Here's Why (And How) The Government Will "Borrow" Your Retirement Savings

Tyler Durden's picture

Submitted by Simon Black via,

According to financial research firm ICI, total retirement assets in the Land of the Free now exceed $23 trillion.

$7.3 trillion of that is held in Individual Retirement Accounts (IRAs).

That’s an appetizing figure, especially for a government that just passed $19 trillion in debt and is in pressing need of new funding sources.

Even when you account for all federal assets (like national parks and aircraft carriers), the government’s “net financial position” according to its own accounting is negative $17.7 trillion.

And that number doesn’t include unfunded Social Security entitlements, which the government estimates is another $42 trillion.

The US national debt has increased by roughly $1 trillion annually over the past several years.

The Federal Reserve has conjured an astonishing amount of money out of thin air in order to buy a big chunk of that debt.

But even the Fed has limitations. According to its own weekly financial statement, the Fed’s solvency is at precariously low levels (with a capital base of just 0.8% of assets).

And on a mark-to-market basis, the Fed is already insolvent. So it’s foolish to think they can continue to print money forever and bail out the government without consequence.

The Chinese (and other foreigners) own a big slice of US debt as well.

But it’s just as foolish to expect them to continue bailing out America, especially when they have such large economic problems at home.

US taxpayers own the largest share of the debt, mostly through various trust funds of Social Security and Medicare.

But again, given the $42 trillion funding gap in these programs, it’s mathematically impossible for Social Security to continue funding the national debt.

This reality puts the US government in rough spot.

It’s not like government spending is going down anytime soon; it already takes nearly 100% of tax revenue just to pay mandatory entitlements like Social Security, and interest on the debt.

Plus the government itself estimates that the national debt will hit $30 trillion within ten years.

Bottom line, they need more money. Lots of it. And there is perhaps no easier pool of cash to ‘borrow’ than Americans’ retirement savings.

$7.3 trillion in US IRA accounts is too large for them to ignore.

And if you think it’s inconceivable for the government to borrow your retirement savings, just consider the following:

1) Borrowing retirement funds is becoming a popular tactic.


Forced loans have been a common tactic of bankrupt governments throughout history.


Plus there’s recent precedent all over the world; Hungary, France, Ireland, and Poland are among many governments that have resorted to ‘borrowing’ public and private pension funds.


2) The US government has already done this with federal pension funds.


During the multiple debt ceiling fiascos since 2011, the Treasury Department resorted to “extraordinary measures” at least twice in order to continue funding the government.


What exactly were these extraordinary measures?


They dipped into federal retirement funds and borrowed what they needed to tide them over.


In fact, the debt ceiling debacles were only resolved because the Treasury Department had fully depleted available retirement funds.


3) They’ve been paving the way to borrow your retirement savings for a long time.


Two years ago the government launched a new initiative to ‘help Americans save for retirement.’


It’s called MyRA. And the idea is for people to invest retirement savings ‘in the safety and security of US government bonds’.


Since then they’ve gone on a marketing offensive involving the President, Treasury Secretary, and other prominent politicians.


(Most recently Nancy Pelosi published an Op-Ed in the San Francisco Chronicle a few days ago promoting the program.)


They’ve also proposed a number of legislative reforms to ‘encourage’ American businesses to sign their employees up for MyRA.


Just last week, Congress introduced the “Making Your Retirement Accessible”, or MyRA Act, which would charge a penalty to employers whose workers don’t have a retirement account.


The proposed penalty is $100. Per worker. Per day.


Imagine a small business with, say, 10 employees who don’t have retirement accounts. The penalty to Uncle Sam would be a whopping $30,000 PER MONTH.


There’s a word for this. It’s called extortion.


Obviously when facing a $30,000 monthly penalty, an employer will pick the easiest option.


Given the absurd amount of government regulation on the rest of the financial industry, MyRA is the fastest choice.

This isn’t about fear or paranoia. It’s about facts.

And the reality is that the government in the Land of the Free is moving in the direction of borrowing more and more of your retirement savings.

If you still remain skeptical, remember that last year the government stole more from its citizens through Civil Asset Forfeiture than thieves in the private sector.

