According to US News & World Report along with Congressional Records, a House subcommittee is considering the advancement of legislation that would ELIMINATE 401(k) plans and create as an alternative a "Guaranteed Retirement Account" for every worker in the United States. Under the plan, Americans' existing 401(k) accounts would be transferred into the GRA and would grow at an average yield of around 3%. The subsequent loss of preferential tax treatment among US employers who offer the qualified plans would be used to make a $600 per person government contribution into the plans. In addition, the GRA's would require a mandatory 5% contribution (tax) by all US workers.
Democratic Congressman Jim McDermott (D-WA) who supports the plan was quoted as saying, "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."
This legislation being considered by Democrats is perhaps the most dangerous proposal put forth by the Democrats to date. The system would essentially create a second Social Security System in which bureaucrats would control the funding, investment and use of the money. The government would control all provisions of the plan, and individual rights for determination of risk reward would be stripped.
Like the current Social Security System, which is failing and is expected to collapse unless massive reforms are instituted, the 401(k) replacement program would give no assurance of the protection of funds. The government, just as with Social Security, could essentially strip the plan of assets and use those assets within the general fund. Where is Al Gore and his lock box?
More importantly, consider the immediate implications of such a plan? There is currently $4.5 Trillion dollars invested within 401(k) plans in the United States, the transfer of this wealth to the government would destroy not only the financial markets but would also cause the collapse of an entire industry of financial and accounting companies that have been built upon the Retirement Savings Industry. This would be the largest loss of wealth and seizure of public assets in world history.
In addition, consider the long term ramifications of such a system. A 3% savings rate will essentially double the account value every 24 years. That would mean that if you were 41 years old today and had $20,000 in your 401 (k) plan, that money would now be worth $40,000 at age 65 under the GRA. This GRA plan would depress savings rate to a point that multiple generations of Americans would be unable to outpace inflation within their savings and suffer inadequate incomes upon retirement. The resulting "Welfare" generation would only spurn more government taxes in order to provide for their retirement. The resulting vicious cycle of impoverishment and taxation would never end.
Is this the change that we are looking for?
The seizure of $4.5 trillion dollars by the government. A promise of low returns, no control over assets, and no guarantee that the funds would not be replaced by a promissory note.
Is this the change that you want?
The creation of a welfare state in which the government is responsible for all aspects of our lives as if we were a society of 4 year olds.
Is this change for the better?
A government that will fail to protect the current Social Security & Medicare System but will create new Bureaucratic programs based upon those failing systems.
Is It Really Time To Change America?
Are we now in the age in which we abandon 232 years of government built upon State's Rights, Individual Rights, Checks & Balances, and an American Exceptionalism based upon unhindered opportunity and a government ruled by the people, not established to rule the people.
J Brown
October 24th, 2008
Please be sure to vote on this article at Real Clear Politics
Be Sure To Visit Our Friday Coffee Break Section For Reader Offers
4 comments:
Obama is a socialist with the all the trimmings. A battle is being waged, quietly and behind the scenes, since post WWII. The Marxist playbook is in play and implemented, the public has been overwhelmed by the MSM portraying an overwhelming negativity towards capitalism and the evil nasty Republicans as the racist flag bearers with GWB at the helm. With the schools, local/state governments filled with unionized bureacracies inhabited by socialist and BLT racists no wonder there is blank stare appeal for Hussein Obama. To make him palatable to even more of the gullible they use white guilt, obfuscation of facts and hide all negative history of the ONE. The MSM attack anyone or anything that questions the ONE as they were trained and edcuated to do. The MSM wants to make history not record it or do their duty to insure the truth and report it, Instead they coverup for the Messiah and his socialist ideology that he wants to put in practice with a sellout demo party who have corrupted themselves so blatantly there is no turning back.
If you look back at the McCarthy Hearings and read what really was the basis for this it all makes sense now. Too bad it was handled the way it was but the idea was sound. Just look were we are now !!!
No Hussein Obama Ever
pound this issue. it's a big one. everyone will want to know about this terrible idea.
Oh well, it's not like my 401k is worth much after the wall street collapse.
Thanks to the Dems who refused to regulate their cash cows, Fannie and Freddie, I have lost more than half of my retirement savings and investments.
The power of the land in one hand is too dangerous. God help us.
Those of us who saved money to buy homes we could afford, paid our bills on time, support our own children, protect our credit ratings, and put away money for our retirement are now being punished in exchange for a welfare society.
God help us.
As a teacher I worry about state retirement accounts. Clinton floated the idea of seizing those during his administration. That would be the next step after 401ks. Not just teachers. Fire fighters, nurses etal.
Post a Comment