Mark Hemingway, Washington Examiner:
Will the government outlaw your 401(k) plan? It seems like an absurd possibility, yet earlier this month two Democratic senators, Sen. Tom Harkin, D-Iowa, and Sen. Bernie Sanders, I-Vt., held a hearing on Capitol Hill exploring the possibility of doing exactly that.
On Oct. 8, the two senators from the Health, Education, Labor and Pensions (HELP) Committee held a hearing on “Retirement (In)security in America.” Among the proposals discussed was “Guaranteed Retirement Accounts,” or GRAs.
The purpose of the GRA proposal is simple: To force Americans to stop putting their retirement savings money into private 401(k) accounts and send their money to the government instead.
GRAs would “eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary,” according to a letter signed by House Minority Leader John Boehner and 12 other Republican representatives.
The letter urged opposition to the proposal and was sent to Treasury Secretary Timothy Geithner and Labor Secretary Hilda Solis in May. The Harkin-Sanders HELP committee hearing shows Democrats are ignoring critics of the GRA proposal.
[…]
In February, President Obama released the “Annual Report of the White House Task Force on the Middle Class.” GRAs are among the proposals recommended in the report “for further study.”
[…]
But why are unions pushing this? The average union pension plan is only 62 percent funded, far below the point at which the government considers a pension plan “endangered.” Estimates suggest unions’ multi-employer pension plans are underfunded by $165 billion and could be on the verge of collapse.
Union leaders see these “retirement security” ideas like GRAs as vehicles to a back-door pension bailout, where union leaders will no longer have to worry about the fact they’ve underfunded their rank and file members’ pension plans. Just let Uncle Sucker take care of it.
Labor is the biggest source of campaign cash for Democrats (Retirement USA backers AFL-CIO and SEIU are spending $88 million this election), and Harkin also wants to pass “card check” — the proposal to do away with secret ballots in workplace representation elections — during post-election lame duck session.
Regardless, forcing everybody into a government retirement system that pays out equally to Americans who have scrimped and saved and to those in organized labor who have grossly mismanaged their pension plans seems almost too crazy to contemplate.
But unions are desperate, and Democrats are in hock to Big Labor in a big way. And the lame duck could be their last chance for a very long time.
No worries. Their scruples over the evils of theft will keep them from passing any such thing.
Ahem.
On the plus side, Sanders’ involvement means that we can describe this proposal as at least partially “socialistic,” and Harkin’s involvement means we can reasonably label it at least quasi-“radical” — and both without running the risk of having our rhetoric labeled outlandish and unhelpful by our intellectual superiors in the “pragmatic” GOP establishment!
So we’ve got that going for us.
this is sort of a confusing conjumbling of two issues – unions way bad need to rape the treasury to cover their pensions, and our dirty socialist betters are of the conviction that the failshit government doesn’t get a “good return” on the money it “invests” in your IRAs and 401ks.
Yeah.
The day this happens is the day I cash out my 401(k), become a citizen of India, and get hired back my my current (eeeeeeeevil Wall Street fat-cat) employer as a foreign contractor.
Or not. Sorry, I’m venting.
Hey, that’s a great idea. Let’s start another government retirement program they can steal money from!
I’ve been warning about this for some time, as Democrats have been talking about it since last spring.
I don’t give a rip what Scott Rasmussen says, this needs to be vociferously opposed.
The unions blew all of their cash they should have been putting in those pesion plan funds on the electoral fortunes of socialist Democrats. There is no way they can be allowed to raid everyone’s 401(k) to stealth bailout the unions.
This, amnesty, and cap-n-tax are dangerously in the sights of the lame duck session. Let’s hope that enough of those narrowly re-elected read the writing on the wall and not rubber stamp the socialist agenda.
And if this does begin to be a reality, “team R” needs to stir up all of the right folks to get some mass protests going, and “help” those who will be around after the lame duck session see the light.
I mean, social security is broke already! Why start a second Ponzi scheme on top of it…
Teresa Ghilarducci is the go-to whore on the government stealing your 401k same as Mark Zandi is the go-to whore on all things stimulus
The Dems might be the most tone deaf politicians in the history of the world.
This really a win-win for the government, because either people play along and the pols get a (current) pile of cash to play with, or people bail out of 401(k)s before the law takes effect and pay huge penalties and interest, as well as taxes on the whole amount. Oh, and I read where those who convert to GRAs will still pay taxes, albeit less than a complete cash-out, thereby allowing the government to reduce the credit given for any conversion.
