The Democrats want your 401K

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The Democrats want your 401K

Postby Haggis@wk » Mon Feb 22, 2010 10:34 am

Argentina showed the way in 2008, by nationalizing private retirement funds on the ground that "the private system never achieved what was needed."

Now, the Democrats may be poised to imitate Argentina's theft. Investor's Business Daily reports:

You did the responsible thing. You saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. But now Washington is developing plans for your retirement savings.

BusinessWeek reports that the Treasury and Labor departments are asking for public comment on "the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams."

In plain English, the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.

They will tell you that you are "investing" your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.


Even as a ”voluntary” effort I doubt whether people will buy into it. Does that means the next step would be “involuntary” (for our own good, of course)? Are the Democrats that tone deaf or is this a strategic decision? If they went ahead and did this regardless of what happened to the Democratic majority we, the people, would be forever dependent on the government, whoever was in office.

Personally, I don’t think this will come about for several reasons, the main one being the contemplative congressmen and women imagining the literal (not figurative) sight of congressmen and women swinging from streetlamps, or the smell of warming tar, at the very least.
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis De Tocqueville 1835
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Re: The Democrats want your 401K

Postby dai bread » Mon Feb 22, 2010 9:47 pm

...or the smell of warming tar, at the very least.


That is something I would very much like to see, and not only in the U.S. The sound of chickens being plucked would be good too.
We have no money; we must use our brains. -Ernest Rutherford.
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Re: The Democrats want your 401K

Postby analog » Wed Mar 17, 2010 10:41 pm

Guaranteed Retirement Income Bill Legislation Likely in 2010

See full article from DailyFinance: http://srph.it/bwB2GH

...........The key proposal to look for this year is the Retirement Security Needs Lifetime Pay Act, sponsored by U.S. Reps. Earl Pomeroy (D-N.D.) and Ginny Brown-Waite (R-Fla.). The act advocates tax breaks for the increased use of annuity products that pay income throughout retirement. Retirement experts also anticipate the reintroduction of the Automatic IRA Act of 2007, which would require small- and medium-sized businesses to automatically enroll their employees in an Individual Retirement Account.



the bill is here:
http://www.govtrack.us/congress/billtex ... =h111-2748

it is almost unintelligible as it just amends sections of IRS code giving extra tax breaks for retirement accounts that invest in annuities, as stated above .
That'd be a windfall to insurance industry.

I saw no mention of compulsory conversion of existing accounts. Yet.
Probably that'll be done later by some bureaucrats with an innocuous name like "Consumer Protection Agency".

imagining the literal (not figurative) sight of congressmen and women swinging from streetlamps, or the smell of warming tar, at the very least.

Your word picture left out sound, as Dai noted. I suggest the whish-chunk of a guillotine.

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Re: The Democrats want your 401K

Postby Haggis@wk » Wed May 12, 2010 10:41 am

INVESTOR’S BUSINESS DAILY: Coming After Your 401(k)?

“Democrats have obliquely admitted they covet Americans’ pensions. Last week, congressional Republicans told them to stay away. The shame is that they had to do anything at all.”
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis De Tocqueville 1835
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Re: The Democrats want your 401K

Postby Trumpetmaster » Wed May 12, 2010 12:11 pm

Haggis@wk wrote:INVESTOR’S BUSINESS DAILY: Coming After Your 401(k)?

“Democrats have obliquely admitted they covet Americans’ pensions. Last week, congressional Republicans told them to stay away. The shame is that they had to do anything at all.”




"The idea," they said, "is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.
"They will tell you that you are 'investing' your money. ... But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds."

This is outrageous and should not be done. The 401K will hopefully only be a "component" of $$$ when I retire. I don't trust the government based on their track record, and wish to be in control of my own investments.....
Ability is what you're capable of doing. Motivation determines what you do. Attitude determines how well you do it.
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Re: The Democrats want your 401K

Postby dai bread » Wed May 12, 2010 6:30 pm

When I was working in a life assurance company, it was considered, even by the staff, that purchasing an annuity was worse than purchasing endowment policies. I see no reason why a Government scheme would change this.

Our pensions are paid directly from current taxation. That is expected to change in a few years time when a fund the previous Govt. set up starts producing real dividends. It's doing pretty well so far, but it's not yet big enough to make serious inroads into the demand on taxes.
We have no money; we must use our brains. -Ernest Rutherford.
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Re: The Democrats want your 401K

Postby Shapley » Wed May 12, 2010 7:12 pm

dai bread wrote:When I was working in a life assurance company, it was considered, even by the staff, that purchasing an annuity was worse than purchasing endowment policies.


