Are You Fed Up Yet?

In his State of the Union address, President Obama proposed an “effort to increase retirement savings by requiring all business to offer automatic IRA accounts.” So, you ask yourself, what’s wrong with that? It will make it easier for people to save for their retirement; to take responsibility. After all, isn’t that what all the conservatives are always harping about – people need to take responsibility. Sir Walter Scott observed, “Oh what a tangled web we weave, when first we practice to deceive.”
The Treasury and Labor departments are asking for public comment on "the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams." This "conversion" may start out as an optional choice, but choices have a strange way of turning into mandates when the Federal Government and citizens’ money are involved.

You think I jest? Then explain the hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on "redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute."

It sounds an awful lot like Social Securities, doesn’t it? And just like Social Securities, they’ll be leaving nothing to back up their political promises but their political promises. Just like they’ve raided and spent all the funds in the Social Security trust, they now have their insatiable sights on your retirement account.

For those of you who still can’t see any reason to be concerned, let me spell it out for you. The crock of bananas they’ll be selling you is that you’ll be “investing” your retirement savings in U.S. Treasury bonds. They’ll take your money with a promise to pay you a monthly benefit after you retire.

Only one problem. There’s a good chance benefits based on Treasury bond interest rates will result in inadequate compensation for your years of savings. The government has deliberately held down Treasury yields during the current crisis and it will be to their benefit to continue this practice using various means once they get their hands on your money. What it means to you is you lose. You will lose actual purchasing power! And you thought your elected officials were supposed to look after your best interests.

But take comfort. Those duplicitous politicians are going to offer you a nice con job to get you to go to the slaughterhouse willingly. The government will help employers find an administer for the accounts. They’re mulling over expanding a tax credit to match 50 percent of the first $1,000 contributed by families earning as much as $65,000 and a partial credit to families earning up to $85,000. The tax credit would be refundable so that even families with no tax liability would receive it. There’s nothing like getting something for nothing!

So, why are the politicians rubbing their hands together and licking their chops? Retirement accounts make up 35% of all private assets. There is over $15 trillion sitting in tax-deferred retirement plans. There is $4 trillion in IRA accounts alone. The government is broke and the politicians see your retirement account as an easy source of money to support their out-of-control spending habit. They don’t want just the taxes they’d collect when the funds are taken as a distribution, they want it all. Think of it like a drug addict who thinks he has the right to your property to support his habit.

This is just the latest chapter in what is developing into a war by the progressives on America's seniors. All that class-war rhetoric about "the rich" ends up targeting seniors, who tend to have accumulated the most in savings and investment on average because they have been around the longest.

Aren’t you sorry you did the responsible thing. You are a sucker because you saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. All of this reflects a fundamental problem underlying socialist economic policies. If the government keeps punishing responsibility and rewarding failure, society ends up with a lot less responsibility and a lot more failure, destroying prosperity in the process.

As former British Prime Minister Margaret Thatcher said, "The trouble with socialism is you run out of other people's money to spend." And now they want to spend your retirement savings.

Are you fed up yet?

Posted by Lynda Gurr 02/22/2010















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