Wonderful.
It is a lose lose lose lose lose lose lose for the citizens. It is only a win win for a leftist government.
A lot of those union pension plans have been raided by organized crime, with the blessings of the union leadership whom have taken kickbacks from these raids. Now they want to raid our private pensions to fund more criminal activity. The Government should focus on getting the major organized crime figures out of the union leadership and prosecute them for larceny. This includes people like Tom Harkin and Bernie Saunders.
Is this just trying to see what will actually act as the trigger for mass violence?
That’s my theory.
Now, I have a more thoughtful idea I’m trying to put together about Democrats and wealth in general, but for this particular item:
If they steal my 401k, which is the better response — the .45ACP or the .223REM?
I already “donate” 14.4% of my gross salary to a government-managed retirement account. No way in hell am I going to start flushing more money away in a parallel program.
They HAVE to do this and a lot of the squishies are going to go along with it because there is no other way. The employers paid their fair share already and are too tapped out to pay more. And there are too many citizens affected by this corruption/theft to leave them hanging. Stealing our future to pay their present is their modis operandi. I am not going to get in a tizzy and threaten to start the inevitable war. I am going to pay the penalties and get my funds out of my 401k right now and put it in something more tangible. I know I am not alone and this will remove a lot of capital from the system just when we need the liquidity to finance a recovery. My wife took a rape prevention class many years ago. One of the lessons I remember was for the potential victim to empty her bladder and bowels on the protagonist. That’s what I say. Piss on them! And they can eat my sh!t.
How far away are they, Rob? If they’re close, I vote for .45 ACP.
However, both are good choices.
Hey, they chose to take union jobs. They knew they were letting the Mob run their retirements. FUCK. THEM.
I’ve a USAF vet, served during DESERT SHIELD and DESERT STORM. I first paid US taxes when I worked for a Greek guy in Asbury Park, NJ, back in 1980.
I’ve paid US taxes for 30 years. After university I worked in the private sector for a couple of years before volunteering for the US military. I served in the US military for six years, and then went back into the private sector.
This is my way of establishing some level of bona fides: I worked in the private sector, I served my country, I went back to the private sector.
I hold US and Irish passports. I recently renewed my Irish passport.
The moment I see this proposal become seriously considered, I will cash out my IRA, 401k, and ordinary stock market savings, sell my house, car, and assorted chattels, and flee this country. I have the ability to do this, and I will. Apart from English and French, I also speak Japanese, and I have family all around the world. Mostly in Ireland, England, and France, but all around the world.
Ireland makes it easy to get an Irish passport. Any Irish ancestor from a grandparent forward will get you a passport. I guarantee anyone reading this, you probably have the same advantage, no matter where your parents are from.
Start looking for an escape hatch, right now.
Hands off my stack, jack!
#18: That’s an AQ in the Arabian Peninsula from last Christmas reference, right?
Nah Grass Root, I was just being flip :)
Very good. Please forgive me for being overly political.
(“Jocular, dammit, jocular!” – Internal Monologue.)
BTW, talking about the savings thing, I am really big into the stock market, and I bet on sin.
For example, I caught a random news article a couple of months ago, about how The road from China into Macau was being doubled in capacity, so 500,000 gamblers could go to Macau, instead of 200,000.
A quick search found me an American casino corporation with a casino in Macau. I immediately bought 100 shares at $30; today they’re at $47. I can make this kind of return anywhere in the world. If the US government intends to confiscate 100% of my 401k, anywhere else in teh world is a better place to be than the US.
The US will be strangling the goose that lays its golden egg.
Fixed it for Mr Hemingway.
I have to wonder, how much of the $165 Billion unfunded union pension obligations was pissed away on political activism?
BTW, that’s 500,000 gamblers PER DAY.
#18 appears to be a Pink Floyd reference, actually, but perhaps I’m the only one not in on some joke.
Betting on sin is a good move. In fact, given the way things have been going, buying companies that produce spirits is probably a safe bet.
#25: The crotch bomber.
#26: Believe it or not, you can now actually *buy* your own still. Well, in Georgia, anyway. You’re supposed to limit production, etc., but after the zombie apocalypse I’ll be making and selling as much as I can.
“I’m all right jack, but keep your hands off of my stack.” Money, by Pink Floyd.
