Your 401(k) Goes Away: It Begins
by Chuck Donovan
Actually, it began long ago. People with savings are independent. The health of government relies on power, and independent people do not bow to power. If you have savings in the bank, tax deferred or otherwise, these bloated, overreaching, debt-ridden, immoral governments want your hard earned money.
Don’t think your tax deferred 401(k) or IRA or Roth IRA are safe. The government made 401(k)’s and IRA’s, the government can un-make them. Just because it would be unpopular with you, don’t thing it would be unpopular for the government to attack Americans who have savings.
Most people in the world have fallen for the dumb idea that savings are bad. People who save have given up the new car, the vacation, the bigger house, the big credit card balance and opted for a bigger personal savings balance. Now they have a bullseye on them being sighted in by our central government. This is a government, controlled by the so-called leadership of the Democratic and Republican parties that has found it impossible to balance a budget since the 1950’s and has now decided two things will solve their problem: 1. Print endless amounts of magic paper money to pay for more stuff. 2. Take away your savings.
Take a look at this sampling of headlines on the subject. Note the published dates of the articles. This isn’t new, folks.
The White House pulls a switcheroo on retirement savings accounts. (April 12, 2013)
” So Mr. Obama proposes to ‘limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013.’
Thus do our political betters now feel free to define for everyone what is ‘needed’ for a ‘reasonable’ retirement. “
According to widespread media reports, both the U.S. Treasury Department and the Department of Labor plan are planning to stage a public-comment period before implementing regulations that would require U.S. savers to invest portions of their 401(k) savings plans and Individual Retirement Accounts (IRAs) into annuities or other “steady” payment streams backed by U.S. government bonds.
Folks, there’s only one reason these agencies would do such a thing – the nation’s creditors think that U.S. government bonds are a bad bet and don’t want to buy them anymore. So like a grifter who’s down to his last dollar, the administration is hoping to get its hands on our hard-earned savings before the American people realize they’ve had the wool pulled over their eyes … once again.
Full steam ahead on Obama’s theft of IRA’s and 401k’s, December 11, 2012 BY SUZANNE EOVALDI
2010 administration report on the Middle Class cites Vice President Joe Biden, who “floated [an] idea called Guaranteed Retirement Accounts’ (GRAs).”
Rest assured, the D.C. ruling class will stop at NOTHING to obtain the financing necessary for the continued purchase of votes and maintenance of power.
At the end of 2010, there was an estimated 17.5 trillion dollars in United States retirement assets, including 3.1 trillion in 401k’s and 4.7 trillion in IRA’s. The idea that those who thrive on money and power would permit such an alluring trove to go untapped is laughable.
Obama Administration Plans to Seize 401(k) Retirement Accounts, by Joe Wolverton, II, J.D., Wednesday, 05 May 2010 13:45
This isn’t the first time the government has decided how much money is enough for you. Saint FDR, (Oh come on, that is the way he is spoken of.) wanted to place a 100% tax on all earnings over $19,000 per year. He said nobody needed more money than that. Fortunately an only slightly more sensible Congress disagreed, but the precedent was set. The geniuses in D.C. know what is good for you to read, learn, eat, work at, and to earn.
It is nothing new. Governments around the world, all with centralized banking and control, all with out-of-control spending and regulation, have been looking for anyone who actually has a few dollars saved somewhere. Those paying attention to the last few years of “G” summit meetings will note the focus on disallowing people to leave their countries with the money they have worked for. Freedom of trade is already stifled. Freedom of movement is in danger. Freedom of any kind is feared by the incompetent, tyrannical, over-bloated governments that now watch and control every move you make.
