Is your 401K safe from the Democrats?

jackson jambalaya ^ | November 29, 2012 | Kingfish

[prplhze2000]

Suddenly within 24 hours three articles appeared in the NYT, Atlantic Monthly, and Time discussing a Danish "study" about the tax breaks for the 401K plan. Naturally they all discussed whether the government should abolish the tax break for them. What was it they said about never wasting a crisis?

[Former Proud Canadian]

There is no safety in paper assets. There is even less safety in paper assets that are denominated electronically.

This includes stock certificates, bonds, bank accounts, and, in the end, paper fiat money.

There were two huge financial developments last week that got little play in the US press. Mark Carney, head of the Bank of Canada (Canada's central bank) was tapped to head the Bank of England. Carney is a superstar central banker, but it is highly unusual for a reserve currency central bank to appoint a foreign national as its head. Imagine a foreign national being appointed head of the Federal Reserve. Either the B of E is in real trouble or they expect a lot of problems dead ahead, or both. In any case, this is the first time in their 300+ year history that a foreign national has been appointed to head it.

Also last week, the Australian and Canadian dollars have been approved as "reserve currencies". They join the august ranks of the US dollar, the Japanese yen, the Swiss franc, the Euro, and the UK pound.

[Williams]

I’d settle for smart, sincere, bright. I really don’t think we have that either.

[ArrogantBustard]

"The Capitalists will sell us the rope with which we will hang them."
-Vladimir Ilyich Ulyanov

[Little Ray]

They don’t care about a panic. “Eliminating the tax brake” brings in a few billions against a deficit of over a trillion. It doesn’t even amount to a rounding error compared to the national debt.

But if they plunder the IRAs and 401K, there are trillions in there - enough to make a nice one time bump.

BTW: THEY ARE talking about eliminating 401Ks and replacing them with government secured annuities for what this is worth. Naturally, of course, they’ll have to find some way to redistribute the retirment funds to the “poor” to make it “fair.”

[Bon mots]

Hmmm...
We have nearly $90Trillion in debt and liabilities...
The IRS collects $2.5Trillion per year... All of which is now eaten by entitlements...
$5Trillion are in 401k plans - that’s two whole years of IRS income...
Obama voters do not have 401k’s for the most part....

What do you think?

The writing is on the wall...

[taildragger]

In 1999 I was at a wedding with one of the main proponents of Gay Marriage in Hawaii.

I thought he was nuts.

As a progressive they never give up no matter what the cause.

Now Gay Marriage and soon Medial Ganja and after 100 yrs now the start of Socialized Medicine, via Obamacare.

They are like sin, they never stop.

I take this 401k deal as serious as a Heart Attack, they will not stop, they just are getting it going.

Again like a said yesterday, this is also about destroying everything Reagan did to make us more like the self reliant image he portrayed. They must kill the Kemp / Roth 401k to do so...

[Miss Didi]

If John Boehner had a brain in his head, he would pull out of the budget talks, give every Republican congressman copies of these articles, and send them all over the country waving that red flag and declaring THIS is what Obama and the democrats really want, and THIS is why spending must be cut and NOW!

Rush talked about this today...he said it would happen, too.

[justlurking]

BTW: THEY ARE talking about eliminating 401Ks and replacing them with government secured annuities for what this is worth. Naturally, of course, they’ll have to find some way to redistribute the retirment funds to the “poor” to make it “fair.”

I'll make the same challenge I made above: Show me the proposal, instead of hand-wringing from someone with an over-active imagination.

I want to see an actual proposal from an elected Democrat in national office. Not some loony consultant, not some blogger with an axe to grind, and not some radio show host that wants you to tune in to hear what he says next.

Otherwise, stop trying to scare people over something that doesn't exist.

[Washi]

There is a big difference between reducing or eliminating the 401(k) taxbreak and actually confiscating the assets in the 401(k).

Yes there is. That's why it makes the perfect incremental, first step toward the final goal of confiscation.

Just like implementing a law that allows police to issue a citation for an unseatbelted child only after having pulled a driver over for another, primary offense is a first step toward being able to pull over and ticket an un-seatbelted adult as a primary offense.

You have to boil the frog slowly.

[Spaulding]

Republicans have been outmaneuvered, if that is the word, at every turn. The Republican failure to push on voting system integrity, without which elections are a charade, a meaningless ruse, since no counts would have relevance to a scientist or statistician, makes them an enemy of those who wish reform. The Republican party provides the false hope that some group is fighting for Constitutional values. We are effectively a one party nation. Having a Republican party gives the mistaken impression that there is an opposition.

Some presumed Republicans, like McCain, may be fully complicit with current leaders, using the Constitution for cover when it is convenient. It was, after all, Democrats, whose Senate bill 2678 (McCaskill/Obama) and then Senate Resolution 511 (McCaskill/Leahy) in the Spring of 2008, that made it possible for McCain to be Obama’s opponent, since Democrats had thoroughly proved McCain's legal ineligibility, right up through U of Arizona Professor Gabriel Chin's excellent legal analysis explaining McCain's ineligibility (this writer believes there should be an amendment to address McCain's insufficiency, or a Supreme Court interpretation, but none exists today) summarized in the WaPo and NYT>. The fact remains that McCain prevented any questions being asked in Congress about Obama's clear violation of article II, one he never, Obama, never denied. Obama has never once claimed to ba a natural born citizen.

