Coming Soon: Substituting Government Annuities for Your 401(k)?
This raises more than a few questions. Why annuities, for instance? As noted later in the article, “Seven in 10 U.S. households would object to a requirement that retirees convert part of their savings into annuities,” and the “why” of that opinion isn’t that hard to figure out: they’re a bad deal for everybody except the guys selling them. Consumer gurus like Clark Howard have been warning people away from high-commission “guaranteed” annuities for years. I bet everyone reading this knows of somebody who’s been ripped off by an annuity salesman.
But now … now the government would be the annuity salesman — except that if the administration gets its wish, there won’t be any “selling,” you’ll just be forced to take the money you’ve earned and “convert” it to a construct that they’ll allow you to “invest” in. No more of this willy-nilly mutual fund nonsense for you plebeians; we’ll tell you how you’re going to pay for things, so hand over the cash — it’s your patriotic duty!
It would be plenty bad enough if the “guaranteed” government annuities were limited to bailed-out insurers like AIG. But Karl Denninger of The Market Ticker took a deeper look and found an even scarier outcome. Denninger believes this is really a scheme to prop up the market for Treasury bonds by forcing citizens to “invest” in them.
As Denninger points out, “Forcing people into Treasuries as an ‘annuity’ is exactly what Social Security allegedly is. Except that Treasury stole the money that was collected in FICA taxes and spent it!”
And he’s right. The fictitious “Social Security trust fund” is just a pile of Treasury notes. If we’re all forced to buy trillions more of them — because the government has over-borrowed so dramatically that nobody else will — all we’re going to get in return are more IOUs with nothing backing them up but the promises of politicians.
Those politicians will be retired themselves — on rich taxpayer-funded pensions that you and I aren’t eligible for — long before the IOUs come due. But they’ll have taken your money to pay for their games, and if you think you’ll be getting it back, I have some oceanfront property in Atlanta that you might be interested in.
For those who consider this to be paranoid ravings — exhibit A, Argentina: http://online.wsj.com/article/SB122460155879054331.html
If the Dems feel the need to screw with 401k accounts, it could very well lead to greater backlashes against them, making the Tea Parties of the past seem like quiet afternoon chats with friends.
As I noted in my blog post discussing the previous plan to eliminate 401k tax breaks, “When Ronald Reagan was elected in 1980, less than 20 percent of American households owned stock directly. Today, 50 percent of households own stock and two-thirds of all voters in the past elections were shareholders.”
That’s from Grover Norquist’s book.
Screwing with the 401k is a bad idea. But should we stop them? I could lead to a huge backlash, and a Republican Congress could overturn the changes made by this Congress.
Thoughts?
Not to mention what this would do to the stock market, with all the mutual funds tied up in stocks, bonds, etc. of corporations. Just take all the money out of there and put it over here. What are these people thinking? There won’t be a Democrat left standing if this is implemented. People worked hard for that money and to have it stolen by these clowns (or any clowns) is just way beyond what people will put up with. Not only do they want control of your health care, they want control of your retirement, so they can tell you what to do at every point. Can you imagine your life being completely controlled by morons in Washington? I don’t advocate violence, and this is not something I would do, but I can see where some people would be picking these guys off with high powered rifles as they walk out of government buildings. That’s how bad it is.
Our Congress critters got a small taste of unrest with their policies from the health care town halls and tea parties. If those scum bags in want to see what hell really is like just try to f–k with my retirement account!
I was never stupid enough to believe them when they told me that I would collect a dime back from my social security contributions made throughout the entirety of my working life. For that very reason, I have been diligent in growing my tax deferred retirement accounts. I couldn’t say how drastic my reaction would be to such a swindle of my life’s savings. All I know for sure is that it will not be pretty.
I know that the Dems have had their eyes on the enormous amount of money that is in 401K accounts for some time, but each time they start to seriously consider making a move on it, inner warning bells have gone off, protecting them from their worse intincts.
It is said that conservative is a liberal that’s been mugged, if the Dem’s make a move on 401Ks, they will be mass mugging the entire population. Nobody I know looks at their 401K and thinks of it as anything but their own hard earned savings, how politicans could look at that same money and see anything different is beyond me.