Or that just 45-days ago a new law went into effect authorizing the government to strip you of your passport if they believe in their sole discretion that you owe them too much tax.

No judge. No jury. No trial. They just confiscate your passport.

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localsavage's picture

At some point, the lead will start flying.

Antifaschistische's picture

LOL....not im America.  Negative Interest Rates will already scalp every single retirement program and 401x in the US and not a peep will be heard from the sheeple who constantly and complacently get shorn...we will accept that zero interest rates are good for the economy and good for all of us like we are told to believe....and we will applaud any presidential candidate who calls on the FED to keep interest rates in the sewer.

Gold Pedant's picture

But the fact that there is a nonzero chance of it happening still REALLY bothers them. Obola is going to push HARD toward gun confiscation during his final months. He will do what he is best at and fail.

Budnacho's picture

I genuinely wonder what the comments will be as we're stringing these folks up....

New_Meat's picture


"It's a good start!!!!";


roisaber's picture

$7.3 trillion won't cover 1-2 quadrillion in derivatives exposure.

They're done.

The Alarmist's picture

After netting it should only be $20 trillion or so ... no worries, mate.

yellensNIRPles's picture

Quadrillion is a made up number, right? /s

R.R.Raskolnikov's picture

if you are true patriot you would not mind. Go to McDonald's and celebrate your patriotism.

css1971's picture

This makes no sense. They can print it or borrow it into existence.

ThroxxOfVron's picture

"This makes no sense. They can print it or borrow it into existence. "

Right up until the instant that they can't.

css1971's picture

At which point what makes you think anyone's pension will be worth stealing?

Sudden Debt's picture

No, because the elite could lose money due to harsh inflation.

Better let the serfs pay for it. Those lazy bastard won't mind because they'll figure it out way to late anyway.

And if you didn't prepare or give a fuck, then why not?

gmak's picture

The elite own things and productive assets. Inflation is their friend because they aren't dependent on income. Prices move before wages. If you own things, you do better than the poor working schmuck (me) under inflation.

xrxs's picture

I'm sure Mitt Romney wouldn't want to have his 100M IRA dinged.

Printing seems to be a fairly palatable way to steal.

economessed's picture

I have a better idea.  Let's make Mexico pay for a wall AND our federal debt!

/s (duh)

The Alarmist's picture

The US should have used the last big restructure by Mexico in the '90s as an occasion to offer to buy the rest of the country that it didn't take in the 1840's. Could have had the whole country for $100B, which would have moved the mess to the Guatemala border and slowed the death spiral we have now on our current southern border.

just the tip's picture

i proposed the same thing for some time now.  the only difference between your proposal and mine is that, considering the criminals in congress, they could somehow rig it to be a zero sum game.  even if it did cost the US something they would lie and cover it over.

GRDguy's picture

They did buy it.  It's held under the agent's name: Carlos Slim. 

It was tempting to add an "e" to his name.

Dragon HAwk's picture

Well if we built the  Mexican wall, with the bodies of people who tried to sneak across at night, we could save a lot on construction costs..  Just saying..  ok i will be humane for you lib tards, one warning shot thru the leg.

nmewn's picture

Closed my IRA out a couple years back, got around half back.

Those still trusting in it will's picture

Smart move.  I did the same thing and got to keep about 55% of what was 'mine'.  Only now I have direct control of it.

You are going to pay the taxes anyhow, why not go ahead and pay now, pay their silly 10% early withdrawal penaly before tax rates go even higher?  Don't believe these dipshits who preach 'you will be in a lower tax bracket when you retire'.  Taxes will continue to rise.

nmewn's picture

Yeah, they got me for 45% too.

Still, when everything freezes up again and the bail-ins begin in earnest "for the common good" of course! (lol)...I'll have to remember where I was when the boating accident occurred ;-)

greenskeeper carl's picture

I hadn't put too much into it, Im young. I just withdrew my principle, which you can do without paying the penalty. All money I ever actually paid into it was returned to me. The "gains" I left in there, mostly just as cash for a little while. Then, because i am stupid, I put the rest into things like GDXJ and others. I think its down around 32% right now, but I pretty much wrote the whole thing off anyway. Now that I did what I did, I think I may have been better off just paying the penalty and getting all of it out.


