Thursday, February 7, 2013
Tuesday, February 5, 2013
Government Loves You So Much It Wants To Help Manage Your Retirement Account
posted on by
I don’t know which is worse, that the government makes obvious moves to loot the people or that they are able to so easily announce such moves and everyone lets them do it. In my opinion, this Bloomberg headline is a fire alarm. “Retirement Savings Accounts Draw U.S. Consumer Bureau Attention”:
What about JPMorgan Chase and others? Are they completely trustworthy? I doubt it. But since when has the Federal Government shown any real interest in holding them accountable for fraud and other possible malfeasance? These groups are two big to fail and thus too big to jail. The government continues to bail them out. Furthermore, when we look at the role of Fannie Mae in the housing crisis (to name just one example) we don’t see any reason to hope that the Federal Government can protect us from financial fraud and corruption. On the contrary, they encourage it. They are at the center of it.
I don’t think this should be debatable: the group that encourages us to trust in Social Security is not going to protect our interests if they take over the management of our retirement accounts. This is just a new larceny. They’ve tapped out their old ways of pillaging us and are now looking for a new way.
The old way was to justify the housing bubble on the grounds of helping the poor and minorities get housing. The next scam may have a similar rationalization. According to the New York Times, Deal Book blog:
Jackson made this at a major meeting that included Bill Clinton and other establishment ruling class figures. As insane as it sounds, there is no reason to think that the idea won’t be used to justify robbing America’s retirees.
I don’t know which is worse, that the government makes obvious moves to loot the people or that they are able to so easily announce such moves and everyone lets them do it. In my opinion, this Bloomberg headline is a fire alarm. “Retirement Savings Accounts Draw U.S. Consumer Bureau Attention”:
“The U.S. Consumer Financial Protection
Bureau is weighing whether it should take on a role in helping Americans
manage the $19.4 trillion they have put into retirement savings, a move
that would be the agency’s first foray into consumer investments.
‘That’s one of the things we’ve been exploring and are interested in in
terms of whether and what authority we have,” bureau director Richard
Cordray said in an interview. He didn’t provide additional details.’”
So, basically, they will do it if they can get away with it. This
story didn’t seem to raise an eyebrow when it appeared. Over the weekend
“Tyler Durden” at ZeroHedge noticed it:
“The obvious concept is that when the
government runs out of money, or they face a drying up in interest for
its debt, they will come for the $19.4 trillion in American’s retirement
accounts. It seems that day may be finally drawing near. I stopped
contributing to my 401k back when I worked at Bernstein, and I will
probably now have to give more serious consideration whether I want to
take the penalty and move the funds out of my retirement account
entirely. I haven’t made any decisions, but will be watching closely.”
The excuse for this self-assumed “role in helping” us manage our
retirements accounts is that the private sector should not be trusted:
“The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams,
according to three people briefed on the CFPB’s deliberations who asked
not to be named because the matter is still under discussion. The
retirement savings business in the U.S. is dominated by a group of
companies that handle record-keeping and management of investments in
tax-advantaged vehicles like 401(k) plans and individual retirement
accounts. The group includes Fidelity Investments, JPMorgan Chase &
Co. (JPM), Charles Schwab Corp. (SCHW) and T. Rowe Price Group Inc.
(TROW).”
Well, no one needs to wonder if they have fallen prey to a scam,
because there is no reasonable doubt about it—they have! The scam is
called Social Security. Another is called Medicare. Yet these people are
going to be trusted to protect us from scams?What about JPMorgan Chase and others? Are they completely trustworthy? I doubt it. But since when has the Federal Government shown any real interest in holding them accountable for fraud and other possible malfeasance? These groups are two big to fail and thus too big to jail. The government continues to bail them out. Furthermore, when we look at the role of Fannie Mae in the housing crisis (to name just one example) we don’t see any reason to hope that the Federal Government can protect us from financial fraud and corruption. On the contrary, they encourage it. They are at the center of it.
I don’t think this should be debatable: the group that encourages us to trust in Social Security is not going to protect our interests if they take over the management of our retirement accounts. This is just a new larceny. They’ve tapped out their old ways of pillaging us and are now looking for a new way.
The old way was to justify the housing bubble on the grounds of helping the poor and minorities get housing. The next scam may have a similar rationalization. According to the New York Times, Deal Book blog:
“There’s been no shortage of ideas for
how to jump-start economic growth in the aftermath of the financial
crisis. But a new one comes with a high-profile backer: the Rev. Jesse
L. Jackson. At a three-day conference in New York that began on
Wednesday, Mr. Jackson discussed a proposal for increasing the
availability of capital by using pension money to make loans in
low-income communities. The idea is getting a prominent debut at the
16th annual Wall Street Project Economic Summit, hosted by Mr. Jackson’s
Rainbow PUSH Coalition and the Citizenship Education Fund. ‘We’ve got
to think outside the present fiscal-cliff-debt-ceiling box,’ Mr. Jackson
said in an interview on Wednesday. ‘We must have some plan for
reconstruction.’”
Right. That’s exactly what I want to do with my savings for retirement–risk it all in loans to people who can’t pay me back.Jackson made this at a major meeting that included Bill Clinton and other establishment ruling class figures. As insane as it sounds, there is no reason to think that the idea won’t be used to justify robbing America’s retirees.
