Democrats Move To Seize 401(k) Plans

[DirtyFeetDesigns (heb1976)]

This was from an e-mail I received. This is kinda bad. After reading it ... it sounds almost like when there was talk about wanting to privatize social security. Alot of similiarities.

Obama & Democrats Move To Seize 401(k) Plans!
US News & World Report published a story yesterday morning in which they uncovered little discussed legislation that would effectively eliminate 401(k) plans and create a second quasi-Social Security system in which the government would take control of the retirement plan savings of millions of Americans.

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.

[HLWalter725]

I think this is a bit of a fear appeal here. Your source is a BLOG, not a news story. And ALL the blog says is that the house LISTENED to a professor discuss plans. THere is no confirmation that a bill has been written or awaiting voting.

I think passing this on is irresponsible.

[NellieRose]

If it were true there would need to be 401K that still had anything in it...most people don't even bother opening their statements thanks to the financial meltdown.

[NellieRose]

Originally Posted by HLWalter725

I think this is a bit of a fear appeal here. Your source is a BLOG, not a news story. And ALL the blog says is that the house LISTENED to a professor discuss plans. THere is no confirmation that a bill has been written or awaiting voting.

I think passing this on is irresponsible.

Propaganda.......

[FrenchRuby]

Originally Posted by DirtyFeetDesigns (heb1976)

would also cause the collapse of an entire industry of financial and accounting companies that have been built upon the Retirement Savings Industry.

This in itself sounds like a really good reason to do it. Expunge as many parasites as possible.

3% is a whole lot more than 401s have made this year. With the way the markets are right now, I think it is a whole lot more than they will make next year, or even the year after that. It probably IS time to ring-fence people's pensions and take away the problems of profit-led fund management, risk-taking with other people's money and market volatility that are flushing ordinary people's pension funds down the toilet. If that means nationalising the pension system, what's the problem? What the government owns is what the people own, not what fat bankers get to play with at no risk to themselves. Sounds like an improvement to me.


PS A national pensions scheme is what we have in the UK, you can take a private pensions scheme as well if you want, but your social security deduction guarantees you a retirement income, albeit a small one, that is totally free of the profiteering tendrils of the market makers.

[Scorpiosue1102]

What I am getting is that this is from a professor that spoke on the Hill. I guess I don't understand how Obama is linked to this?

[Tiffikat]

Originally Posted by HLWalter725

I think this is a bit of a fear appeal here. Your source is a BLOG, not a news story. And ALL the blog says is that the house LISTENED to a professor discuss plans. THere is no confirmation that a bill has been written or awaiting voting.

I think passing this on is irresponsible.

This...

[4noisyboys]

Originally Posted by NellieRose

If it were true there would need to be 401K that still had anything in it...most people don't even bother opening their statements thanks to the financial meltdown.

So sad but true. I am one of those that refuses to open them up. I really don't want to know how much we are NOT worth now!!

[Tiffikat]

I opened mine. I lost $200 so far which isn't terribly but doesn't make me happy.

[HLWalter725]

Originally Posted by Tiffikat

I opened mine. I lost $200 so far which isn't terribly but doesn't make me happy.

I've already lost $30,000 from my retirement and THAT was only up to the end of September BEFORE the HUGE drop!!!