sunset from behind the wire

sunset from behind the wire

Wednesday, February 17, 2010

Buy RECOVERY BONDS!



Class Warfare's Next Target: 401(k) Savings by Newt Gingrich and Peter Ferrara
(repost)

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."

3 comments:

  1. Will the outrages never cease? Sounds like the thieves are eyeing the hard-earned cash put away by America's Workers.

    Punish hard work and savings and you will get neither.

    And that is exactly where they want us. Dependent on government and poor.

    ReplyDelete
  2. Social Security has completely failed and by ALL accounts (including Democrats) is headed for insolvency. Soc. Sec. is a ponzie scheme the way all pension plans are, however the money is NOT segregated. It was put into the General Fund of the US, allowing them to use the money people contribute on a weekly/monthly basis to meet the daily demands of government with no attention at all toward meeting their obligations...."the next administration can tackle that one" is a worn out refrain.

    Now they want to re-invent the same broken wheel.

    ReplyDelete
  3. If you can't believe the government, who can you believe?

    ReplyDelete

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