Sunday, February 3, 2013
Now Obama wants your 401(k) Treasury, Labor on path to nationalize retirement
by
Subscribe to feed
Remarkably, those financial professionals specializing in private retirement savings and the U.S. citizens investing in private retirement plans now face the possibility the Obama administration and its allies on the political left will impose rules and regulations that effectively abolish the private retirement savings and investment markets.
Government takeover?
An Investment Company Institute study published this month found that U.S. retirement assets totaled $18.5 trillion at the end of the second quarter 2012, of which 3.5 trillion was in IRAs and $5.1 trillion was in 401(k) plans.
Since 2010, the U.S. Treasury Department and the Department of Labor have been holding combined hearings on various plans designed to introduce government-mandated retirement plans and investment options, including government annuities invested primarily in U.S. Treasury debt, into the private retirement savings market.
“This hearing was set up to explore why Americans are not saving as much for their retirement as they could,” explained National Seniors Council National Director Robert Crone, describing a recent Treasury-Labor hearing held in the Labor Department’s main auditorium.
“However it is clear that his is just the first step toward a government takeover. It feels like the beginning of the debate over health care and we all know how that ended up.”
‘Automatic IRA’
With the issuance of the White House 256-page Budget Proposal for Fiscal Year 2013, the Obama administration endorsed “Automatic IRAs,” a plan introduced into Congress in 2010 by Sens. John Kerry, D-Mass, and Jeff Bingaman, D-N.M., in which private companies would be automatically enrolled into government-mandated IRAs, forcing those businesses to contribute on behalf of their employees a “default amount” equal to 3 percent of an employees pay, unless an employee specifically opts out of the plan.
The FY 2013 Budget proposal notes that currently 78 million working Americans, roughly half of the work force, lack employer-based retirement plans.
According to testimony given by David C. John of the Heritage Foundation to the House Committee on Ways and Means on April 17, most of the 78 million working Americans not participating in employer-based retirement plans are part-time employees of smaller businesses, women, members of minority groups or all three.
The remedy proposed on page 147 of the FY 2012 Budget Proposal is “a system of automatic work-place pensions that will expand access to tens of millions of workers who currently lack plans” by providing their employees with a government-mandated “direct deposit IRA account,” exempting only businesses with 10 or fewer employees and providing participating businesses with tax credits to compensate for the businesses implementing and administering the plans.
While the Automatic IRA would serve the purpose of extending private retirement plans to disadvantaged and generally poorer workers, the innovation would place additional costs upon employers. It would require employer contributions to the plans, even if tax credits fully complemented the businesses for implementing and administering them.
Retirement USA
The Service Employee International Union, or SEIU, a key labor union ally of the Obama administration, has mounted an effort to create government-mandated worker retirement accounts as an entitlement program, with the possibility that a portion of all private retirement funds could be forced into U.S. Treasury debt.
Branding the program “Retirement USA,” the SEIU has joined with the AFL-CIO, the Economic Policy Institute, a Washington-based economic left-leaning think tank that receives substantial labor funding, and two other left-leaning interest groups, the Pension Rights Center and the National Committee to Preserve Social Security.
The Retirement USA idea is promote the concept that all workers in the U.S. have a right to a government retirement account that would fund a secure retirement with adequate dollars, in addition to Social Security and private ERISA-retirement workplace retirement programs such as 401(k) programs.
“Our goal is to involve all workers and all employees in a government-mandated retirement program, with the government putting up the difference for lower paid employees,” Nancy Hwa, a spokeswoman for the participating Pension Rights Center, told WND in 2010.
Put simply, the Retirement USA government-mandated workplace retirement account would require by law employers and employees to contribute to a retirement account for every employee and demand that a portion of that contribution go into a federal-government created annuity that would be funded by purchasing Treasury debt.
“Retirement USA is basically an effort that amounts to nationalizing 401(k)s and IRAs,” David John, a senior research fellow at the Heritage Foundation, told WND when the Retirement USA idea was proposed two years ago.
Under the guise of making workplace retirement savings accounts available to all Americans and insuring that existing retirement savings accounts pay lifetime income, the SEIU-led Retirement USA effort is quietly exploring strategies that would create “Universal IRAs” or “Guaranteed Retirement Accounts” for all workers.
Following lead of Argentina
Writing in the London Telegraph in October 2008, business and economics editor Ambrose Evans-Pritchard warned that G7 nations, including the United States, may begin following the path of Argentina in forcing privately managed pension funds to be invested in government-issued debt.
In 2008, Argentine sovereign debt was trading at 29 cents on the dollar, reflecting the devalued state of the Argentine peso, with the result that private pensioners holding government debt in their retirement accounts could not be assured those bonds would have any meaningful value at maturity.
“Here is a warning to us all,” Evans-Pritchard wrote. “The Argentine state is taking control of the country’s privately managed pension funds in a dramatic move to raise cash.”
He warned the same could happen in the United States and Europe.
“The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property, I notice,” Evans-Prichard warned. “It is a foretaste of what might happen across the world as governments discover that tax revenue and the bond markets are unwilling to plug the gap.”
Currently, as reported Friday by the Financial Times, Argentina is facing yet another bond default after U.S. District Court Judge Thomas Griesa ruled that an upcoming payment to holders of the debt-swap bonds Argentina issued in 2005 and 2010 must be accompanied by a payment in full of $1.3 billion. The payment is to be made to two U.S. hedge fund creditors that did not accept the 2005 and 2010 debt swaps proposed for the bonds Argentina defaulted on in 2001.
Subscribe to:
Posts (Atom)