Annuities are very popular with charitable institutions. You give them a large sum of money, they pay you a portion of the interest from it until you die, and they keep the principal. You do get a tax credit for the donation, though. Most major charities and many policitical organizations offer them. I suspect there would be fewer of them if they weren't producing lots of money for the fund beneficiaries.
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Re: The Democrats want your 401K

Postby Shapley » Wed May 12, 2010 7:18 pm

Another factor to keep in mind will be the government's desire to mandate 'socially-responsible investments', which is to say investments of which they approve. Private fund managers usually investe where the money is found. The government, however, likes to mandate investment in things most investors stay clear of: Inner city development projects, alternative energies, clean-energy cars, etc. Several state-run pension plans have tried 'socially-responsible investment' mandates, and the consequences have been severe. They will be no better if the federal government is in charge.

I seem to recall Jesse Jackson arguing for mandatory investment by pension-fund managers in 'socially-responsible investments' back in the '90s. I'm sure the idea is still out there. Let's face it, there's no more money in the government's coffers to fund these things, and they don't want to abandon them...
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Re: The Democrats want your 401K

Postby analog » Wed May 12, 2010 7:23 pm

There's a precedent for this in mythology. 'Government devouring its children.'

Image

well actually it was Saturn.
Goya’s famous work ‘Saturn Devouring His Son’ is a depiction of the Roman myth of Saturn. Saturn feared that his children would eventually supplant him and to prevent this, he ate each of them shortly after their birth.


they want us all dependent on Big Brother.

grumble & mutter icon. Keep your powder dry.
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Re: The Democrats want your 401K

Postby Haggis@wk » Mon Jan 03, 2011 12:30 pm

If this happened here, i hope that politicians would be swinging from lampposts:

Nationalizing Private Pensions In Europe.

And this time, not metaphorical lampposts, either
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis De Tocqueville 1835
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Re: The Democrats want your 401K

Postby analog » Mon Jan 03, 2011 7:42 pm

I haven't seen much in the news about it lately.
Last year Teresa Ghilarducci was in the news a lot, in fact she gave Congress a big presentation on the merits of nationalizing 401's into Gov't Retirement Accounts.
The silence has me worried.

Be alert for propaganda on GRA's.

a. :soldier:
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Re: The Democrats want your 401K

Postby Haggis@wk » Wed May 11, 2011 4:00 pm

Ireland is broke.

Ireland is seizing private pensions.

The United States is broke.

QUESTION: Do you really think that Roth IRA/401K is going to stay tax/government-free?
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis De Tocqueville 1835
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Re: The Democrats want your 401K

Postby Giant Communist Robot » Wed May 11, 2011 6:37 pm

The United States is broke.


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Re: The Democrats want your 401K

Postby jamiebk » Fri May 13, 2011 10:03 am

Haggis@wk wrote:QUESTION: Do you really think that Roth IRA/401K is going to stay tax/government-free?


They are not "Tax free"...you pay the taxes when you withdraw funds. IRA's are deferred tax plans
Jamie

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Re: The Democrats want your 401K

Postby Shapley » Fri May 13, 2011 11:35 am

jamiebk wrote:
Haggis@wk wrote:QUESTION: Do you really think that Roth IRA/401K is going to stay tax/government-free?


They are not "Tax free"...you pay the taxes when you withdraw funds. IRA's are deferred tax plans


I believe I mentioned a while back that many retirement planners are now recommending pre-taxed plans in lieu of tax-deferred plans because of anticipated tax rates on retirement income.
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Re: The Democrats want your 401K

Postby piqaboo » Fri May 13, 2011 12:13 pm

IRA - pretax dollars, not taxed til withdrawal
Roth IRA - post tax dollars, not taxed on withdrawal.
Always seemed the better bet to me, since I never believed my old-age taxes would be lower than my middle year taxes.
After all, by then I expect to have the mortgage paid off, aside from whatever happens to tax rates.
Altoid - curiously strong.
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Re: The Democrats want your 401K

Postby Haggis@wk » Fri May 13, 2011 1:34 pm

My fear has been that the tax deferred advantage, regardless if it is front or rear ended, is too much of an advantage for those looking for new additional and novel sources for tax revenue. Ten years ago I would have scoffed at the idea that an American government would buy up an American car company, much less consider replacing my 401K or IRA with government bonds. Now, I'm not as confident as I might have once been.

I am somewhat comforted that the Republicans control the house and would probably probably resist such an attempt.
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Alexis De Tocqueville 1835
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Re: The Democrats want your 401K

Postby Giant Communist Robot » Sat May 14, 2011 1:49 pm

Ten years ago I would have scoffed at the idea that an American government would buy up an American car company


For a real shock read what the books by Bernanke and Paulson say about AIG. Talk about moral hazard!
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