View Full Version : Feds Eyeing Taking Private Retirement Accounts
For our protection, of course. Estimated private retirement accounts at almost $20 trillion.
http://www.zerohedge.com/news/2013-02-02/government-generously-offers-help-you-manage%E2%80%9D-your-retirement-account#comments
I've heard rumors about this for the last couple of years. Looks like they may be warming up in the bullpen. The CFPB is the new federal agency created as a result of the financial meltdown via the Dodd-Frank bill. They are under the Federal Reserve, so not much in the way of direct accountability to Congress.
This could be the greatest robbery of all time. It would certainly offset record deficit O has racked up. I am sure it's just coincidence that the $17 trillion deficit is a little less than the $19 trillion in account balances. Hell, they'll have a couple trillion left for some new social welfare programs.
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Argentina and I think some Eastern European countries since the start of the 2008 crisis has nationalized private retirement accounts.
So there is recent international precedent.
One possibility would be to compel or shape retirement account purchase of US T Bills.
But I still reckon probability still lies with theft by inflation rather than confiscation.
What bothers me in the new government agencies, new employees, and new authority.......the old agencies with the old legislation would work fine if they were given the top cover, direction, and proverbial hunting license to effectively regulate/enforce the law in a fair and equitable manner.
The President's selection of Mary Jo White to the SEC is like the head of the FBI's job going to Tony Soprano's lawyer or to the head of the legal department for a foreign intelligence service.
Those blatant/brazen appointments worry me a bit more than retirement account confiscation.....since they're already being looted by inflation.
A couple of good summaries on the "rumors" of retirement plan seizure:
http://www.nationalseniorscouncil.org/index.php?option=com_content&view=article&id=89%3Aobama-begins-push-for-new-national-retirement-system&catid=34%3Asocial-security&Itemid=62
A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.
The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.
"This hearing was set up to explore why Americans are not saving as much for their retirement as they could," explains National Seniors Council National Director Robert Crone, "However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up."
A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a "government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation)." She proclaimed that even "private annuities are problematic."
Such "reforms" would effectively end private retirement accounts in America, Crone warns. "These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system."
Deputy Treasury Secretary J. Mark Iwry, who presided over the hearing, is a long-time critic of 401k plans because he believes they benefit the rich. He also appears to be one of the Administration’s point man on this issue...
October 13, 2010
http://www.nationalseniorscouncil.org/index.php?option=com_content&view=article&id=112:private-savings-accounts-may-on-the-table-in-fiscal-cliff-talks&catid=37:taxes-and-government-spending&Itemid=65
Private Savings Accounts May Be "On the Table" in Fiscal Cliff Talks
Monday, 19 November 2012 15:01
As part of the Administration’s continuing drive to redistribute wealth, the National Seniors Council believes that tax-deferred contributions to retirement plans like 401(k)s and IRAs may very well be on the table in bipartisan budget negotiations going on right now between Congress and the White House.
NSC will vigorously oppose any such “compromise.”
Liberals in Washington have long maintained that the favorable tax treatment of such contributions is effectively a “subsidy” to people who can afford to save for retirement and is not only unfair but a significant cause of the current government debt crisis. Therefore, it is quite likely that some type of limitation on how much “wealthy” individuals will be allowed to save using these investment vehicles is being insisted on by the Administration.
Since President Obama first came into office his Administration has made no secret of its desire to overhaul the way Americans save for retirement. This new National Retirement System will force virtually all Americans into government-run Guaranteed Retirement Accounts and do away with private retirement accounts entirely. Congressional Democrats held hearings on this very issue in 2008, an alliance of labor unions and left-wing groups have founded Retirement USA, a non-profit lobbying group, and legislation limiting the ability of individuals to control their private savings is currently pending before Congress.
S. 1020, the Savings Enhancement by Alleviating Leakage in 401(k)Savings Act sponsored by liberal Senator Herb Kohl, specifically limits the rights of individuals to borrow from their own private retirement accounts and is a dangerous first step towards government control over all private retirement savings. NSA opposes this legislation and will fight any effort to reintroduce it or any similar type of bill in the next Congress which convenes in January.
We urge all Americans who oppose this new National Retirement System scheme to sign our online petition and to contact their representatives in Congress. While the confiscation of private savings will not happen tomorrow, the Administration is laying the groundwork for this scheme right now by attempting to limit the ability of all Americans to take care of themselves and save for their futures independent of the federal government....
The Democrats of course deny that this plan is even on the table. And the spin by liberal media outlets and progressive "fact checkers" mock those who would even think that the government would even try to take over private retirement accounts.
Of course, all of the things they insisted would not happen with Obamacare are coming true. And none of the benefits of Obamacare that they assured us would occur not only have not ocurred, but the "benefits" are having exactly the opposite impact.
The amount of money sitting in those accounts is way too tempting for progressives to ignore. They can play "Robin Hood" and roll out the class warfare rhetoric to convince the majority of voters that the "rich" are not contributing their fair share to fix the economy (rememebr their Tax increase arguments?).
While they would have to go door to door to confiscate our firearms, they could accomplish this grand theft through institutional transfers from banks and brokers.
It is going to be a LONG 4 years.
But I still reckon probability still lies with theft by inflation rather than confiscation.
One more quarter with negative GDP and we quit sliding and just drop off.
GratefulCitizen
02-03-2013, 13:15
One possibility would be to compel or shape retirement account purchase of US T Bills.
But I still reckon probability still lies with theft by inflation rather than confiscation.
Already happened to the banks with Basel III tier-one capital requirements and the risk-weighting of government debt.
IIRC, many public pensions are required to hold a high ratio of government debt.
With government debt service costs pushed low enough, it doesn't take much inflation for a stealth default.
Financial repression in action.
