Bears Repeating

Posted: November 10, 2008 in Economy, Politics

I think I posted this information up on this site not too long ago, but it’s certainly worth the second post.


Dems Target Private Retirement Accounts

Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs
carolinajournal.com

By Karen McMahan

November 04, 2008

RALEIGH — Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.

Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

Rep. George Miller, D-Calif., chairman of the House Committee on Education and Labor, in prepared remarks for the hearing on “The Impact of the Financial Crisis on Workers’ Retirement Security,” blamed Wall Street for the financial crisis and said his committee will “strengthen and protect Americans’ 401(k)s, pensions, and other retirement plans” and the “Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.”

Currently, 401(k) plans allow Americans to invest pretax money and their employers match up to a defined percentage, which not only increases workers’ retirement savings but also reduces their annual income tax. The balances are fully inheritable, subject to income tax, meaning workers pass on their wealth to their heirs, unlike Social Security. Even when they leave an employer and go to one that doesn’t offer a 401(k) or pension, workers can transfer their balances to a qualified IRA. (more…)

This is what the majority of America voted for on 11/4: An administration that would entertain a possible plan that would push your 401k accounts under the authority over the same freakin’ bureaucracy (Social Security Administration) that has been running out of money for years.


A government that robs Peter to pay Paul can always depend on the support of Paul.

George Bernard Shaw (1856 – 1950), Everybody’s Political What’s What? (1944) ch. 30


For every action there is an equal and opposite government program.

Bob Wells


If government could create jobs and raise children, socialism would have worked.

George Gilder

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Comments
  1. Give it a rest says:

    Duane,

    When we get down to it, all of the money currently held in 401ks and IRAs has had a great deal to do with the financial crisis we are in today.

    This money has amounted to a giant pool of free money for wall street to pay with because no one have been keeping tabs on it. 401ks have no Pension Master or anyone who job it is to ensure that the banks/ brokerage house are living up to their fuduciary responsibilty to the people who actually own these assets. IRA are in the same boat. If folks could withdraw the remaining of their saving held in IRA and 401ks the party would be OVER in the USA! Currently all we can do is move it from one bad bank to another.

    Think about it all 401k money is simply being held hostage by the banks today. You cant withdraw it without a major penalty yet the banks can play fast and loose with this money as they have been doing.

    We can blame deregulation all we want but it has been the flood of non-institutional investors into the market and the lack of institutional oversight that has given wall street the rope by which they are hanging all of us.

    No I do not believe that the Fed should take over our money but as the babyboomers are getting wiped out in the current market something will need to be done to protect them for the remaining years of their retirement. We are going to face a crisis where we will not be able to blame it on people for not doing what they were supposed to do. Many folks did save their money for that rainy day but it will not be there for them.

  2. S. Cain says:

    Gotta agree with ‘rest’; you can’t take the money out the 401(k) account without a penalty, but… The simplicity of hiding business beneath the umbrella of a corporation is a glaring problem. Corporations can do so much than people simply because of the legal basis of them. It’s grossly unfair and there has to be a way to rein in the ‘corpocracy'(or whatever the word is). I can’t apply blame to the leader of a corporation directly, I have to confront “it” in an indirect and protracted manner…That’s whack.

    Capitalism is rife with double standards. If I ask for money I don’t have from a bank teller, that’s robbery, but if I accidentally overdraft my account from an ATM it’s a $30 fine. If I ask for exactly $35, I can only do so between 9 and 5; if I ask for $35 any other time I may only have the option of receiving either $20 or $40.

  3. Peg says:

    I see that Rest has no comment about the egregious treatment given Fannie Mae and Freddie Mac – and the failure of Democrats to come together with Republicans to fix what was wrong several years ago when Republicans began to sound the alarm. The financial crises that we have today has many fathers: both parties, Wall Street, Mainstreet and others.

    What is your solution, Rest? No private property? No freedom for people to use their assets as they wish?

    People having the ability to save and invest – and having it more widespread – is something wonderful. That there are problems along the way today does not negate that.

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