A proposal that seems more and more sensible is for conservatives to join the Democrat party en mass. Calling one's self "independent" assures political impotence. There are Democrats who believe in The Constitution. Hispanics are traditional family types. Asians are architypical capitalists, striving for excellence and, at least in the US, wary of cronyism. Republicans have no hope, with the SEIU counting ballots and managing counting machines in most states, for winning even local elections. Republicans are legally prevented from observing at precincts if race is at issue. The Republican party is a side show. We need to become Democrat party members to change that group “from the bottom up.”, and to use the single party in power to fix our thoroughly meaningless election systems.

[factoryrat]

No, none of your private property is safe now. If the feds can take it away, either by mandate or by force, they will, for the common good.

[ColdSteelTalon]

I remember Biden saying some years ago when he was a Senator that 401k plans and othe retirement benefits are “an asset of the American people”. I am trying to find that quote...

[Little Ray]

Heeeere ya go!

http://money.usnews.com/money/blogs/capital-commerce/2008/10/23/would-obama-dems-kill-401k-plans

[justlurking]

I asked you for an actual proposal by an elected Democrat.

What you cited was a presentation by a loony consultant who claims to be a professor at a left wing university. Do a search on the school name and you’ll find that the place is a joke.

Come back when you have something substantive, like a bill introduced in Congress.

[abb]

While I can’t find a specific bill introduced, it is quite easy to find where congressional committees have heard testimony on all sorts of changes over the past several years.

http://online.wsj.com/article/SB10001424052702304331204577354024207255032.html
April 20, 2012, 4:28 p.m. ET
Congress Eyes 401(k)s Again

http://abcnews.go.com/Business/retirement-401k-plans-senate-finance-committee/story?id=14511959#.ULjQ_Ya8geV
401(k) Plan Revamp Eyed By Senate Finance Committee
By LYNEKA LITTLE
Sept. 14, 2011

http://www.foxbusiness.com/markets/2008/10/31/beware-congresss-threat-tax-ks/
Beware of Congress’s Threat to Tax 401Ks
Written By Elizabeth MacDonald
Published October 31, 2008

So I wouldn’t be too sanguine by saying that “no actual bills have been introduced,” in congress. That is often the next step after hearings.

The threat is real, as elimination of private capital is a keystone of Marxism. Besides, there’s just too much money out there to tempt the collectivists.

[justlurking]

The first article is about the same loony professor that made a presentation to a committee. That was it. And in the ensuing furor, the committee chairman effectively disavowed her proposal.

The other two articles are about the possibility of making changes to the rules for new contributions, such as limiting them for high income taxpayers. There was nothing about confiscation or conversion of existing assets.

My point is there is no serious consideration of what some people are claiming. It is just fear porn to get you to read their blog or listen to their show. Stop falling for it, and stop repeating it.

[WashingtonSource]

This Danish “study” by Marxists at Harvard and in Denmark is pure B.S. It was designed to make it easier to steal your 401k.]

By the way, they call the plans in Denmark “voluntary” when they are mostly a result of union negotiations and, thus, are, in fact, mandatory. Our system is truly voluntary. If the breaks for 401ks are taken away, employers will ditch them.

[abb]

My point is there is no serious consideration of what some people are claiming.

Yet.

It is just fear porn to get you to read their blog or listen to their show. Stop falling for it, and stop repeating it.

Once such proposals get a bit of traction, it will be too late to stop it. There is a considerable body of voters out there who think "asset reallocation" should be done. They're called Obama voters.

If you think such a thing couldn't happen, then it shows you've not been paying attention.

[abb]

I’ve always believed that the way it will be done is to further “means test” social security via some sort of asset test. In other words, if you’ve independently saved and have money to retire on other than SS, then your benefit payment will be trimmed.

While not a direct seizure of 401K/IRA funds, the effect is the same.

[justlurking]

I’ve always believed that the way it will be done is to further “means test” social security via some sort of asset test. In other words, if you’ve independently saved and have money to retire on other than SS, then your benefit payment will be trimmed.

I agree, and think it's inevitable.

Setting aside the problems with redemption of the "trust fund", once it is exhausted in about 2036 (I think that is the latest estimate), there will only be enough payroll taxes to fund about 75% of the benefits that are expected to be paid under current law.

A relatively simple solution that spreads the pain over everyone would be to simply reduce the cost of living adjustment to Social Security by 1% every year, for the next 20 years or so. But, the Democrats demagogue anyone that even suggests limiting the growth of Social Security payments.

My usual diatribe goes like this: I sacrificed my entire working career, setting aside as much as I was allowed into a 401(k) and/or IRA. I put off buying new cars until the old one was no longer cost-effective, I didn't take expensive vacations, I paid off my mortgage, and I have a nice little nest egg.

On the other hand, my next door neighbor has nearly the same job I do. He has refinanced his house and is mortgaged up to his eyeballs. He buys a new car every couple of years and there's a big boat sitting in his driveway. He is always bragging about his exotic vacations, which are financed on his credit cards -- which are all maxed out. His only liquid asset is the cash in his checking account left over from his last paycheck.

Under means testing, this guy will get all his Social Security benefits. But, since I've been responsible and saving for my retirement, I'll get a reduced (or no) benefit so that he can get all of his.

[BTW, the neighbor I describe above doesn't actually describe any of my neighbors. But, I'm sure you know at least one person like him]

However, this is a lot different than claiming the government is going to confiscate your 401(k) or IRA. That's not going to happen. But, what you described is very likely. If and when it occurs, I have plans to counter it.