s genius, I tell you. Genius!!! It’s also known as monetizing the debt, which will impoverish us all, but why be bothered with such trifles? All the liberals have to do is convince us that the theft is for our own good. They’ve certainly accomplished that before. Stay tuned.

Do I know this is what the Obama administration has planned for us? No, I don’t know it for certain, but I do know they are considering it, and I do know the government is in dire financial straits. Plus, the Obama administration already made a play to takeover the health care industry, made a play to takeover the insurance companies, took over the student loan program, took an ownership stake in General Motors, has implemented financial regulations that enable the government to step in and shut down any financial entity it wishes whenever it wishes, has given the Federal Reserve unprecedented new powers, etc, etc. This has all happened in less than two years. I wouldn’t put anything past them, which is plenty worrisome enough for me.

“Da King” lives in Akron, Ohio.

Copyright 2010 Ohio.com

4 Responses to Washington’s Next Target: Your Retirement Savings

  1. The proposed legislation is actually far worse than it sounds above, not that it would be tolerable even if there WERE any intention of “paying down the debt.” The scheme is to throw the money directly into the general fund and “spend it,” i.e., throw it away on anything for the on-going purpose of destroying wealth and the middle class, which begins 5 percentiles above those who are on the dole.

    By far the most egregious insult to forced holders of a Guaranteed Retirement Account is that upon the death of the individual the government grabs whatever is left in the kitty. At present whatever is in an IRA is the property of the individual, once taxes are paid to get it out of hostage, and current ukases demand systematic withdrawal of percentages of those funds. Once “repatriated,” so to speak, the residue of the combination of individual savings and employer contributions are the possession of the saver to spend or leave to his or her heirs.

    Mull that one over until it soaks in. What was YOUR money in an IRA becomes the GOVERNMENT’s money, in particular upon your death. The capital you had accumulated–tax deferred, it is true–will no more be yours to dispose of as you please than the mythical money in your name in an individual Social Security account.

    In essence, the lucky participants will then have what is basically TWO forms of “Social Security” checks and no vested interest in their savings, and quite probably no say in how much can be withdrawn at any given time.

    This is outright theft, and there are two obvious counters: first, pay the ransom and close out your IRA. Yes, it is going to hurt, between taxes and penalties, but something is better than nothing. You will be gambling a skinny bird in the hand against certain lower returns on “your” money later and the certainty of not being able to use such funds as you wish upon your retirement OR to leave any residue to your children or favorite charity.

    Second…what sort of lunatic would start an IRA after the changeover? The obvious answer for Statists is to make an IRA mandatory for each worker. “MANDATORY, Mrs. Traynham?” Why, yes, dears. Never waste a good tax. The Nanny State’s story will be that you don’t have the sense or the decency to save for your old age without coercion and that you are clearly the sort of deadbeat who intends to spend your old age leeching off others through SS and Medicare. Unless you are forced to pay your “fair” share you won’t do it. Have you no sense of social justice?

    Estimates of how much is/was socked away in IRAs have run as high as 14 Tr; it is difficult to discern at any given time because the funds are normally “invested” in stocks or bonds, a very unsafe idea this century. No, don’t bother to tell me the stock market is up for that is a purely temporary condition–and all the more reason, particularly if you are older–to get what IS at present “your” money out of danger. Sure, you’re going to lose some hair and hide, but the original suppositions were that the stock market would never be down more than temporarily and that when you pay taxes on it you will have lower income and thus pay a lower rate. That may have been “fine” when your IRA was drawing returns of 7-15%(depending upon individual holdings), but it isn’t so now, and it won’t be for a long time, if ever.

    The third disastrous method to their madness is to ensure that “your” GRA funds are all held in…US government bonds, and nothing else. That’s right, those bonds that are theoretically paying 2% and falsly rated AAA instead of “junk.” The current inflation rate–no matter what the government tells you–is on the order of 6%, other than in the case of food, where it is much higher. The cheapest meat is up over 10.2% this year, ranging to close to 20% for more desirable forms, while produce and fruit ranges from 18% to over 50% due to weather, poor crops, green demands, and so forth.

