Posted on 05/28/2010 1:39:34 PM PDT by blam
Is America About To Start Bailing Out Private Pensions?
Damien Hoffman
May 28, 2010, 3:25 PM
As if authentic capitalism hasn’t been mauled enough, Congress is now considering a bailout of private pensions. Excuse me for asking such a simple For those unaware: every investment — even US Treasuries — possesses risk. Hell, there is no guarantee the Earth will exist tomorrow. So when exactly did people become disillusioned that their pensions would pay out 100% on the dollar? Social security — the largest Ponzi Scheme in history — may not even pay out in full.
We have a problem of the masses misunderstanding risk. This was also evident in 2008 when money market funds “broke the buck” and the masses believed money markets were risk-free. Well spread the word: there is no such thing as risk-free. Risk-free is a fairy tale character living in the same Platonic realm as unicorns, Santa Claus, and zero calorie chocolate cake.
As lawmakers lay the groundwork to bailout private pensions in an effort to win favor among ~10 million Americans, let’s pause and meditate on three horrible consequences:
1) Taxpayers will now be on the hook for “make-whole” payments on private sector investments and companies. And we’re not talking about payments that are needed to save us from the Great Depression. We’re talking about bailing out people who don’t want to accept they do not have a Constitutional right to investments (i.e., pensions) working out as planned. Beyond diversified portfolios underperforming, everyone must also understand there is no Constitutional guarantee that a company exits forever. If your pension contains 10% of your former employers stock, and that company goes out of business during the natural evolution of capitalist society, then the stock goes to zero. That’s the cold hard reality.
[snip]
(Excerpt) Read more at businessinsider.com ...
Look out 401(k)s and IRAs..............
Is America About To Start Bailing Out Private Pensions?
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America About To Start Bailing Out Private Pensions.
Or...it depends on the meaning of what IS, is...
I am so sick of dirty politics it IS making me ill.
I think he should bail me out so I can live in a manner that I wish to become accustomed. Sounds good to me. I could be his poster child for the first conservative to accept his money. He can take it from his stash.
“Look out 401(k)s and IRAs............”
Oh I can see it now... the PBGC needs to get more money somewhere....why not guarantee everyone’s 401k and IRA - for an annual fee, of course.
I never thought of this approach, I gotta admit, the sneaky buggers will go after any dollar they can find.
Disillusioned??
Treason, creating two classes. The insiders that are government thugs and outsiders who are left penniless.
I believe the plan is to absorb all the IRA's and 401K's and then dole them out as an adjunct to Social Security.
In the short term it would prop up the failing pension plans of the public unions and the long term it would replace Social Security.
The govt. would essentially become the owner of everyone's retirement plan.
Socialism is here.
Only the union pensions will be bailed out. They don’t really want to help old people in general... but then, many of the union retirees, especially those that were government employees, are relatively young!
“I believe the plan is to absorb all the IRA’s and 401K’s and then dole them out as an adjunct to Social Security. “
No, I don’t think they’d be that blatant - they could take it easier through inflation by just printing money, but if they charge a “fee” for “insuring” it, they can tap into the money quickly for recurring revenue, then raise the fee by blaming the “greedy investment houses” until they decide to “save” us all by absorbing it.
It’s not much much difference from what you’re saying but the subtlety of providing a “service” for the fee, and the psychology of combining 401k’s and retirement plans in peoples minds...(that way folks couldn’t get “too much” if they had a 401k AND a retirement plan with a PBGC backstop.
I dunno, just thinking out loud so to speak.
No, I don’t think they’d be that blatant - they could take it easier through inflation by just printing money, but if they charge a “fee” for “insuring” it, they can tap into the money quickly for recurring revenue, then raise the fee by blaming the “greedy investment houses” until they decide to “save” us all by absorbing it.
Yet, that is the plan as it has been presented. It's not a bill or anything that far but the plan has been proposed as I described.
“Yet, that is the plan as it has been presented. It’s not a bill or anything that far but the plan has been proposed as I described.”
Yes, I do realize that - but the blatant “seize and merge” will cause people to take arms against the government. The “regulate-blame-merge” strategy might actually succeed in stealing these assets if properly spun by a diabolical politician.
Okay, I see your point.
On the other hand, when I tell my wife what is going on in this country she says, "They would never do that. The people would go crazy!" Then I tell her "They've already done it!" she just looks at me like I'm crazy.
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