A friend of mine is fond of saying “When you are mad at the government, get your gun and run out on the front porch. Look around, if you are the only one on your porch with a gun, go back inside.” If they make a move on 401Ks, we’ll all be out on the porch.
I’m still reeling that Obama is making speechs about a “fee” on financal institutions to “pay back” TARP, as that is only fair to the American people. Never mind that many of the institutions that will be paying the fee, never took any TARP Money, like that’s fair in any way. Why is Obama so interested in getting “TARP” money repaid? Because it’s his personal slush fund. Mark my words – Obama doesn’t want the US treasury repaid – he wants the TARP fund repaid, he doesn’t need Congress to spent TARP funds. Hell yes he wants that money repaid – that’s “his” money.
On 7 October 2008 one Professor Teresa Ghilarducci testified before the Senate Finance Committee on dealing with the long-term funding of Social Security. One of her “ideas” was to “encourage workers to ‘voluntarily’ convert their IRAs and 401Ks to government-subsidized annuity accounts.” Or in other words (since we all know what “voluntarily” means to Congress), the government should simply confiscate those funds for its own use.
Every “initiative” we see from the “progressives” comes down to (Step One) them taking something from us, usually by force (laws, and Acts of Congress, count as “force”- after all, they can imprison you if you don’t go along), with the empty promise that they will somehow (Step Two) “add value” to it and give us something better in return. Except that they never get around to Step Two.
And if anyone complains, they quickly find out that Step Three is; Shut Up and Sing- Or Else. (This is where the “force” part really comes in.) The “and Sing” part is especially egregious, in that “progressives” not only lust after absolute power- they demand worship along with it.
Many progressives (as seen above)make no secret of their contempt for the “common herd”. While simultaneously demanding unconditional love from same. And the contradiction not only doesn’t register on them, they deny that it even is one. They just maintain that other people are too stupid to understand how brilliant they really are. And how “subtle” and “nuanced” all their dogmas are as well.
Maybe “progressivism” really is a mental disorder.
clear ether
eon
If the Gore Apocalypse comes to pass, you may actually have some oceanfront property in Atlanta!
This is the worst idea I’ve heard out of this administration yet!
12 trillion dollars of debt is NOTHING compared to government-mandated retirement ages supported by taxpayer dollars. I say government-mandated because whey they control the retirement accounts, they can tell you when you can retire (and what standard of living you will enjoy while you are retired)! How are we going to like having to work until we are 77 before we can see the first dime? How about the day when the government cannot keep up with the payments and they decide to hike the age to 80, or 85?
If they get away with this, taking over other savings options will not be far behind! The law of unintended consequences cannot be repealed! If the government owns the people’s savings, the people (who mostly understand what will happen to them if this goes through) will look for alternative vehicles to put their money in. The government will have to either co-opt or outlaw those to ensure the revenue stream they create. And what happens to the economy due to the loss of that capital inflow?
This idea is so bad I don’t see how it could ever be initiated. However, a year ago I would have said the same thing about a government takeover of GM, or a 780 billion dollar stimulous package, or…
Yeppers, and just like social security funds, our 401K money will be dumped into the government general fund and spent well before we retire. So not only will there be no social security payments in the near future, all our 401K will be gone too. Such a great idea. (sarc)
It’s all a matter of who you trust with your money. Contrary to your glib stock market analysis, the small investor is NOT coming back. It’s the big players, using taxpayers money who are back in there like a dirty shirt. The average person will not likely trust equities for a very long time, given the the sense of venality they have become aware resides on Wall Street. The average person might not be stupid, but they can be tricked by experienced glorified gamblers, and knowledgeable predators. The government HAS paid pensions as they were expected to (at least up until now), but Wall Street is seen as a place that will rip you off, and can lead to your losing everything, without any recourse. My wager is on the government.
The aggregate worth of all those 401K and IRA accounts is several trillion dollars. The government would effectively confiscate that and blow through it in at most a few years. It would represent the biggest theft since kicked the Native Americans onto reservations. This is the kind of thing that could end up with politicans hanging from lamp posts, and I’d be willing to donate some rope to the cause.
