Monday, May 10, 2010

Evita Obama

Some jumpy folks have been examining regulatory proposals, Requests or Information, and comments by Joe Biden and concluded that the Left is planning to "solve" the deficit problem by seizing the billions of savings in the nation's 401(k) plans and replacing them with a government "annuity." Powerline looks at the prospects for such an *Argentinian* turn of events: Are The Feds Preparing To Nationalize Your Retirement Savings?

You can read the Labor and Treasury Departments' Request for Information in the Federal Register. Its main theme is that the private-sector trend is toward defined contribution plans and away from defined benefit plans, and that, for some reason, plan beneficiaries don't choose lifetime annuity products as often as some bureaucrats think they should. So the federal government is looking for ways to promote lifetime annuities.

There are, of course, benefits to such products. There are also drawbacks; most notably, they do not allow the saver to leave money to his children. If you die prematurely, you are just out of luck. In that respect as in others, lifetime annuities look a lot like Social Security. It is not clear why the federal government should be in the business of promoting one form of retirement product over another.

But, while the Request for Information definitely exhibits a paternalistic attitude, it doesn't explicitly say anything about confiscating 401(k) accounts, or about the government taking on the role of annuity issuer.

We have been living through the death throes of the welfare state, as the advocates of Big Government have flailed desperately for two years to keep the whole thing together for a little while longer (at least until the Asian market opens...), but the hits keep coming as nation-states from Greece to Britain to California to the US face mounting deficits and political paralysis.

Sadly for us, the redistributionists are on complete control of the levers of power, which gives them incentive and opportunity to cast about for any nickels or dimes that can keep the money machine whirling. But, seizing 401(k) plans? If that ever comes to pass, we can assume the revolution will begin the following day because seizing people's savings in order to pay off government obligations will be the Rubicon - the moment when the Left's calls for "fairness" and "social justice" will turn to simple theft to benefit the unproductive at the expense of the productive.

It would be an extreme step, and one that could only be justified by World War III. It's hard to believe that even the hardest left American progressive would do such a thing, but we live in interesting times. Powerline concludes:

At this point, I think the best we can say is this: the federal government is desperate for cash, and the biggest untapped source of wealth is the hundreds of billions or trillions of dollars that Americans who are now nearing retirement age have saved over their lifetimes. I don't doubt for an instant that the Obama administration would like to get its hands on this money, which would go a long way toward resolving the current government debt crisis. An obvious way of doing so is to take the money now, in exchange for a promise to pay an "annuity" later. The bottom line is that, given what we know about the Obama administration's rapacious appetite for swallowing up private wealth, anyone who has savings should be vigilant.

Words to live by under any circumstance.

1 comment:

  1. Whenever i see the post like your's i feel that there are still helpful people who share information for the help of others, it must be helpful for other's. thanx and good job.

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