Is the Fed looking to usurp your retirment funds?

[Veldan Rath]

THE GOVERNMENT WANTS YOUR RETIREMENT
By
Neal Boortz

I've been telling you about this for a while now. This, to me, is one of the most dangerous schemes currently slithering through the crevices and dark spots of the Imperial Federal Government in Washington. What am I talking about? What I believe to be plans by the Obama administration to, in effect, seize your retirement funds and use them to finance their deficit spending. Remember ... there are more than $3 trillion dollars sitting out there in individual retirement, IRA and 401K plans. Politicians just cant stand the idea of this much money sitting out there in private investments ... out of the grasp of politicians. So .... Something needs to be done. And sure enough, something is going to be done. The Treasury Department and the Department of Labor were going to start taking comments on ways to promote the idea converting 401(k) savings and IRAs into annuities or other steady payment streams. Well you can finally take a look at this document for yourself:

Request for Information Regarding Lifetime Income Options for Participants and

Beneficiaries in Retirement Plans

Here, I'll post a little to get you started:

The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this request for information is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue.

That's a lot of government-speak. Can you read between the lines? What is the real plan here? Behind this nonsense about "lifetime stream of income after retirement" language is a lovely little plan to force you to finance the Democrat's deficit spending. The plan is to play into the current economic fears. "Never let a good crisis go to waste." Remember the words of Rahm? The Democrats want you to question whether or not Wall Street is the right place to invest your money. Wouldn't you be safer if the government kept it for you? The government wants you to believe that it can do a better job of investing and managing your retirement than you can. And for a lot of people who believe that government is the answer, they may fine with this. It's not fine with me, and, I suspect, it's not all that fine with you.

Don't believe me? Here is how these agencies present their reasoning:

Accordingly, with the continuing trend away from traditional defined benefit plans to 401(k) defined contribution plans and hybrid plans ... employees are not only increasingly responsible for the adequacy of their savings at the time of retirement, but also for ensuring that their savings last throughout their retirement years ... In recognition of the foregoing, the Agencies are considering whether it would be appropriate for them to take future steps to facilitate access to, and use of, lifetime income or other arrangements designed to provide a stream of income after retirement.

Here is one of the questions asked in this document from the Treasury Department and the Department of Labor:

13. Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so, should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship?

Okay, what is this question really asking? First, it wants to know if the government should FORCE you to contribute money to an income distribution option. Then the second part of the question wants to know if this should be the standard retirement option, unless you choose to also put your money elsewhere.

OK .. I'm a little disjointed here. Let me try to wrap up all of this up in one neat package.

Obama's budget is setting records in deficit spending. Obama is proposing borrowing every close to the amount of money that the Republicans borrowed in a single year .. but Obama is proposing borrowing that sum EVERY SINGLE MONTH throughout his term of office and beyond.

Earlier this week I told you of a story from the investment press which stated that investors now look at blue chip stocks like Coca Cola as better and safer investments than U.S. Government treasury certificates. China has signaled that it is not in the mood to buy many more U.S. government securities. This is how we finance our debt! If investors and other nations won't voluntary finance our debt, what does our government do? Well, our government does what governments always do. Fall back on its unique ability to use force to accomplish its goals. There's a problem here. We aren't going to force China to buy more Treasuries ... so where is the force to be applied? YOU, that's where.

The government is talking about some form of "lifetime income distribution" and "lifetime stream of income." (Isn't this what Social Security was supposed to do?) But just HOW does the government provide this "lifetime" income? Simple ... by FORCING you to take all or a portion of your retirement funds and invest them where China won't go; invest them where private international investors no longer want to go; invest them in Treasury Certificates. Oh yeah ... they'll probably come up with some fancy new name for some fancy new type of T-bill ... but the goal and the effect will be the same. You'll see your money seized by government and used to finance the insane spending plans of politicians .. Democrat and Republican.

Stay alert folks. The government has wonderful ways to couch this in language that seams harmless and innocuous. It's a money-grab. Nothing less.
------

A lot of word smithing on here,and I was hoping for a Loki or similar to review and see if that is where this looks like this is heading...

[Loki]

I wouldn't pay much attention to this until it gets higher up the chain of command. Zany ideas are proposed and reviewed all the time. Until this is getting looked at in Congress, I'd ignore it.

[Veldan Rath]

I'd just be worried that by the time Congress starts looking into it, it will be too late.

Anhyoo, does anyone here think this is a good idea?

[Loki]

Why would it be too late? Can you imagine the vitriol that will be leveled at the Democrats if they even propose this?

[Ziggy Stardust]

Is there a link available perhaps?

Obama is proposing borrowing every close to the amount of money that the Republicans borrowed in a single year .. but Obama is proposing borrowing that sum EVERY SINGLE MONTH throughout his term of office and beyond.

http://www.politifact.com/truth-o-me...nder-republic/

Since article is parroting, I'm not sure what to believe.

[Veldan Rath]

Is there a link available perhaps?



http://www.politifact.com/truth-o-me...nder-republic/

Since article is parroting, I'm not sure what to believe.

http://boortz.com/nealz_nuze/index.html

This only to the article above.

You will have to take Boortz with a grain of salt.

[Veldan Rath]

Why would it be too late? Can you imagine the vitriol that will be leveled at the Democrats if they even propose this?

I'm sure the same was said of the income tax and prohibition.

