Back in October, 2008, I wrote a post about how House Democrats were trying to find a way to nationalize the American people's retirement accounts by requiring that all Americans "invest" 5% of their income into guarranteed retirement account that would be run by the Social Security Administration instead of private 401(k) accounts and IRAs.
It seems the federal government is taking action to do just that. Here are the details from Investor's Business Daily:
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 401k) 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."
So far we have had a government take over of two automobile companies, bank bailouts, and the nationalization of the student loan program. Today we learned that the Democrats are not focused on jobs as they and the president said they were, but used the discussion of jobs as a ruse to distract in order to push through a government take over of the health care industry through reconciliation. And now we are seeing signs that the Democrats are working on a government take over of private retirement accounts.
Ever since Barack Obama was elected, we've seen larger and larger chunks of American life being gobbled up by government. Today's Democrats are nothing more than thug socialists who can't stand that there are still large swaths of the American people still living independently from government largesse and control. Now they are using what remaining power they have in Congress to change that. If the government takes over health care, college student loans, and retirement savings then no one, no matter how wealthy, can escape the thumb of big government.
John at Power Line thinks that the attempt to nationalize retirement accounts will receive a lot of pushback from a politically powerful Democratic constituency: lawyers. John argues that there are many attorneys in America who have saved a great deal of wealth in their private retirement accounts and will not take kindly to having the government confiscate it in the name of "protecting" it.
Nonetheless, John tells us that he knows someone on Wall Street who has anticipated that the Obama administration might try to take over retirement accounts and has planned accordingly:
Earlier today I learned that a relative on Wall Street has stopped accumulating funds in his retirement accounts precisely because he thinks they may be confiscated by the Obama administration. Instead, he is acquiring untraceable, tangible assets--gold and silver--that the government won't be able to steal without a physical search of his property.
That's not good for the economy, of course. When citizens who have the ability to invest in our economy don't dare do so, for fear that their savings will be stolen by the government, we are reverting to an earlier and far poorer economic era. But that, apparently, is what the Obama administration wants.
Each new Obama policy initiative seems to bear that out.