The Reaper
02-03-2013, 13:37
Wait till they see what the layoff of 800,000 government employees does under sequestration.
That hit, even if spread out over six months, will not be minor.
I expect my 401Ks and IRAs to be seriously taxed or seized in the next ten years.
Kind of reminds me of Aesop'd fable of the ant and the grasshopper (our 51%).
TR
Should they do this, they will have to ban possession of precious metals, gems, etc. in quantity.
Zimbabwe here we come!
Just trying to push my Alcoa stock up.
GratefulCitizen
02-03-2013, 14:30
Should they do this, they will have to ban possession of precious metals, gems, etc. in quantity.
Zimbabwe here we come!
Just trying to push my Alcoa stock up.
Inflation will not be economy-wide.
It will primarily occur in services, especially in healthcare.
There will probably be deflation in the assets of those retiring.
The government wants a piece while there's still value.
A large generation is moving into retirement with a smaller generation behind them.
The large generation will purchase certain services and sell, or not buy, certain goods.
The smaller generation behind them have fewer to provide services, and fewer to purchase goods.
The laws of supply and demand cannot be repealed.
Should they do this, they will have to ban possession of precious metals, gems, etc. in quantity.
Zimbabwe here we come!
Just trying to push my Alcoa stock up.
Lead will still hold its value!!!
One more quarter with negative GDP and we quit sliding and just drop off.
It's interesting how that negative quarter has scared some folks.
I know folks who are paying attention aren't too surprised, but the kind of folks who are relatively intellgent but disinterested are starting to sit up and notice.
To me that negative quarter coming off the back of some reduced government spending with the pending sequestration is just another data point of the damned if you do and damned if you don't position of the US economy.
It could have been fixed sooner and easier, but the can kept being kicked down the road.
It reminds me of a room full of partygoers.
If they let the party stop at midnight the next day's hangover would suck but be manageable and over before you know it.
It's now 6am, and we're running out of booze and room on the bar tab......it's going to be a rather nasty hangover. :(
Already happened to the banks with Basel III tier-one capital requirements and the risk-weighting of government debt.
IIRC, many public pensions are required to hold a high ratio of government debt.
With government debt service costs pushed low enough, it doesn't take much inflation for a stealth default.
Financial repression in action.
Keep an eye on Eric Janszen over at iTulip.com.
He's been so right the last 12+ years it's actually kinda spooky.
He's thinking the US will do anything BUT default.
But I think he's coming up short on the big picture military/geopolitical stuff that could be directly related to it.
Lead will still hold its value!!!
It's funny you mention lead.
I'm glad I got my hands on Saffie 7.62 back in the day, but I don't want to shoot it because my replacement cost is like 5-6 times higher now. A better return on that than most stock shares.
On the commodity of lead, it's interesting to see lead prices have climbed substantially over the years. Jim Rogers was a lead(and overall commodity) bull quite a number of years ago and his followers have done quite well.
Lead and lead have been on a bull run.
Inflation will not be economy-wide.
It will primarily occur in services, especially in healthcare.
There will probably be deflation in the assets of those retiring.
The government wants a piece while there's still value.
A large generation is moving into retirement with a smaller generation behind them.
The large generation will purchase certain services and sell, or not buy, certain goods.
The smaller generation behind them have fewer to provide services, and fewer to purchase goods.
The laws of supply and demand cannot be repealed.
Some of the stuff regarding this economic mess I think I have a better than average handle on, other parts I try to be humble enough to say "I haven't a clue, only a guess."
But from an outside perspective looking in there's some additional weird stuff going on I've seen up close and personal that I think puts a small positive spin on things for the US.
Traveling to both Australia and the US on a regular basis there's something I've noticed in the last 12 months that's quite troubling(for Australia/NZ) and quite positive(for the US).
Real estate prices.......
At the moment you can purchase 3-4 modern and roughly equivalent middle class homes in Florida(say within an hour of Orlando) for 1 modern and roughly equivalent middle class home in places like Brisbane and Auckland with similar infrastructure and local economic diversity.
It might suck pretty bad in the US, but I think it's possibly far closer to the bottom than other similar countries.
So there might be some good news when put in perspective.
GratefulCitizen
02-03-2013, 16:31
Some of the stuff regarding this economic mess I think I have a better than average handle on, other parts I try to be humble enough to say "I haven't a clue, only a guess."
But from an outside perspective looking in there's some additional weird stuff going on I've seen up close and personal that I think puts a small positive spin on things for the US.
Traveling to both Australia and the US on a regular basis there's something I've noticed in the last 12 months that's quite troubling(for Australia/NZ) and quite positive(for the US).
Real estate prices.......
At the moment you can purchase 3-4 modern and roughly equivalent middle class homes in Florida(say within an hour of Orlando) for 1 modern and roughly equivalent middle class home in places like Brisbane and Auckland with similar infrastructure and local economic diversity.
It might suck pretty bad in the US, but I think it's possibly far closer to the bottom than other similar countries.
So there might be some good news when put in perspective.
Not saying the US economy, as a whole, is going to be bad.
Just saying that an individual has to be aware of the implications of demographics, particularly if they are nearing retirement.
An individual can find benefit, or at least mitigate problems, if they are aware.
Clustering with the herd will result in being fleeced.
Monsoon65
02-03-2013, 17:20
Does anyone want to bet that when (not if) this happens, any private retirement accounts held by Congress will be exempt? Or that they will not be require to invest in any sort of government sponsored retirement account?
Edit to add: Might as well start saving my money in a shoebox under the bed.
Surf n Turf
02-04-2013, 11:33
Might as well start saving my money in a shoebox under the bed.
If you save Silver under the bed, you should be GTG
Watch out when your city files Chapter 9 ;)
SnT