Class Warfare's Next Target: 401(k) Savings by Newt Gingrich and Peter Ferrara
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.
This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "'Choices' have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your 'retirement' money to buy them."
Moreover, benefits based on Treasury bond interest rates may be woefully inadequate compensation for your years of savings. As Denninger adds, "What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI inflation index) so as to guarantee that you lose over time compared to actual purchasing power."
This proposal follows hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on "redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute," as reported by InvestmentNews.com.
The hearings examined a proposal from professor Teresa Ghilarducci of the New School for Social Research in New York to give all workers "a $600 annual inflation-adjusted subsidy from the U.S. government" in return for requiring workers "to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration."
"But I don't want to go among mad people," Alice remarked.
"Oh, you can't help that," said the cat. "We're all mad here. I'm mad, you're mad."
"How do you know I'm mad," asked Alice?
"You must be," said the cat, "or you wouldn't have come here."
Virtual Mirage - What's on the other side of the mirror? Ask Alice how deep the rabbit hole really goes.
This blog is an extension of MY JOURNEY because sometimes my journey needs more explanation, and sometimes there is more to be said than can be expressed on one ordinary blog.
Sometimes it's politics (very serious), sometimes I address the human condition with a dose of humor, and other times it may seem as if the track is headed in a unique direction. I can be a complicated guy at times.
There are a few things you'll find I consider:
* Absence of proof is not proof of absence.
* Sometimes the questions are complex but the answers are simple.
* Love is the only condition where the happiness of another person is essential to your own.
* Steers do not sign treaties with meat packers. (think on that)
* Taxes are NEVER levied for the benefit of the taxed.
* The purpose of fighting is to win. There is no victory possible in defense.
WHITE POWDER (Novel)
There is something intoxicating about a secret.
THE OLD WHORE (NOVEL)
In the peculiar culture of the Central Intelligence Agency, "old whores" are people who will do whatever it takes to get the job done, irrespective of the cost.
EXILES FROM EDEN (NOVEL)
Sparks fly as two star-crossed lovers meet. He runs toward trouble as she yearns for something missing. And it ends in a flight from and toward justice.
Today, I balance work and play as much as anyone can. All things remaining equal, play is more important. Life is short - it's important to make every day count for something, if only to yourself.
I'm a former tinker/tailor/soldier/sailor who has now decided that maybe it really wasn't all done for nothing.
This site contains copyrighted material, the use of which may or may not have been specifically authorized by the copyright owner. Such material is made available for educational purposes, and as such this constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Act. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.