My retired banker neighbor has been warning of this for over a year now. He is tempted to pull the trigger and take his money now, with penalties, just so he's not contributing to the government's spending addiction. Of course, we'll pay them now or pay them later, but they WILL take our money. S.O.Bs. How you liking the change so far, America?Posted by Western Chauvinist at January 11, 2010 7:21 AM
Hasn't the government of Argentina done something similar already?
It has been suggested many times that we may turn inot a big "Argentina" with the current government policies running amok.Posted by Don Rodrigo at January 11, 2010 8:49 AM
Perhaps the most alarming part is that this may be done by executive branch fiat, rather than through Congress. This administration is creating more fiats than an Italian car company.Posted by Don Rodrigo at January 11, 2010 8:59 AM
Thanks for reminding me about Argentina. Updated to reflect that.Posted by vanderleun at January 11, 2010 9:17 AM
The private health insurance companies also have quite a honey pot of funds stored away. They use big reserves to allow for the occasional extra-large payout - the classic insurance strategy. Clearly, they're in need of some "reform".Posted by Brett_McS at January 11, 2010 1:54 PM
Here's part of an article from October 2008 about this very subject, published in Financial Week. Note that the plan to steal everybody's 401K money will be done for our own good because of all the loses in the stock market in fall 2008.
"401(k) Plans Could Be Facing Total Revamp
Lawmakers, Candidates Calling For Rethink Of DC Plans; Die Early, Lose Half Your Assets?
By Doug Halonen
October 29, 2008 8:20 AM ET
(Pensions & Investments)—House Democrat George Miller is calling for a soup-to-nuts re-examination of 401(k) plans that could lead to a radical overhaul of the popular defined contribution plans...
One proposal under consideration would eliminate the tax-favored treatment of contributions to 401(k) plans and individual retirement accounts; instead, workers would receive a $600 tax credit that would offset contributions to a new mandatory guaranteed plan that would be managed and administered by the federal government...
“Maybe we are at a time where fiddling at the margins is not going to serve the American people,” Mr. Miller, D-Calif., said at a House Education and Labor Committee hearing in San Francisco on Oct. 22....
Major losses in retirement savings are spurring Mr. Miller’s effort to consider rewriting the ground rules for 401(k) plans. At the San Francisco hearing, Mr. Miller said a more comprehensive legislative review is required because 401(k) plans and IRAs collectively had lost $2 trillion from equities alone in the year ended Oct. 9, according to new paper by Alicia Munnell, director of the Center for Retirement Research at Boston College. Ms. Munnell also estimated that defined benefit plans experienced $1.9 trillion in stock losses during that time....
Mr. Miller said he wants to study a proposal to create so-called guaranteed retirement accounts advocated by Teresa Ghilarducci, a professor at the New School for Social Research, New York...
Under Ms. Ghilarducci’s proposal, which was laid out in a briefing paper published late last year by the Economic Policy Institute, Washington, a liberal think tank, 5% of a worker’s earnings would be placed in the plan each year, with workers and their employers each contributing half, except where an employer provides an equivalent or better defined benefit plan. Workers would receive a $600 annual tax credit for their contributions, and they could make additional after-tax contributions...
The accounts would be administered by the Social Security Administration, and the funds would be managed by the federal government’s Thrift Savings Plan or a similar governmental agency...
Workers who die before their retirement could bequeath only half their account balances to heirs; those dying after retirement could leave half their benefit minus benefits already paid out...
To pay for the new accounts, the government would eliminate tax breaks for 401(k) plans...
“It would be extremely expensive to subsidize both 401(k)s and guaranteed retirement accounts, and the latter are a much more effective and equitable way to increase retirement savings,” Ms. Ghilarducci wrote...
... Ms. Ghilarducci’s proposal would require participation (by all workers/ed). In addition, while investments under existing retirement plans are managed by private-sector money managers, investments in Ms. Ghilarducci’s plan would be managed by the federal government...
“It (Ms. Ghilarducci’s proposal) is subsidized by workers who die early and forfeit their assets,” added Ed Ferrigno, vice president of Washington affairs, Profit Sharing/401(k) Council of America, Chicago..."
Posted by Boots at January 11, 2010 3:31 PM
Here's a link to the original article, Crains has closed the publication but kept the archive alive.
So the government will control your access to health care and decide whether you get treatment and what kind.
The government will also control your retirement account, and gets to keep half of your wealth if you die "early".
No, I don't see any problem there.Posted by rickl at January 11, 2010 4:34 PM
That's just plain theft.Posted by pdwalker at January 11, 2010 5:11 PM
So we will lose much of the retirement we've been setting aside for years in order to pay for all the underfunded government pensions?
There will be pitchforks in the streets.Posted by marybel at January 11, 2010 6:36 PM
"This administration is creating more fiats than an Italian car company."
Don Rodrigo at January 11, 2010 8:59 AM
Also like most Fiats, a good portion of these ain't gonna start, many problems ain't gonna be covered by warranty and a large number of customers regret buyin' 'em in the first place.
A bunch of the customers are looking to replace those with something from the upcoming 2010 model year.Posted by Duncan Idaho at January 11, 2010 9:25 PM
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