Millions of people like me have no pension. All we can count on is the money we invest in our 401Ks and IRAs because there’s little confidence that Social Security will survive, at least in its current form. If this goes through, then all that sacrifice we’ve made for years to build retirement savings would be for nothing. We’d all be chumps.
As for why they want to convert the money to annuities, the answer is simple: when you die, any money left in the account goes to the party issuing the annuity. IRAs and 401Ks are part of your estate, so it’s harder for the government to get its grubby, greedy paws on it.
The social security trust fund has to be stolen; it cannot be saved without reducing the money supply.
In general the government has to instantly return to the economy every dollar it takes in.
In short, social security is a general revenue tax like any other, but superior to most in being a flat tax. They ought to remove the upper SS limit and eliminate the income tax, if you want an improvement.
The SS is already an inflation-adjusted annuity; which might be hard to purchase privately because you have to bet on the health of this or that company over 30 years, which isn’t a sure thing.
I don’t know how you’d convert 401k’s though. Who is going to buy all the stock?
Plainly it’s a money grab and that’s the end of it. Anyway it’s a money grab if they can liquidate the 401k’s somewhere.
Know what? I got a better idea. Let’s put everybody’s social security into the stock market. I’m sure it’s safe investment.
Know what? I got a better idea. Let’s put everybody’s social security into the stock market. I’m sure it’s safe investment.
Historically, even with the ebbs and flows of the stock market, most people under 60 will realize a far greater return on their investment in the stock market than they’ll ever see from Social (In)Security. And what they have is theirs to keep, unlike Social (In)Security.
Skeeziks,
I have a fine idea. Let’s let people decide for themselves what level of risk they are comfortable with and act accordingly. That’s how things are done in free countries.
Duane Lester,
“Could” is not even in the same zip code as “would.” If you trust the current GOP to run to your rescue from overreaching government, you must have just emerged from a decades long coma.
I want to make sure everyone understands that the Dems are not just out to change the 401k system for future contributions and ‘giving you access to new options”, what they want to do here is CONFISCATE your existing accounts.
Yes, you heard me right. C-O-N-F-I-S-C-A-T-E.
People keep asking “how are we going to pay for all this debt?” well someone has just come up with an answer.
Its coming out of your end.
Jeez, skeez, how lame can you be to try to make an immoral, horrible idea like government confiscation of private wealth look not horrible by bringing up a completely unrelated proposal that you think is even more horrible. Are you really that brainless and irrational?
Skeeziks,
I’m sure that was meant to be a clever and witty rebuke to privatization advocates, but consider: at the worst of the market crash, 401k values were down about 40%, and most are back closer to level today (mine is actually up a skosh). Relative to that, according to projections a couple of years ago, by the time I retire, I’ll get 70% or so of my currently promised Social Security benefits. After the spendfest of the last year, probably 60% is an optimistic adjustment to that projection. So, if you give me my full benefits now and I put them in a mutual fund, and the market craters again right when I turn 65, I’m about back to even.
Sign me right the heck up.
skeeziks thinks he is making some kind of sarcastic comment, but he is wrong. If we had private accounts for Social Security, it would be straight forward to have a substantial portion in stock market when someone is young and gradually move to, say, a 75-25 split with bonds. In any case, we already have annuities with Social Security and maybe a corporate pension. We need growth in retirement, too. That comes from assets like stocks.
And China owns us.
Safer than the US Government. Indetured servitude if not outright slavery.
Social Security is an annuity – the risk was assumed by the USG – when risk is removed from an individual –
Sometime in the late 80s, the WSJ had an article about how our elected officials didn’t like 401ks – the money put in them at that time was huge and they couldn’t get their greedy paws on it.
SS is an annuity – it’s broke. So by all means – let’s try it again.
Taking the caps off won’t do anything, doesn’t Buffet only make about $100K/y in salary?
This would be major restructuring of the code.
The Clinton Administration first floated such a proposal, albeit in modified form. Don’t remember the details but it involved not substitution/conversion so much as outright confiscation of, IIRC 10% of principle existing NAV and some per-centage of take on both future contributions and withdrawals alike.