You can buy and run your own still in Georgia? Sweet. I thought making moonshine was illegal in every state. I just wish Georgia weren’t so darned humid. I hate humidity.
#29: Well, Atlanta’s at 1500′, and when you get up to Cleveland, GA, (about an hour north of Atlanta), you never get much about 70F during the summer.
When I first started brewing my own beer, there were all sorts of limits, now long gone. Nowadays, GA allows you to distill gallons of liquor, for your own use, every year.
I just love this date.
The day this happens is the day I cash out my 401(k)
What’s the best way to convert your 401(k) into some asset, like copper or corn or sugar beets?
Because I want out of the dollar and I want out now.
I’ll turn it into dollars and send it to me.
Under current law, it’ll cost 20% off the front. This is better than 100% off the back, IMHO.
After you’re cashed out, you make your own decisions.
I don’t think there is a compelling argument to be made for cashing out your 401k.
That would be a lot precipitous.
Thanks for making up my mind for me, I am for sure voting a straight Republican ticket tomorrow when I vote! Enough is enough. The Dems have this plan to take over everything and do not care what we the people think. Didn’t we throw out the British for the same reason?
I don’t think there is a compelling argument to be made for the government getting their grubby little paws on our 401K’s either.
When Tom Harkin starts talking about grabbing my 401k, it is past time to start acting precipitously.
It’s actually time to start hanging politicians from lamp posts. For myself, however, I will simply go quietly away. I still have not explored The Giant’s Causeway, for example.
#35: Actually, if I understand it properly, we pitched out the Brits for a tax on tea, and that was after winning the French and Indian wars for us.
What have the Democrats ever done but ruin our health care system? Now that I think about it, the Democrats will be lucky to avoid the guillotine!
they don’t want accounts out there what grow tax-free I guess
they don’t want accounts out there what can grow tax-free I guess
I bet the vastly untapped potential of 401ks and IRAs in America to shelter income is pretty goddamn terrifying to dirty socialists bent on using spendings spendings spendings to foster dependency on government.
They are not tax free happy, give us a break. You pay tax as they go in, or when you cash/collect out, or a bit of both in some events. They just want that money to go into the same lockbox Social Security is kept safe in for us.
Wait, what do you mean Social Security is broke?!
they grow tax-free I said
#41 – no they don’t. They grow tax deferred. There’s a difference.
well yeah but they can’t spend money what’s deferred is the point
401Ks have always been viewed as “cheating the government” of its rightful taxes due. So that they would think of looting it is natural. Like most looting, this is a one shot deal. It isn’t an annuity that the government can latch onto like a parasite.
The Roth IRA grows tax free as you have contributed with after tax income. This was the last year, one could convert IRAs into Roth’s with no income ceiling. I mentioned it here a while ago. Hopefully some of you took advantage of it and paid your taxes at the Bush rates. No gaurantee that they won’t come after these, but if they don’t, they don;t get a penny in taxes to fund their bullshit causes.
That Theresa Ghilarducci was taken to the back of the woodshed and thoroughly spanked by Mark Levin. Stupid b’int tried to argue that it was fair to lump everyone into the same bucket of fail that is the federal gov’t managed ponzi.
The bottom line is that the US Congress provided the 401k as a way for people to save, and that same US Congress is getting ready to change the rules and make a grab, because it has all the guns.
All the average American can do is play be the rules, and hope its elected master class will too.
When the elected master class announces it intends to change the rules, those who previously played by the rules really ought to have the right to declare “No fair!” and take home their trillion dollar footballs.
Really? They have all the guns?
They act like they do…
It’s an assumption they may want to reconsider.
People, if manipulating our 401k money is actually being bantered around do you think they’re going to give us a heads up before we go the bank or fund and hear “sorry, your 401k has a temporary freeze placed on it”? Which is precisely how this will come down. I’m out and liquid. I figure I can at least get something for my 35 years of work. A bird in the hand is worth two in Obama’s grubby little socialist mitt. I took the tax hit but I feel so much better…..because it’s mine.
whaaaa?
srsly?
This sounds like the kind of thing they will try in the lame asshat session.
I hope you’re “out” in something other than dollars, because those are going to be worthless soon.
I don’t think there is a compelling argument to be made for cashing out your 401k.
Two words: Weimar Republic. If they decide to monetize the debt, I’ll take the 20% hit and sink it into something other than money.
