Posted on 01/09/2010 9:46:42 AM PST by Captain Peter Blood
About a year ago I saw an article about the Argentinean Government proposing a bill that would in effect nationalize all of their 401K/IRA type retirement accounts.
Well as of November, 2009 that has now become a reality, over $29 Billion in retirement accounts have now been seized by the Government and they will use that money to pay down debt.
As I remember the plan the poor owner of that account would get Government issued bonds that will pay between 2 and 3% to replace those monies the government takes. You can read this article from the London Telegraph here: http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/5504137/Argentina_seizes_pension_funds_to_pay_debts_Whos_next/
Now when I read that about a year ago I predicted then that it would only be a matter of time before some “bright” people on the Democratic Party’s Left would see this and think that would be a good idea here.
Well in Karl Denniger’s Market Ticker, dated 1/8/2010; http://market-ticker.org/, there is such an article about plans being made in this country to do the same thing.
The following story is from Businessweek:
Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says January 08, 2010, 10:30 AM EST
By Jeff Plungis Jan. 8 (Bloomberg) -- U.S. investors oppose federal initiatives that would force them to give up control over their 401(k) accounts, the Investment Company Institute said.
Seven in 10 U.S. households object to the idea of the government requiring retirees to convert part of their savings into annuities guaranteeing a steady payment for life, according to an institute-funded report today.
“Households’ views on policy changes revealed a preference to preserve retirement account features and flexibility,” the institute, which represents the mutual-fund industry, said in the report.
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
The institute’s member companies manage $11.6 trillion of assets in mutual funds, including employer-sponsored 401(k) accounts. Some lawmakers have questioned the public-policy value of the tax benefits for people investing in retirement accounts, the ICI said in a report today.
The average 401(k) fund balance dropped 31 percent to $47,500 at the end of March 2009 from $69,200 at the end of 2007, according to a Fidelity Investments review of 11 million accounts it manages. The Standard & Poor’s 500 Index tumbled 46 percent in that period. The average balance of the Fidelity accounts recovered to $60,700 as of last Sept. 30 as the stock market rebounded.
Senator Herb Kohl, chairman of the Senate Special Committee on Aging, proposed legislation on Dec. 16 to require fund companies to do more to ensure 401(k) options are appropriate for workers. The Wisconsin Democrat cited reports that target- date funds designed for people retiring in 2010 invested in high-yield, high-risk corporate bonds.
Representative George Miller, a California Democrat, is advocating legislation to require more disclosure about 401(k) fees paid by investors. The Education and Labor Committee, which Miller leads, approved a bill requiring more disclosure about fees in June.
The ICI survey was based on a telephone survey of 3,000 households from Nov. 20 to Dec. 20 and had a sampling error of plus or minus 1.8 percent.
--With assistance from Theo Francis in Washington. Editors: Tina Davis, Chris Thompson To contact the reporter on this story: Jeff Plungis in Washington at +1-202-624-1835 or jplungis@bloomberg.net. To contact the editor responsible for this story: Rick Levinson at +1-212-617-3377 or Rlevinson2@bloomberg.net.
Make no mistake this is a prelude to a takeover of U.S. 401K/IRA retirement funds. In return for this confiscation of your monies the Federal Government will give you a so called annuity, i.e. worthless bonds, paying you a paltry 2 to 3%. Not even market interest rates for the use of “YOUR” money.
The need for this is obvious for those following the Bond Market. We are deficit spending monies that can’t be sustainable, those countries that have been buying our debt are either drastically slowing their purchases or no longer buying at all. So it is time to tap another source of monies and that is our retirement accounts. The consequences of this are almost indescribable. The effect on the Financial Markets, etc. will be, in my opinion, catastrophic. Use you own imagination.
Those saving for retirement, those hoping to live a dream in the future, etc., will find those things harder to do and plan for with the kind of return being given. But then again with the state of this country’s finances you are basically seeing your hard earned money being thrown down a dark abyss, all for the sake of Government spending.
All told in Fiscal Year 2010 for the Federal Government the U.S. Treasury needs to finance approximately $3.5 Trillion of new spending, not to mention the fact the refinancing of older debt coming due, this will push borrowings to around $7 Trillion plus. With financing options becoming limited the Trillions in retirement accounts look very attractive.
Lets add to this another facet that I believe will emerge also, it won’t be enough that the Government will be confiscating retirement accounts, to keep the game going even further they will find at least one other way to get monies to finance the debt.