It’s the standard socialist search for “other people’s money” that Margret Thatcher railed against. One can see the statist, socialist cum neo-Marxist-Lennist philosophical viewpoint which justifies such money grabs of pvt income & savings in the terminology used in Congressional budgetary hearings when the use of the term “tax-expenditure” is used to describe anything in the tax code which allows one’s income/investments/savings to go un-taxed, i.e., which allows one to have ANY money whatsoever not controlled by the State. This view which the term “tax-expenditure” underscores, holds that ALL money, produced by it’s citizens from whatever source, is really the government’s anyway–they are just by their good graces deigning to allow you to keep some. This view, after all, was the view of Obama’s Father–an un-reconstructed Communist who, as a Govt bureaucrat authored an economic proposal for the Govt of Kenya which promoted the view that Govt confiscation of ALL private sector produced income/wealth was justified as long as the Government returned it in the form of govt provided services in housing,
transportation, food, etc.
And we should be surprised that such a proposal would be floated in an Obama Administration? How does that old saying go?: “The Apple doesn’t fall far from the tree…”
“Know what? I got a better idea. Let’s put everybody’s social security into the stock market. I’m sure it’s safe investment.”
I’ll take the stock market in heartbeat over the Social Security Ponzi Scheme. You DO know what a Ponzi Scheme is, right? You DO understand the similarities between the two constructs, right?
So why do you think any sane person would object to moving their money out of a Ponzi Scheme and into the stock market?
Starting with 2010 refunds, taxpayers will have the option to take their return in US Savings Bonds instead of cash.
Let’s see how many do it…and then watch as the plan becomes mandatory?
Hoosierhawk (5#) has it right – Those politicians have been looking at that big pool of 401k money for years and just drooling to get their hands on it – to spend it.
When income taxes no longer provide enough lucre to satisfy the government, it will turn to excise taxes, consumption taxes, use taxes, nuisance taxes of all kinds, and eventually the big goal – wealth taxes. A raid on 401k accounts would be a first shot in the war to confiscate private wealth.
Face it citizen, the government is possessed of an insatiable and rapacious desire to consume the fruits of your labor. The only remedy is to make it smaller and keep it small – and watch it like a hawk, 24/7. It’s the price of freedom.
The Democrats have been wanting access to people’s 401K’s for some time; however, Republicans often kept the Democrats in check. With super-majorities in the House & Senate, this is not possible. The Left is running wild, unchecked, like some teenage drug addict looking for more drugs.
If they thought the ObamaCare protests were bad, the 401K protests will be even worse. Look for the Democrats to do this under the cover of darkness where mold needs to grow & vampires sleep.
I need 18 months to get to my IRA without tax penalty, just 18 months. The problem not mentioned is inflation. With the government printing money like mad, any fixed payment annuity is a scam, a way to reduce the value of all that 401K money over time and let the government spend all they steal.
If this appears to stand a chance, I will liquidate my IRA’s AND pay the penalty but at least have the 70% that remains, unlike a gutted and inflation bound fixed annuity that I will not see for a very long time and then diluted by inflation to a joke.
It would be much easier to replace Geo Miller and Jim McDermott…….
Hopefully Scott Brown will win in MA and help quash some of this.
The sad truth is they don’t even need to go this far. There are plenty of tweaks they can (and, eventually, will) make to 401ks to get their paws on that money short of outright conversion (higher income taxes when you finally do the withdrawals being a sure bet). Are you 100% confident those Roth IRA distributions are going to be tax free some day? All it takes is one act of Congress to change that.
Seriously question the conventional wisdom posited here that liberals hate the idea of 401ks. 401ks, unlike pension plans, let people opt out of preparing for their retirement. This will leave millions of people completely dependent on social security upon retirement becuause they “just couldn’t afford” to contribute to their 401ks while they were working.
Check out the average US 401(k) balance. Frightening.
These “ideas” the Treasury & Labor depts are sounding out are pretty much a done deal in my estimation. They are going to need to create a new market for T-bills for at least 2 reasons:
1) China has stopped buying T-bills (and worse yet, may start selling them)
2) Social Security will need to “cash in” some of their IOUs in the very near future as payouts start to exceed FICA collections
If they don’t find a new market (i.e. suckers like you & me) then they will be unable to sell T-bills at anything less than an astronomical interest rate, with grave repercussions on inflation & the economy.