The warning signs have been right in front of you all along. Why is this surprising to you? What have you been paying attention to? Maybe you are watching too much of the lasted gyrations and gossip on the latest headlining starlet, The View, the latest White House pet dog or cat, Anthony Weiner’s antics, or other similar things. It is happening in the rest of the world and it will happen here too. Try these headlines instead:
POLAND: Poland Confiscates Half Of Private Pension Funds To “Cut” Sovereign Debt Load, Submitted by Tyler Durden on 09/06/2013 14:50 -0400
- Government has too much debt to issue more debt
- Government nationalizes private pension funds making their debt holdings an “asset” and commingles with other public assets
- New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio
- Debt/GDP drops below threshold, government can issue more sovereign debt
‘And of course, once Poland borrows like a drunken sailor using the new window of opportunity, and maxes out its new and improved limits, it will have no choice but to confiscate more assets, and to make its balance sheet appear better, until one day, there is nothing left in the private sector to confiscate. At that point the limit itself will have to be legislated away, and Poland will simply continue borrowing until one day there are no foreign lenders willing to take the same risk as the nation’s private pensioners. At that point, Poland, which is in the EU but still has the Zloty, can just go ahead and monetize its own debt by printing unlimited amounts of its currency.
Of course, we all know how that story ends.”
PORTUGAL: Portugal Confiscates Private Pension Funds – Can It Happen in the United States?, Posted on December 3, 2011 by David
“Portugal has confiscated $7.5 billion of private pension funds (November 2, 2011) as a last ditch effort to meet deficit targets. This is the European model for introducing “austerity” programs: steal the wealth from the producers.”
CYPRUS: Cyprus Shellshocked As Unprecedented Savings Tax Imposed on All Deposits for EU Bailout (16 Mar, 2013)
“the government agreed to an unprecedented levy on all deposits… ..is to be made up through the bank deposit levy of up to 9.9 percent, which will apply to everyone from pensioners to Russian oligarchs… …Government spokesman …tried to calm public anger, saying: “The situation is serious but not tragic, there is no reason to panic.”
U.K.: Brown knew pension fund raid would rob employees of £12bn, 2/15/2006
“Gordon Brown was warned he would rob pension funds of nearly £ 12billion when he decided to bring in a tax on private pensions in 1997. …Mr Brown was well aware of the devastating financial consequences this would have on those saving for their retirement.
” The scheme is categorized as a “tax raid” “Pensions Commission headed by Lord Turner warned that ‘voluntary private pension provision is not growing: rather it is in serious and irreversible decline’.”
“in 1997 when a fresh-faced, newly-appointed Chancellor said he would be tapping pension funds for some extra tax revenue. …he scrapped the dividend tax credit. Pension funds could no longer shield 100% of their investment dividends from the grasps of the taxman.
…the argument followed, some defined benefit schemes had built up healthy surpluses – surely this could be put to public use?”
“Higher earners now pay tax twice; …and we’ll all regret that.” – Keith Barton, Association of Consulting Actuaries
Brown’s raid on pensions costs Britain £100 billion, 15 Oct, 2006
“About 120,000 people lost part or all of their expected final salary pensions in recent years, as companies struggled with rising deficits. The removal of tax relief on share dividends starved funds of a key source of money. …The demise of our final salary schemes began in earnest in 1997. Brown saw pension funds as an easy target — so he raided them.”
ARGENTINA: Argentina Nationalizes $30 Billion in Private Pensions, By ALEXEI BARRIONUEVO, Published: October 21, 2008,
“Argentina’s government said Tuesday that it would seek to nationalize nearly $30 billion in private pension funds to protect retirees from falling stock and bond prices as the global financial crisis continues.” “If the move is approved, her government may have secured an important electoral asset, which could help guarantee Mrs. Kirchner’s political survival.”
Argentina Makes Grab for Pensions Amid Crisis, By MATT MOFFETT, Updated Oct. 22, 2008 12:01 a.m. ET
“Argentine President Cristina Kirchner said the move to take over the private pension system was aimed at protecting investors from losses resulting from global market turmoil. “
HUNGARY: Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare’ for Some, by Zoltan Simon – Nov 25, 2010 9:24 AM ET,
“Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension. …a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.
