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Demand that Congress Pass the "Keep Your Hands Off My 401(k) Act of 2010"
As I wrote in January:
Last May, I wrote about the rumor that the Obama administration might seize funds from American's 401k and IRA accounts.
Last week, Bloomberg pointed out:
The
Obama administration is weighing how the government can encourage
workers to turn their savings into guaranteed income streams following
a collapse in retiree accounts when the stock market plunged.
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...
There is “a tremendous amount of interest in the White
House” in retirement-security initiatives, Borzi, who heads the Labor
Department’s Employee Benefits Security Administration, said in an
interview.
In addition to annuities, the inquiry will cover other
approaches to guaranteeing income, including longevity insurance that
would provide an income stream for retirees living beyond a certain
age, she said.
“There’s been a fair amount of discussion in the
literature taking the view that perhaps there ought to be more lifetime
income,” Iwry, a senior adviser to Treasury Secretary Timothy Geithner,
said in an interview...
One proposal raised by Iwry as co-author
of a paper while at the Retirement Security Project, before joining the
administration, has reached Congress. A bill requiring employers to
report 401(k) savings both as an account balance and as a stream of
income based on an annuity was introduced on Dec. 3 by Senators Jeff
Bingaman, a New Mexico Democrat, Johnny Isakson, a Georgia Republican,
and Herb Kohl, a Wisconsin Democrat.
I
quoted Karl Denninger's warning that a government "option" for
investing retirement funds in treasuries could soon become mandatory.
A couple of weeks ago, Newt Gingrich (yes, that Newt Gingrich) wrote:
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 401 k)
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."
Argentina provided a precedent
in 2008, taking over that country's private retirement accounts for
forced investment in government bonds to cover spiraling deficits.
Ambrose Evans-Pritchard editorialized at the time in Britain's Daily Telegraph
that this may be "a foretaste of what may happen across the world as
governments discover . . . that the bond markets are unwilling to plug
the (deficit) gap. . . . My fear is that governments in the U.S.,
Britain and Europe will display similar reflexes."...
Congressional
Republicans should introduce legislation to block the government from
ever proceeding with anything like this. Call it the "Keep Your Hands
Off My 401(k) Act of 2010."
Gingrich's article -
like Gingrich himself - is highly partisan. He has helped create a
false partisan divide-and-conquer strategy in this country, distracting
people from realizing that we are all Americans. And instead of
admitting that both the Republican and Democratic parties are just two
branches of the fat cat party (and that both promote socialism for the rich), Gingrich pretends that only the Democrats are socialists.
So is this just partisan fearmongering, or is Gingrich raising authentic concerns about retirement savings?
I don't know.
But it doesn't matter.
Specifically, there is no harm - and tremendous benefit - to outlawing
extremely dangerous acts, even if no one is positive they will be
committed. If no one is going to carry out such acts, then no harm no
foul. If they are, it will help to clarify that such acts are illegal
and will be harshly punished.
If government agents don't carry out false flag attacks, then they shouldn't hesitate to sign a pledge that they won't carry out false flag attacks, right?
Similarly,
if some in government aren't really considering seizing retirement
savings, then they shouldn't oppose the "Keep Your Hands Off My 401(k)
Act of 2010". Right?
These are not the type of acts concerning which expensive regulation would minimize a small harm. False flag attacks have huge negative costs,
as would the government seizing our retirement savings. And the cost of
saying Keep Your Hands Off My 401(k) would not be expensive, because it
would not involve monitoring against a large number of small
infractions, but simply making one big bad act illegal.
Gingrich
might be a partisan hack who is writing about this for strictly
partisan reasons. But his idea is such a good one, that both Democrats
and Republicans should jump on board.
Note: 99% of the Democrats in
Congress and the White House are political hacks as well. I am not
trying to cheer-lead for the Dems. Both parties have sold their souls
to the powers-that-be.
- advertisements -
don't forget that fdr seized (actually required holders to turn in) gold in the last iteration.
nobody was ever convicted. (gold? what gold?)
Done!!