And, yes, I consider Argentina’s example as a bellweather.
I don’t advocate violence, and this is not something I would do, but I can see where some people would be picking these guys off with high powered rifles as they walk out of government buildings. That’s how bad it is.
I WILL advocate violence if there’s no other way to stop this banana republic madness.
Speaking as a financial professional, the author is overgeneralizing quite a bit. His rant seems to be aimed mostly at unprotected, unguaranteed variable annuities – which, frankly, are a BIG open-ended bet. At the same time, he likes 401Ks…which, when you dabble in the market, face just as much exposure as those evil no-protection, no-guarantee variable annuities.
The reality 401Ks are not the be-all and end-all of retirement funds. They have some significant weaknesses as well as strengths.
Moving your money from a 401K to an annuity (ESPECIALLY) one with a floor, a guarantee, and bennies, can make a lot of financial sense, esp. if it’s providing stability into the bargain. There are some annuities, for example, that provide a guaranteed cashflow for life, even after the cash value account has been drained dry. Not a bad deal, eh?
But it’s a case-by-case thing. Which the author seems Not To Get. If he’d kept his rant to government-sponsored retirement funds, he’d be much more on target. Instead, he drug out the broad brush, and now he’s out in the wilderness.
Democrats lie and steal.
No one has stopped them yet. Stealing our 401k will fund acron, government pensions and allow the government to take over more businesses. Think of all the newspapers Obama can fund.
“But Karl Denninger of The Market Ticker took a deeper look and found an even scarier outcome. Denninger believes this is really a scheme to prop up the market for Treasury bonds by forcing citizens to “invest” in them.”
Why is everyone so surprised? This is exactly how Obamacare is going to work!
This is the Dem’s Plan B… for when the Chinese stop buying our debt. See http://thirtysecondthoughts.blogspot.com/2010/01/plan-b.html.
John Skookum @31, I’ve said it before and I’ll say it again; Excercise your 2d Amenment Rights and get ready.
There is no other way this is going to be stopped. The electoral process is completely broken. The Republic is falling right before our very eyes!
Spring of ’11.
26. BINGO! Nobody with any sense is going to allow the government to confiscate their 401ks and IRAs. They’ll liquidate them, even if it means forfeiting half of their value to taxes (35% Fed Income+10% penalty+State taxes). They’ll do this because they don’t trust the government to pay off on its promises, and even so, they can still salvage their savings.
32. The difference is that most annuities are sold by life insurance companies. They have to run a profitable business, and they tailor make an annuity for your level of risk tolerance and life expectancy. The government, by contrast, will use ham handed and political decisions, rather than market and actuarial based decisions, to administer your annuity. Also, a life insurance company will invest the money you pay them in order to generate the cash flow to pay your benefit. The government will spend it all now and hope that “new investors” will bring in enough cash to pay off existing claims.
Oh yah, this will win votes for the Dems. I’m beginning to think there are TWO ‘Stupid Parties’.
Wait one!
Isn’t “Government Annuities” the same thing as the last Administration’s “Personal Accounts.”?
And didn’t the Democrats howl like banshees that individual ownership of a single sacred Social Security dollar would be the End of Days?
Just a thought.
#26 JIMV mentions the real gorilla in the room behind all this: inflation. Forcing retirement money into T-bills would indeed work very well with inflation as a mass confiscation… but it’s much worse than that.
As some of the responses in here indicate, openly messing with retirement funds is a “third rail” issue; I therefore consider this news as someone sending up a test balloon, and it’s going to get shot down hard.
The reason why, is that inflation is a form of confiscation all by itself, and it remains the most politically palatable and *effective* such method, for several reasons.
First, is bad economic theory. Mainstream (non-Austrian) economics exists largely for the purpose of rationalizing government intervention in the economy, and are thusly rotten to their foundations. As a result, most of them are rather sanguine about inflation, and I’ve seen many economists across the so-called political spectrum openly saying that inflation would be a good thing, because it would lighten the debt load for everyone — including the government.
