Barack Obama’s money train has steamrolled uncontrollably across the country, compiling record-breaking budgets, deficits, and debt along its path. Now, the train is running out of fuel, and the nation’s retirement money may find its way on board, to keep the train on the tracks.
Earlier this year, the U.S. Treasury and Labor Departments began a public discussion on the aim to convert 401(k) saving plans and Individual Retirement Accounts (IRAs) into annuities and other forms of guaranteed income streams. Deputy Assistant Treasury Secretary Mark Iwry stated, “the question is how to encourage it, and whether the government can and should be helpful in that regard.” The supposition that the government is looking to be helpful with this proposal should automatically cause alarm.
The rationale for what would ultimately serve as a government takeover of the nation’s private pension system is of the same mold as the position Obama and Congressional Democrats have staked throughout the debate on health-care reform; “trust us, we know better than you”. Their assertion is that a weakened economy and a volatile stock market call for them to protect you and your interests, in this case your retirement money.
Last month, Newt Gingrich and Peter Ferrara editorialized on the Investor’s Business Daily website:
“The idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years. They will tell you that you are “investing” your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.”
If such a scheme sounds familiar to you, that’s because it is–cue Amos Lee’s I’ve Seen It All Before.
When Obama-mania was sweeping the world, and the then-Senator from Illinois was weeks away from making history, Argentina was searching for a solution to keep its own runaway train on the tracks–in hopes of improving its ability to service the nation’s debt and prevent another national default. Socialist President Cristina Fernandez de Kirchner’s solution came in the form of the seizure of the $30 billion Argentines had amassed in their private pension funds and immediate transfer of the money into the nation’s social security system. Unsurprisingly, her administration defended the nationalization of the system as a means to guarantee pensions during a time of global economic uncertainty, and attacked the private system’s administrators who criticized the government’s intervention.
In February, Obama unveiled his budget for fiscal year 2011 which includes a proposal to require small businesses to establish automatic IRAs for employees. With his cronies from the financial services industry by his side, the measure is being marketed as a means to create a nation of savers. But this proposal wasn’t conjured up with your interests at heart. In actuality, the president is licking his lips, with his eyes set on sweetening an already massive lottery jackpot for the government.
As of the third quarter of 2009, Americans held a combined $8 trillion in 401(k) plans and IRAs, according to the most recent retirement market report from the Washington D.C.-based Investment Company Institute. Furthermore, his proposal for health-care reform calls for an extension of the 2.9% Medicare tax to unearned income, which means those annuities and other forms of guaranteed income streams you would receive in exchange for relinquishing the freedom you currently possess over your retirement funds, would be subject to taxation. The American people consistently lose when the government desires to be helpful.
The presidency of Barack Obama is nearly 14 months old, and the campaign-feel good rhetoric waxed about the Change We Need in Washington has materialized into the concoction of a young president channeling his inner-Daley to transform the nation’s capital into Chicago on the Potomac. Now, the citizenry of this nation should prepare for him to channel his inner-Kirchner to provide a taste of Argentine politics.
Unfortunately, it won’t taste as good as the steak.
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