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View Full Version : Be Afraid… for Your Retirement Accounts!



SilverWeed
31st October 2008, 17:33
from Doug Casey's The Room, which comes out every Friday:

"The financial punditry has recently had a field day deriding the move by Argentine Comrade-in-Chief Christina Kirchner to effectively nationalize private retirement accounts in that wonderful but governmentally challenged country. And derision is just the sort of tone one should adopt upon viewing such a blatant political grab for the results of private labor.

Those of you who have been in touch with Doug Casey’s views for any length of time will recall his repeated warnings that, when push comes to shove, the U.S. government will do just what the Argentine government is doing… place its dead hands around the throat of the $17 trillion now resting in U.S. retirement accounts. As Doug calculates it, that sum will be found too irresistible by half for desperate politicos approaching the end of their tax/spend/inflate rope and noticing that it had been tied off with 13 knots and a head-wide loop.

“Far-fetched,” mutters the complacent thinker, adding “That sort of thing happens only in The Argentine and other such backwaters.”

To which I shove across the thick layer of clutter on my desk the following from InvestmentNews (thanks, Steve!)…

Powerful House Democrats are eyeing proposals to overhaul the nation's $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at The New School for Social Research in New York, contains elements that are being considered. She testified last week before Mr. Miller's Education and Labor Committee on her proposal.

… Under Ms. Ghilarducci's plan, all workers would receive a $600 annual inflationadjusted subsidy from the U.S. government but would be required to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

"I want to stop the federal subsidy of 401(k)s," Ms. Ghilarducci said in an interview. "401(k)s can continue to exist, but they won't have the benefit of the subsidy of the tax break."

research24
31st October 2008, 17:34
Mine is entirely in PM's and real estate (gasp!).

Trvlr45
1st November 2008, 00:14
I had heard recently that the communists were planning on doing this. What amazes me is that after lying about Social Security by turning the number into an un-constitutional ID and tracking number, they plundered the "Trust Fund" and I have no doubt the demoncrats will come up with ANOTHER plan and do exactly the same thing. It will just turn into another tax like Social Security and the government will spend it on social programs and whatever else they feel like.

skijake
1st November 2008, 11:42
I had heard recently that the communists were planning on doing this. What amazes me is that after lying about Social Security by turning the number into an un-constitutional ID and tracking number, they plundered the "Trust Fund" and I have no doubt the demoncrats will come up with ANOTHER plan and do exactly the same thing. It will just turn into another tax like Social Security and the government will spend it on social programs and whatever else they feel like.

That's it! I'm taking the hit and buying more silver. What a rip-off. They tell you one thing, trap you, skin you. No thanks! God help us.:mad:

SilverWeed
1st November 2008, 12:05
Of course, this doesn't mean that they ARE going to go in there and rob your retirement account. I'm sure when that decision is made they won't call it that. And maybe the author(s) here are wrong in their assumption about the new incoming administration. After all, what could they do with $17T of funny money (YOUR funny money, at that) besides to have your/the taxpayers best interests at heart?

I'd predict the biggest ANTI-WASHINGTON demonstrations you've seen yet, if they try this. You think the opposition to the bailout for Wall Street was loud. You'll see anarchy in the streets if they try this. But I expect eventually Doug Casey will be proven correct on this one too.

research24
1st November 2008, 14:00
Of course, this doesn't mean that they ARE going to go in there and rob your retirement account. I'm sure when that decision is made they won't call it that.

Oh, no, they wouldn't do that. They will just "save" your account by guaranteeing it, while at the same time refusing you to make withdrawals. And like social security, the money miraculously disappears. But hey, its the full faith and credit of Uncle Sugar. After all, your account is merely digits in some very honest outfit's computer. They can't just vanish. Certainly not like the $2Tn worth of counterfeit Treasuries and the tens of billions of counterfeit stocks euphemistically called 'failures to deliver."