Second, pursuant to the first: combine the above with the relatively short attention span of the mainstream, and you have a populace conditions to see inflation as being like the weather; it just happens, and it’s either no one’s fault — or the fault of the politician in front of them. The inflation that sunk Jimmy Carter, for example, finds its origins in the 1960′s, where we find JFK’s tax cuts, followed by Vietnam and the Great Society… but almost no one knows this.
This is due in large part to the various byzantine mechanisms by which the government can borrow, and manipulate the money supply; they can arbitrarily delay the process of causation over time to obscure the relationship between government spending and overall impoverishment of the population. They do it by the various different methods of financing available to them, and by fudging the data; all of this mucks up the correlation sufficient to allow mainstream economists to smugly assert to the Austrians: the data doesn’t track you.
It still tracks us, but by the time it does so, it’s long past the attention span of the mainstream, or the election-circumscribed time horizon of politicians.
Third: unlike taxes or any other method of theft, there is no such thing as an inflation shelter. Inflation confiscates all wealth held or denominated in dollars, no matter where it is — from savings bonds and 401(k)’s and IRA’s, to cash hidden under the mattress or at the bottom of an old missile silo in Russia — no dollar is safe.
This is the back door inherent in fiat currency per se; all mainstream arguments in favor of fiat against commodity currencies can be boiled down to the view that this is a “feature” rather than a bug.
This is why I expect inflation to be the inevitable method of confiscation used, versus any outright theft scheme such as outrageous tax increases or forced “investments”. It’s stealthy, camouflaged by the near complete hijacking of the science of economics, and thereby placed out of the view of a mainstream culture dumbed down by socialized education… while those of us who can see it all to cry out an alarm are easily painted as “fringe”, “extremists”, “wackos”, “gold bugs” etc.
My, but the Tree of Liberty is looking withered and parched these days.
BOHICA! It’s the Democrats again! 2010: Re-defeat Communism!
I didn’t think the government would ever get into the business of building cars, so I don’t think this couldn’t happen.
#40 Seerak, I don’t disagree with you, but to date, the TBTF banksters who are getting much of this printed money are not lending, so how can inflation impact Main Street if all that excess liquidity isn’t reaching it? Au contraire, all I hear is this huge sucking sound as the banksters pass all their own wealth destruction onto our backs such that it is us Americans who are loosing jobs, loosing homes, and going bankrupt while they continue to profit from the crisis. Even though I agree that most economists believe that inflation is the way to go (float ourselves out of debt so to speak) and much preferable than deflation, I can’t see that money making it into our wider economy because 1) the TBTF banks are insolvent (plus there’s what ~$600 T worth of derivatives sitting on books w/o price discovery yet) so are holding on to everything they can, and 2) the banks seem to be in this mode, in conjunction with the government, of using this crisis to expand their power and wealth — all the better to stay afloat when this ship goes down.
Btw, gamble at your own risk with the stock market. It hasn’t been based on economic fundamentals since the last low in March, 2009. The Powers That Be are pumping that sucker up; you see it in futures trading, especially after hours. LOL and never mind all the insider trading, front running, and the fact that 70% of the volume is by high frequency trading via TBTF bankster computers who are passing trades back’n'forth between themselves.
Before allowing any more government intervention in this whole arena, let’s abolish social security and grant everyone who has worked in the private sector a pension on par with their government worker counterparts. Why not? The government worker has sacrificed nothing compared to the private sector experience and arguably has contributed less and has had less stress throughout their careers. And the “money” that funds both government pensions and social security has come from everyone rather equally.
Then you would have an equal starting point and any ideas for change will impact everyone in the same way – thus putting a stop to these inane programs and regulation that seem always to target and abuse private sector citizens.
As for Skeezix’ suggestion to put all of the social security money into the stock market: What money? In case you haven’t noticed, money already collected has been spent on your precious bloated government and future payments have been borrowed against.
Social security is a ponzi scheme where the victims are all government outsiders and subject to the whims and self serving expediencies of our political elites. That’s why government types and public employees want no part of it.
40. Seerak
Yep, that is how they will do it. Most of them (correctly) think that outright confiscation will likely lead to violence, and will avoid that for now.