Don’t think it can’t happen to us, because it can.
well yeah but there’s still at least one foreign equity fund in your plan and large caps what have a lot of foreign currency exposure, no?
I have no idea really.
I just think paying tax penalties is very poor dad not rich dad.
one foreign equity fund in your plan and large caps what have a lot of foreign currency exposure, no?
Don’t remember. But if we go down, we’re taking everyone with us.
that’s grim if that happens I will make soup
People should really consider seeing a professional with these questions before making large decisions.
For instance, in your 401(k), you’re not in cash. What happens with too much currency? Prices go up. Inflation. This means non-cash assets denominated in dollars increase in nominal terms. This includes equities.
“People, if manipulating our 401k money is actually being bantered around do you think they’re going to give us a heads up before we go the bank or fund and hear “sorry, your 401k has a temporary freeze placed on it”?”
Word.
“Which is precisely how this will come down.”
Not quite. They will try to ease us into this. ‘Hey, trade your shaky 401k/IRA for a gar-un-teed govt annuity’, they’ll say. ‘Hey, we gotta start taxing those fat-cat 401k/IRA contributions’, they’ll say. Etc.,etc… Point is, they’ll do things to weaken the profitability of/confidence in IRAs, which will make a lot of people BEG them to take ’em over.
Finally, they’ll get to the ‘Hey, sorry we’re going to have to go ahead and freeze all these accounts, mmmkay’ or ‘Yeah, we’re going to have to add huge taxes/cash-out fees if you want to liquidate your account’.
All of us frogs will get used to the warming water. If they do it quicker it may lead to bang bangs.
Oh, and a chunk of the populace who can’t or won’t save for their retirement will be cheering them on, in the name of Social Justice.
I sort of feel the need to return to this thread and say again that I strongly recommend that people consult a fee only CFP before making decisions like this.
The fees are quite reasonable and you can ask about them up front.
Taking your retirement money out with a huge tax hit and then buying some commodity or another you’re not extremely knowledgeable about in could drastically reduce your standard of living for a quarter of your life.
Bh is wise. Very wise, especially with the dollars.
I am pretty awesome. I think we can all agree on that.
Only if you post your dancing on youtube.
“Bh is wise. Very wise, especially with the dollars.”
Thats why he’s the hall monitor; booster club treasurer ;)
Hi all,
Sorry for the late return.
I accept that the government does not have *all* the guns, but the government has the most well-organized guns. There may be a lot of ex-military out there with experience and guns, but where are their recall phone lists, TO&E, estimates, etc.
I imagine simply cashing in, dropping out, and fleeing because there’s simply no organized alternative.
there will be no “simply cashing in” you have to go to a fee-only CFP before making decisions like this
This is non-negotiable.
Dear happyfeet,
You need a toe? I can get you a toe; by three o’clock….
(Sorry, I went to “Two Gentlemen of Lebowski” this weekend.)
Going to a Certified Public Accountant assumes you have a government that feels like obeying the law.
Evidence (e.g., Chrysler, GM) suggests… etc…..
funny you should mention that… I was looking over my ballot what I will do in a few minutes… since a lot of the Team R’s are whorish and beastly I’m going to vote for Libertarians for Gov and Lt. Gov and for a bunch of other stupid races nobody cares about… but I noticed that a weirdly predominant number of the L’s were… accountants…
who knew?
Is that a thing?
Dear happyfeet,
I used to vote Libertarian all the time, to make a, oh, philosophical point, in an attempt to move both parties towards the freedom viewpoint.
After two years of Obama, I realize this is not the way to go. He’s doctrinaire, and voting libertarian gives him power by allowing him to split opponents.
I voted Republican down the line today, because I want to present a united front against the USA’s native fascist party.
where do you live? A lot of R’s in California aren’t for reals R’s.
It’s all trickery.
Damn, baby, wasn’t I obviously a Southern Georgia Cracker?
That did not seem obvious to me. Georgia crackers are cool.
Well, basically, we’re all ex-military gator-wrestlers.
Which, you know, makes us really cool.
I mean, the whole UGA bulldog thing. Ever tried to stroke an alligator?
(This is not ex-President Clinton!!!!)
Do you know Steph and BMoe?
I have a turtle what lets me pet him on his head
but the other one ain’t having it
I prefer to remain obscure.
Up front and close, I’m really ugly. Long story.
Hence the online presence.
BTW, I paint long-necked turtles for fun.
From a distance. On canvas.
Dear Lord. Intentionality.
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