Looney shit gets passed all the time. Just let the right 'crisis' come up, scare the populace, and voila!

[Loki]

I'm sure the same was said of the income tax and prohibition.

Looney shit gets passed all the time. Just let the right 'crisis' come up, scare the populace, and voila!

Not really. There was genuine popular support for the prohibition, and the income tax was necessary when it was passed (it also required a constitutional amendment, which suggests across-the-board support for it).

[Veldan Rath]

And both were found to have some pretty hefty unintended consequences.

Also the income tax originally proposed was nowhere near the monstrosity it is now. I believe it was only to impact the top 5%...so of course it passed...

[Loki]

Is there a link available perhaps?



http://www.politifact.com/truth-o-me...nder-republic/

Since article is parroting, I'm not sure what to believe.

Obama is planning on running a $1.3 trillion deficit after next year (when we're long out of a recession). Bush's deficits were about a third of that if you exclude recessionary spending. Furthermore, Obama has absolutely no intention of cutting spending. He's relying on revenue going up once the economy recovers to make up for half the shortfall (to get the deficit down to a tiny $600 billion). That means he managed to sneak in a permanent trillion dollar spending increase. I fail to see how anyone can claim its intent is to simply battle a recession. And let's keep in mind that the healthcare bill hasn't passed yet; once it does, we're looking at increasing the deficit by another several hundred billion a year (starting after Obama leaves office, so make sure the next guy gets the consequences).

[LittleFuzzy]

I will note, Veldan, that there's another plausible explanation for this. It might actually be an attempt to improve the security and integrity of retirement savings. How many people have seen their accounts lose 1/3 to 1/2 their value over the last two years? It's just that sort of lost value from some defined benefit plans that prompted ERISA in the first place.

[Loki]

You're kind of missing the point there Fuzzy: at the way the US government is going, it's not inconceivable that the US treasuries will take a huge hit in value some day. An 8% deficit over the long run, which is what Obama is projecting (before the healthcare plan kicks in) is simply unsustainable, and might very well lead to the US government simply printing money.

[Veldan Rath]

I will note, Veldan, that there's another plausible explanation for this. It might actually be an attempt to improve the security and integrity of retirement savings. How many people have seen their accounts lose 1/3 to 1/2 their value over the last two years? It's just that sort of lost value from some defined benefit plans that prompted ERISA in the first place.

I think you are being too generous with the motives of the Imperial Federal Government.

[Loki]

Never attribute to malice what can be attributed to bureaucratic incompetence.

[Veldan Rath]

They are not mutually exclusive either.

[Veldan Rath]

This is not a dog vs. cat thing is it?

[Loki]

Most bureaucrats are too incompetent to be malicious.

[Veldan Rath]

But the malicious ones (or those with an agenda) rise to top in their field.

Either way, incompetent or malicious, this is a BAD idea.

[Hazir]

The way I understood the 'plan' is that the Obama government is going to promote the use of annuities for pensions for the simple reason that even though they may have drawbacks, they also give people bigger security with regards to their pension planning. The idea that annuities mean that 'your money will be confiscated by the FED' is based on nothing whatsoever. Populist hysteria is too kind a description of that article in the first post.

[LittleFuzzy]

You're kind of missing the point there Fuzzy: at the way the US government is going, it's not inconceivable that the US treasuries will take a huge hit in value some day. An 8% deficit over the long run, which is what Obama is projecting (before the healthcare plan kicks in) is simply unsustainable, and might very well lead to the US government simply printing money.

I'm not missing anything, Loki. I'm merely not addressing the topic you care about.

[LittleFuzzy]

I think you are being too generous with the motives of the Imperial Federal Government.

I didn't insist that's what they WERE doing. I merely pointed out that the knee-jerk "the government is out to get us" explanation was not the only rational interpretive scenario.

[Veldan Rath]

I didn't insist that's what they WERE doing. I merely pointed out that the knee-jerk "the government is out to get us" explanation was not the only rational interpretive scenario.

Fair enough.

[Being]

Not really. There was genuine popular support for the prohibition, and the income tax was necessary when it was passed (it also required a constitutional amendment, which suggests across-the-board support for it).

It did not require an amendment for the federal government to impose an income tax. Article 1 Section 8 of the constitution gives congress the power to lay and collect taxes.

Section 8 - Powers of Congress
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

[Loki]

Try again:

http://en.wikipedia.org/wiki/Sixteen...s_Constitution

[']['ear]

Wait, Veldan were you really such a dumbass as to quote us a Neil Boortz piece? Cool. Let's get some Ted Kaczinski stuff too!

[Being]

Try again:

http://en.wikipedia.org/wiki/Sixteen...s_Constitution

See the first Article, Section 8 of the constitution. They already had the power to lay and collect taxes. All the amendment did was get them out of a law suit about apportionment.

[Loki]

As much as you like to assume it, everyone on this forum isn't dumb.

[Being]

As much as you like to assume it, everyone on this forum isn't dumb.

What's that mean?

[Hazir]

Try again:

http://en.wikipedia.org/wiki/Sixteen...s_Constitution

Actually that article on wikipedia contradicts your claim.

[Loki]

Actually that article on wikipedia contradicts your claim.

What we mean by income tax today would have been impossible without that amendment, as it had numerous loopholes, including having to be uniform among the states. And the article supports my main point in that all three candidates running for office in 1912 supported the tax.