There are other sneaky ways to ‘encourage’ people to ‘voluntarily’ put their 401ks into these annuities. Tweak taxes, fees, fiscal policy, regulations…the mind boggles at the many ways they can ‘inadvertently’ weaken the market and make govt annuities look better. Then the mealy-mouthed govt can say ‘Well, we’re not FORCING you to change; it’s still you’re ‘choice”.
If this is indeed the path we are headed down, then our best hope is that they will over-reach and try to take too much to fast; causing a revolution. Sad but true.
“If the government owns the people’s savings, the people (who mostly understand what will happen to them if this goes through) will look for alternative vehicles to put their money in. The government will have to either co-opt or outlaw those to ensure the revenue stream they create. And what happens to the economy due to the loss of that capital inflow?”
That’s EXACTLY what the FDR Admin did to the country in the 1930s. It made owning Gold ILLEGAL after people stopped putting money into banks and bonds and started buying metal. The Obama Admin seems to be following the EXACT path that FDR and Hoover took in the 1930s to turn a recession into a deep Depression, during which FDR profoundly increased the power of the Federal Government. Is this mere incompetence and historical blindness? Isn’t Bernake supposed to be an expert on the Great Depression?? Then why are they DOING THE SAME THINGS!!!
no. 13 Skeeziks, Now that was funny.
On a serious note, I have not seen any recent legislation concerning changes to retirment accounts so thanks for the news. However, some of my friends are almost up to a grand a month (or more) under our current “great health care system” so as soon as real health care reform passes soon…and the cost of health care is drastically reduced; maybe working people will have extra money to invest in their retirements eh? Now that’s an idea we can all agree on…
Health Care costs will be drastically reduced under Obamacare?! Anyone who believes that is either ignorant of economics, lacking in understanding of human nature or just ideologically and politically blinded.
I and millions of Americans don’t want this fraudulent and horrible legislation. It’s almost as if it were designed to drive up costs, drive away medical professionals, suppress innovation and in general make good health care a rationed commodity. Can you point to just one thing that the government does both competently and at a reasonable cost. What is it about liberals that make them think it is OK to force their delusions upon the rest of us?
If those jokers in DC can get their grubby hands on 401k’s, next up will be the accumulated cash value in a life insurance policy.
Short and to the point: We are alreadt 12 TRILLION in debt and its getting bigger every day. They just keep spending and this money is already nothing but AIR.It would change nothing at all as without some kind of cap on Guv spending its just more of the same in perpetuity.
Obamacare “death panels” play into Social Security bigtime…..if you die early after you retire, no payout!
If these SOBs try this, it will be up to 20,000,000 citizens to go to DC and tear the goddamn place down.
27. whyyeseyec:
It would be much easier to replace Geo Miller and Jim McDermott…….
Please? I’m a libertarian/conservative independent voter in Seattle. I get that my fellow Seattleites are pretty much bound to elect an extreme liberal, but could we at least get a different one than this ass?
The Federal government should be asking me how to handle their money, not making a play for mine. My net worth is positive.
Can you say literal tar, feathers, pitchforks and railroad ties because that is what will happen. My guess is it will be far worse than that.
Truly disgusting. And predictable, as BHO’s economic advisors have extolled the virtues of mandatory 401k early withdrawals for the sake of income tax revenue. I can hardly believe BHO and his people are that liberal, and that stupid. It is shocking how naive and incompetent they truly are, I can hardly fathom it. It is unbelievable how liberals seek to control the behavior and resources of others. It is an evil thing. Thank goodness they aren’t smart enough to hide their intentions.
I simply can’t get over how stupid and childish one has to be to believe that wealth redistribution is a solution to anything. Literally, we are dealing with children. They are incapable of understanding simple, basic, fundamental economic theory. I’m all for pluralism, but shouldn’t you have to be mentally competent before you can participate in public policymaking? And the hubris from these cretins, it is so shockingly incongruous with reality that I don’t think the english language is even remotely sufficient to capture the true depth of their utter lack of any cognitive ability. Hearing them prattle on about policy solutions, it’s almost unbearable. Twits, every last one of them. Ungrateful and hopelessly naive twits. It is incredible that anyone could think that a government retirement scheme has any chance of doing anything other than producing breathtakingly incompetent financial tyranny. My goodness.