    This means that as the dollar is dropping in value your dollars are also losing an additional 4%. At all times interest minus inflation must be calculated. Why is the government lying about inflation, other than habit? Because the economy looks bad enough–as it is–with the charade of zero inflation. In addition, some forms of government expenses must be adjusted with COLA. If you are not drawing SS or don’t have relatives who do so, you may not be aware that the Statists decreed this year that there will be no inflation during the Obamanation, and that SS recipients will have NO raise for that period, i.e., three years, at present. Yes, the Demmies/Left had no trouble deciding which group to sacrifice given their choice of unions, government employees, or old folks. Medicare expenses are going up strongly–and you may not be aware that we dear old geezers and gezerettes have no choice about participating in that program.

    Medicare does not cover optical or dental services, and for the past several years a standard office call has “cost” me over $600. Plus co-pay. Why? Because I almost never have to go to the doctor and am charged over $100/mo for a policy I would never have chosen myself. Catastrophic care would be far more sensible, and I could simply pay a hundred dollars to see the doctor.

    While we’re on the subject, what does YOUR insurance policy cost you yearly and why are you paying it? What was your actual usage last year? When my husband died I was offered the “opportunity” to enroll myself and our son, then 20, and in college, in COBRA…at $870/month! Being in full possession of my faculties I declined. I can think of a lot better things to do with $10,440/year than cover office visits and the off chance of injury. Over the course of three years Andrew and I were sick ONCE, and the nice Indian in private practice treated our “bug” successfully for $100 each–and that included shots to get us on the road to being well very quickly.

    If I were employed I would find out what a catastrophic care policy costs and go talk to my boss to see if he would swap me a raise of 75% of what my insurance cost him. Yes, I would have to pay taxes on that raise, but if you missed the details, as of 1/1/11 the putative value of your health insurance will be added to your pay stub as “income,” and oh, and unless the Bush tax cuts are extended your income taxes are going up sharply. What that insurance costs will go up for both of you. Except, of course, for programs that will no longer be offered and higher prices for “basic” coverage which will include items I doubt few readers here want, such as abortions and sex change operations. Several companies have stopped insuring children because new mandates under Obamacare will force inclusion of kids with “preexisting conditions” and known big expenses.

    Insurance companies are not charitable institutions, nor should they be. They’re bookies, betting that they can judge what is likely to befall you better than you can. And you know what? In general their actuaries are right! There is a very small chance that your child will develop leukemia and a growing one of becoming diabetic, but “insuring” (AKA agreeing to pay a portion of the bills of) a child whose expenses run tens of thousands of dollars a year skews the figures and raises costs for all. The insurance companies decline to participate, and so would you and I.

    The chute is narrowing as we are being run into the abbatoir. There are many sorts of freedom, and the most basic of all begin with guaranting that our income is OURS and our personal decisions on what to do with it are ours. Secession from the USA is only a first step, although an imperative one. Our problem is that the Feds are only one of four sorts of leeches and eels devouring our sustenance. How do we go about seceding from predators and oppressors at state, county, and city level? I don’t know.

    I don’t even know how many of you would agree with me on how many of the barnacles attached to us in the name of our “safety” must be pried off. For starters, how many occupations do you think “need” to require licenses and special, very expensive, generally useless periods of instruction? Suppose you ponder that one until I get the energy to discuss the issue.

    Regards,

    LBT

  2. Wry laughter. Russell, dear, I don’t do well when stuffed into little boxes. May we please have the “bigger” option to increase this one? When I could finally see what I wrote all at once–meaning after it was posted–an omission jumped out glaringly. The choices for reducing expenses include the “entitled” classes, of course. This is an easy call for those in power; unions, those on the dole, lawyers, and the bloated government “work” force vote overwhelmingly as blocks for the Statists. Those on SS are not always that obliging.

    My apologies, readers. Sometimes passion and outrage distract all of us, particularly when we don’t see as well as we did once.

  3. […] Washington's Next Target: Your Retirement Savings « DumpDC […]

  4. Danny says:

    At last a very good article in relation to the topic, continue the good work and also I hope to examine far more from you in the long run.

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