(In '09, I might add, I wanted to beat the rush)
Would love to see a bill but them seizing the assets is already baked into the cake as far as I'm concerned. It's the only way they can force some extra life into the dollar and keep the treasuries rolling at a low rate. Granted I'm doubtful on them ramming a mandatory through till another market panic so Uncle Sugar can run to the rescue "Don't worry I'll take your money and invest it for you and you'll be rich!" The fact they are even considering it is a sign of what a banana republic we have turned into. "The USA bringing you all the charm of a banana republics, now with nukes!"
Uncle Sugar is a registered offender
So one option is to take half out sometime this year and half out Jan 2nd 2011. It won't happen overnight and you spread out your tax liability if you have enough in there to get really schnockered. Of course, if it seems that this is really going to come to pass sooner that later, then get it out ASAP. I'm on the fence since my IRA is at Profunds and I can't directly invest in Treasuries--they use swaps.
Slow day. Therefore, a couple of comments. When Bernie Madoof got caught running a Ponzie Scheme, everyone thought my goodness, why didn't anyone catch this guy. Now, right in front of the whole world, out in the open, the U.S. Government is accepting public comments in order to set up their own income deferred, guaranteed income, Ponzie Scheme (well, outside of Social Security that is). Read these quotes or passages taken from the above post:
(1) In addition to annuities, the inquiry will cover other approaches to guaranteeing income, including longevity insurance that would provide an income stream for retirees living beyond a certain age, she said.
(2) 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.
We ask...are human beings really this gullible (or stupid)??? Nothing amazes us anymore...
I'm sure a pledge that prohibits false flags would be an effective deterrent against the type of folks who carry those kinds of things out
So true. However, the false flag site is valuable as an aggregation of some very compelling articles. I was especially struck by the below ABC News article (from 2001, no less) documenting that the Joint Chiefs of Staff actually SIGNED OFF on false flag attacks intended to produce American casualties, in order to justify an invasion of Cuba. Surprisingly enough (to me at least), McNamera didn't approve it.
http://abcnews.go.com/US/story?id=92662&page=1
A good reason not to mingle these two topics. Obviously it is futile to legislate against clandestine goverment operations.
But to force or coerce conversion of private savings to worthless government IOU's would require changing written law, no matter how stealthily that might be done. The existence of prior law forbidding such actions would make it even harder to get away with this unnoticed.
I can see the comments from Democrats if Republicans were to propose such a bill. "Clearly the far-right, red baiting, extremist wing of the Republican party is trying bait-and-switch tactics to fool the American people that this President is a Socialist or a Communist. We will not participate in such discussion of a bill on such false premises."
Too rich (sorry for the pun).
These proposals have been around for a while. It means no lump sum withdrawal of your money. You will be stuck with monthly payments just like Social Security is supposed to work. This will be preceded by drastically higher tax penalties should you elect the pull your money instead. I closed all IRAs and 401ks last year.
Just look at social security if you want to see what happens if they pull this off with 401Ks and IRA's.
Those "income streams" won't be available later either.
Smart people that are closing their accts. now..before the stampeed.
I barely recognize this country anymore. Scary times.
I'm voting with my feet...screw them and screw this phoney market. Run while you're still able.
I've considered withdrawing my 401K dollars as well, I just struggle with the 10% penalty and the tax consequences...and then the question: what do I do with the proceeds? Buy precious metals?
You really think the 10% penalty now is more than they'll tax you later?
Real Estate IRA. Buy land outside the US. Even if they come for the balance in your account, they can't get at it. Land is inflation-proof, has low carry costs, and is illiquid. Pensco and Equity Trust are two of the custodians who can handle it for you.
I don't think that annuitization (a.k.a. seizure) of retirement accounts is just an idle threat. It has happened in other countries; I think Argentina took that route in 2002 after the banking sector collapsed. As always, the experts told the public it was really for their benefit. And, they bought that argument.
They used to say that even a broken clock is right twice a day. This is Newt's minute to be absolutely right. Count me in.
Yes, you absolutely know that the Treasury lads are thinking about it; all that money in private hands, so tempting to the omnivore State.
The "State" is just a conduit. The money will go into private hands. Can you guess which private hands?
They could turn half of the money into gold and keep it at Mount Weather, just in case. And let George Soros manage the other half, because he is so smart. And keep some in the O'Bama Presidential Library, just mad money, yeah.