10 albert:
Speak for yourself, John Alden. You sure know nothing about me. And maybe just move on, nothing for you here.
13 skeezix:
In a heartbeat. I’m gonna get nuttin from ss, and lots from Wall Street. Sorry you’re too poor to invest.
29 AJM:
“401ks, unlike pension plans, let people opt out of preparing for their retirement.”
Really? How? I would posit just the reverse, and point to me and all my friends actively involved in where our 401k money is invested.
As Reagan said: “In this present crisis, government is not the solution to our problem; government is the problem.” (Also, see healthcare refore.)
29. So what? Who are you to dictate what another man does with his money. Let him work until he dies if he fails to plan, and let his children take care of him if he can’t.
In Argentina, the stock market crashed when investors got wind of the government raid of their pension funds. Imagine what would happen here. Hedge fund mangers would pull out and the market and it would go below 5000k in a matter of a few weeks. Gold would skyrocket as people take the penalties and put the money into the yellow metal.
I know the Dems are Dim but are they this Dim? Or is this the defining Cloward -Piven moment?
I’m telling ya If they screw around with peoples 401k- It will hit the fan
Albert said that individual investors won’t come back to the market in a long time. Has he seen the percentage of individual investors who are bullish (yes, bullish) on the market? Something like 75%. Your comment doesn’t track. Of course, when the masses are bullish, it’s time to be bearish.
First there was Cash for Clunkers, now come the Obama-crats demanding we take a clunker for cash.
2010 To-Do List: Defeat Democrats, run out RINOs.
=Sigh=
Look, I’m not pro-government control of retirement accounts, but it’s true that a lot of people would be better off with payout [not deferred] =fixed= [not variable] annuities. Most of the annuity bad behavior has been in variable deferred annuities, where one does pay very high fees for possible downside protection against account value dropping below a certain amount, and most are using as a tax-advantaged investment vehicle, not a source of income [indeed, people rarely annuitize with these things - just take a lump sum out at the end]
The problem is that one has to convert a big lump of money into an income stream in retirement, and that’s not necessarily cheap, either.
I used to work for TIAA-CREF as an actuary working on their retirement annuities. TIAA has been around for eighty years, I believe, and their customers on the whole do annuitize at least some of their retirement savings. TIAA is a very stable company, and never does anything crazy [indeed, they dumped all their CDO stuff when they realized there was something dodgy about that]. That is the kind of company you want to buy an income [i.e. payout] annuity from; alas, their best products aren’t available to the general public. I have most of my retirement savings with TIAA right now.
All that said, it would be best for the government to stay out of this. All I could think of when I heard about this was “How are they going to screw this one up”.
The feddle gummint is already stealing lots of my money. Last year they decided to take another $5,000 out of my pocket and give it to my neighbor so he could by an SUV that gets 14 MPG instead of the one he was driving that got 12. My two vehicles average 28 mpg, so I have to pay.
Then they took another $8,000 out of our pockets so my other neighbor could buy a house.
And I was forced to donate $10,000 to my other neighbors because they have young children. Remember, when somebody gets a huge tax break, the rest of us make up the difference. Thieves…
If the Democrats even DARE to do this, you might as well see this simple instruction manual appear:
Tar.
Feathers.
Democrat.
Some assembly required.
Another thought that comes to mind about this being inevitable:
The Democrats can buy a LOT of votes with all that money. And don’t think that they won’t try.
Nobody with any sense is going to allow the government to confiscate their 401ks and IRAs. They’ll liquidate them, even if it means forfeiting half of their value to taxes (35% Fed Income+10% penalty+State taxes).
The government would be quite happy with that result. Either way they get to spend a huge chunk of your retirement plan.
Check out this from Pravda…
http://english.pravda.ru/opinion/columnists/111678-retirement-0
and watch this woman: Teresa Ghilarducci. She has already testified before congress (early 2009) on this so-called retirement plan.
When we have our revolution, we will steal back from the rich and give to the poor.
I have to agree, that makes a lot of sense. I was wondering, however, what you guys think of variable annuities. Does anyone have any information about that?
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