That way will be forcing us, the workers, to have a portion of our payroll checks deducted to buy Bonds. Once upon a time many years ago there used to be the payroll deduction program that many companies had in effect so that you could voluntarily have a portion of your payroll check deducted to buy U.S. Savings Bonds. Back then that was a good deal and a nice way to save for your children’s college, etc.. Well now it will be more insidious.
You will see your hard earned money taken and you will be given low interest bearing bonds that will be essentially worthless.
The future right now looks bleak and unless common sense, real Political Leadership emerges we as a country will find all of our savings and built up assets forfeited to the U.S. Government and we will all be wiped out with nothing to fall back on.
Retirement accounts worth trillons in untapped potential new taxes will be way to tempting for dems to pass up
Also it will not be a direct tax on income so the American public won’t know they have robbed until they retire and their nest egg all of a sudden is less than half thought it was
I would join the 401 K at the lowest contribution % simply because it gives you a head start on being vested
...uh ...actually no, vesting has nothing to do with contribution rates, only based on employment date and vesting schedule. You can decide not to save until you will be 100% vested, but you are ALWAYS 100% vested in your contributions and returns, so you should save from day one every dime you have to in order to get ALL of the Company matching, since that is FREE MONEY!! Even $0.25 per $1 match in money market will give you a 26% guaranteed return on your savings... not available elsewhere without much larger risk.... ymmv
They start this sh*t and we need to just start killing liberals. The time to be a candy-assed “get-along” weisel will be over.
I think you'll need something a little more serious than a pitchfork.
Yes it’s time for the revolt to start. I intend to liquidate my account and buy more guns, ammo and Silver!!!
We had to do that last year, anyway - construction related business. We had so little in there, it didn’t matter.
links are in the article. You will have to manually put them in.
I called this in 2008.
I think they’ll be more subtle, though. They’ll claim that new retirees are shocked and made financially unstable because they think they get everything in their accounts and, when they pay taxes, they have far less.
So, they’ll take half the taxes out right away, to reduce the “tax shock” (for our own good, you know, because we’re too stupid).
Once we get used to that, they’ll just say there’s a national emergency and they’ll move all private retirement accounts into the SS account of the holder’s name.
They’ll be able to spend that money as freely as they have squandered our SS accounts.
There is roughly $13 Trillion in investment accounts, yeah they won’t wait for taxes they will take it now and give us an IOU like they did for the Social Security Fund.
I was one of the ones predicting that that would be one of their “offers.”
It’s even more likely if they make the offer after hyperinflation. They’ll give us the dollar amount back, but it will be worth only a fraction of what it was. Most Americans won’t catch on to that, however.
Rather than being so direct as to purchase bonds with the confiscation, I think they’ll first take an early tax out on it (for our own good, because retirees are shocked to find they have to pay taxes on it) and then later roll the rest over into SS, which gives them easier spending access.
One of the ways they’ll “confiscate” some 30-40% of what you have in your account is if you get nervous or “rebel” and take it out, paying the taxes all at once and the early-withdraw penalty on top.
I don’t doubt that this is part of their plan.
The three precious metals I recommend everyone stock up on.
I think part of their plan is to float these ideas to make people panic so that they cash out their 401Ks and IRAs, paying both the tax and the penalty. If they can make a lot of people do this, they would get a nice spike in revenue.
If you take your money out, I’d convert quite a bit of it to any of the three precious metals (gold, silver, lead). Because when you dig it up the cash won’t be worth a fraction of what it is when you bury it.
Make no mistake whatever is being said in Public is not what is being said in Private. This is a very Far Left group that is rooted in Marxist Orthodoxy.
It’s all but a prelude to something else and will be presented in manner designed to fool us all.
The U.S.S.A. will confiscate your 401k and provide a graduated anninuity distribution until you die (later to fix the anninuity to a maximum allowable amount), then seize the remaining balance and provide wealth redistribution for those too stupid, too irresponsible, or poor to plan for their own retirement for themselves. 3rd plank of communist manifest: Abolition of all rights of inheritance.
We will be screwed -- comrades!
What’s the link to Stephen McIntyre’s original article?
Delay and deny!
Couple this with the new modified 2010 income tax tables and health care cost the standard of living in the US will dramatically decline in the very near future. With the Federal government sucking all available funds out of the economy to expand and fund new programs unemployment will remain high and families will continue to struggle to survive.
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