Hungary, the most indebted eastern member of the EU, is following the example of Argentina, which in 2001 confiscated about $3.2 billion of pension savings before the country stopped servicing its debt. The government in Buenos Aires nationalized the $24 billion industry two years ago to compensate for falling tax revenue after a 2005 debt restructuring.
In Hungary, employers set aside 24 percent of each worker’s salary for pension contributions and employees are required to pay 10 percent. Forcing workers back into the state system means the government will retain control of all that money, rather than transferring a portion to the private funds.”
IT HAS ALREADY HAPPENED IN AMERICA
Americans tend to think that “bad” governments in other countries do bad things to their citizens, but it could never happen in here. I have to wonder what exactly they are looking at to continue to believe such baloney. It has already happened here. In the 1930’s our Saint FDR confiscated the gold of private Americans. (Almost simultaneously it became legal for Americans to have alcohol but illegal to hold gold.) In the 1980’s Bill Clinton and Newt Gengrich raided the meager holdings of Social Security and Medicare in order to leverage continued irresponsible spending at the Federal level. Almost $4 Trillion in Social Security and Medicare funds were converted to “non-marketable securities”. Read that I.O.U.’s that have never been sold to bond holders and are signed by people who are no longer in the government.
Though the SSA doesn’t state it directly, what this means is that the Treasury took $2.6 trillion in Social Security cash surpluses and transferred it to the federal government to spend on other government programs. (For context, the total net wealth of U.S. households is $54.9 trillion, according to Federal Reserve data.)
The fact that the Treasury bonds the Trust Fund received in return for that $2.6 trillion are non-marketable — that is, they aren’t bonds that can be sold on the global bond market — has led some observers to characterize them as worthless.
The Social Security Administration defends the worthiness of its special bonds in its FAQ page:
“The [surplus] money flowing into the trust funds is invested in U.S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.
Far from being ‘worthless IOUs,’ the investments held by the trust funds are backed by the full faith and credit of the U.S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.”
This debt to Social Security is called “intragovernmental holdings,” and it isincluded in the total national debt, along with other special Treasury securities held by other agencies.
The “Trust Fund” Is Not a “Lockbox”
What the Social Security website fails to explain is where the Treasury gets the money to redeem those bonds. The answer: It borrows the money on the global bond market by selling freshly issued real Treasury bonds.
The following excerpt is from the 1998 Senate Budget Committee session.
Hollings “What we’ve been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.”
“It should be obvious from the above that the government has for decades been taking the money intended to pay Social Security benefits and spending it as general revenue. The Social Security trust fund is filled with Government IOUs, and those people who insists Social Security is solvent are operating in the faith that T-bills are always good, because the taxpayer can always be forced to redeem them.
But there is a problem. There are so many T-bills in the Social Security fund that when the baby-boomers start applying for benefits, the sudden surge of T-bills being presented for payment would collapse the Federal System, because there are not enough young taxpayers to carry the extra load.
Regardless of the mechanism, the bottom line is that the government looted the retirement funds of Americans, and that means one of two things has to happen (and maybe even both). Either Americans will be taxed twice for the same benefits, or the benefits will be cut.
|The Myth of the Clinton Surplus , by Craig Steiner|
“The only debt that matters is the total national debt. You can have a surplus and a debt at the same time, but you can’t have a surplus if the amount of debt is going up each year. And the national debt went up every single year under Clinton. Had Clinton really had a surplus the national debt would have gone down. It didn’t go down precisely because Clinton had a deficit every single year. The U.S. Treasury’s historical record of the national debt verifies this.
A balanced budget or a budget surplus is a great thing, but it’s only relevant if the budget surplus turns into a real surplus at the end of the fiscal year. In Clinton’s case, it never did.”
You don’t have to believe me. Read the government propaganda on the subject:
America, you are next. The government wants to continue to make believe we don’t need savings in order to make investments. The government wants to control everything as more of their stupid plans go out of control. If you have savings the government will not be able to control you the way it controls those without savings.
Don’t kid yourself. The government wants everything you have.
This is what comes of being afraid to let freedom win.