It may not be next month or even next year, but at the very least they will eventually mandate that due to the dangers of the "free market" or some such nonsense all people must invest XX% in the "safety and security of government bonds". That will happen, at a minimum, evnetually. Once they get away with that, its all down hill from there.

Normalcy Bias's picture

Isn't it funny how when one declines the 'great' benefit of a retirement account with company match, the HR lady will at least look at you like you're the dumb one.

You can't just come out and tell them it's because you have absolutely no doubt that one day the govt is just going to end up stealing/'nationalizing' that money anyway.

Democrats have been drooling about doing this since at least the Clinton Administration.

Greater Fool Theory's picture

Same here.  Took a bath in taxes and penalties, took the meager result and opened a brokerage account in Singapore.  I am 100% in agreement with the author of this article.  The state thinks 100% of our income is theirs so that the tax break we got by putting money into 401k/IRA accounts was their loss.  They'll want to be getting that back soon enough...

nmewn's picture

"The state thinks 100% of our income is theirs..."

That is the crux of the matter isn't it? They think they are better stewards of our money than we are.

This, in the face of 20 trillion in

Calmyourself's picture

I know these people they think much, much less of you then you imagine. You are worthless stupid sheep to be ordered about. You know nothing and those of you who profess to know something are destined for the showers. Harden yourself and your families

RichardParker's picture


The people you describe are elitists.

Calmyourself's picture

No Richard you are below the elitists radar altogether.   The people I describe are mid level and above federal and state bureaucrats and long term elected officials of both parties.

Lost in translation's picture

Took the same bath but did as you did.

Can US citizens open a brokerage account in Singapore? If so, how do I do it?

Greater Fool Theory's picture

Yes, but I don't know how much longer we'll be able to do so.  New US disclosure laws are onerous for banks around the world.  Some banks just won't hassle with US citizens because of the reporting.  

But Singapore is a financial and trade center for the region so their banks are already dealing with citizens of many countries including US.  Once they report for one USC, they can report for many.  Still, I'd be quick about it.  Probably capital controls are coming soon and it'll make it doubly difficult.

It *might* be possible to open an account by mail/phone, but I went there and did it in person, so I'm not sure how or if remote could work.  On the other hand, it's a fun city to visit.  Take a holiday, open a bank account.  :)

You'll need proof of your citizenship plus your address.  And some money to deposit.  Good luck!

gwar5's picture

I closed mine out last year and got about 90% back because I did financial Jiu Jitsu (legal kind) using a self-directed IRA and an LLC. But it was a total pain in the ass and took a couple years to evolve it to fruition and not sure it was worth all the bullshit.


Farmer Joe in Brooklyn's picture

Ditto here!

50% is better than 0%

joego1's picture

Mine is in cash in a self administered IRA and the second they start pushing buttons it's out of the account and it's overwith for the IRA.

red1chief's picture

Scaremongering article. MyRa's are only a trickle. Of course SS has a large unfunded liability, it's pay as you go.

Dr. Engali's picture

SSI is a Ponzi scheme, it's not part as you go. You are paying for the people who retired before you. How do you propose that part time American workers continue to pay for the baby boomers who are entering retirement now? And, as automization and globalization continues to eat away at the labor force it will only get worse.

red1chief's picture

I suggest you look up the definition of Ponzi scheme. Funny how the right wing finds easy money for $300 billion for Citibank in one weekend, or a trillion here and there for stupid murderous wars. But god forbid the geezers get what they were promised...

Normalcy Bias's picture

DEFINITION of 'Ponzi Scheme'

A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop.

It's looks like you're the one who needs to crack a dictionary, Chief.

red1chief's picture

SS is not a scam, it's been an out in the open program with only about 3% overhead which has virtually elininated poverty among the elderly, with a managable deficit due to changing demographics. It will yield promised returns to everyone who pays in if the public ignores the billionaire propaganda. Simply posting the definition and saying it means what you want it to mean doesn't make it true. I assume you are smart and oppose the program for ideological reasons, which is fine but you'd be honest if you just came out and said so.

Normalcy Bias's picture

Sorry, Chief, but respectfully I think you're woefully un and/or misinformed about SSI.

I'm not at all saying the idea behind it wasn't a noble one, but the design, implementation, and managment of the program have been a disaster.

Here's more from a very left leaning newspaper, saying basically the same thing I am: Hey, candidates: Social Security is broken

Social Security is flat broke. The just-released 2015 Trustees of the Social Security and Medicare trust funds report has a secret little table that apparently the political appointees, euphemistically called "trustees," haven't bothered to view. It's tucked deep inside the report in appendix table VI.F1. It says the system is $25.8 trillion in the red.

How did we get into such terrible fiscal shape? Simple. Our politicians, Republicans and Democrats alike, have spent the last six decades running a massive Ponzi scheme.

rejected's picture

Not the wars,,, not the MIC,,, Not EBT,,,Not Section 8 Housing,,, Not Earned Income for those who did not pay taxes,,, not the bailouts,,, not the QE money printing,,, not ZIRP,,,not the off shoring,,, not the onshoring,,, not the billions of bullets the government is buying,,,

Nope,,,it's all Grandma's $600 Social Security check. Kill Granny...

ShortCommonSense's picture

I think most of us are against all of those things, and would like to have, at the very least:  SS reworked so the gov't can't steal all of the money out of the fund (though it's too late for that now), and changes made to it so it remains solvent.  Though a good argument can be made that it's a poor system altogether, and if .gov stopped fucking about with the rest of the stuff like you mentioned, there would be plenty of money to help the people who actually need it, without taxing everyone into the shitter. 

But we're pretty fucked anyway.  Stupid silly people.  When we don't know that the fed is not a .gov agency, and you have rube-io talking about "family first" tax plan.  I'm all for families and lower taxes.  But this clown is on tv saying he wants to increase the earned income child credit because he thinks people should be able to keep more of their own money, which we obviously all agree with, except this dolt either doesn't know, or is a liar, that any tax credits are NOT your own money, they are added on to your total return at the end.  So if you payed in 1000 in income taxes, and owed the govt 500, you would get back 500 of your own money.  Then if you have 3000$ in tax credits, you get the 500 back, plus 3000 more, meaning that you have taken a total of 2500 more dollars than you even paid in (in income taxes).  And people eat it up.  Granted, I'm still for people getting more tax breaks, but I think it would be much better to scrap the payroll tax, eliminate a lot of other retarded taxes(obamacare,retirement,death tax), and eliminate tax "credits", and then if you want to charge people 10pc income tax even without so many dumb 'credits', people would be happy(ish) to pay it, considering all the other savings that cost way more than income tax to begin with.

bookofenoch's picture

Your argument that social security isn't an insolvent ponzi racket gave us all a much needed tickle. Thanks. When Justice Thomas gets bumped off, please come back and cheer us all up with a story about how the national debt doesn't matter cuz we owe it to ourselves.

SSI will yelld promised benefits? Heh heh...

NoPension's picture

Chief? Really?

Are just trolling us? Or do you work at SS?

Good grief, Social Security makes Berni Madoff look like a school yard bully stealing lunch money. I'm surprised they locked him up, and didn't put him on the staff.

nmewn's picture


SS is a scam, they call it a "trust fund" but there is no money in "the fund".


For reasons of simplicity this is how it works, the money taken out of everyone's paycheck is put into general revenue and spent. An IOU from the government in the form of a non-marketable/non-negotiable "bond" (a receipt if you will) is placed in the till supposedly obligating the government (not me or you, them) to pay it back but really its for purposes of accounting...however the money is gone.

If anyone in the private sector attempted something like this they would be arrested.


Seek_Truth's picture

A much more detailed explanation (for those interested in learning) is available here:

Baldrick's picture

back in the 30s the supreme court ruled that socsec is JUST A TAX and the feds are under NO OBLIGATION to pay it back. we were conned before we were born.