Holy stinkin' crap! (Pardon my language, but it would be even worse if I hadn't emptied my 401k in 2008 to keep a roof over my head and food on the table while I was unemployed.)
Newt Gingrich and Peter Ferrara's column Wednesday analyzed the latest to come out of the Treasury and Labor Departments.
You did the responsible thing. You saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. But now Washington is developing plans for your retirement savings.
BusinessWeek reports that the Treasury and Labor departments are asking for public comment on "the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams."
In plain English, 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.
This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "'Choices' have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your 'retirement' money to buy them."
Moreover, benefits based on Treasury bond interest rates may be woefully inadequate compensation for your years of savings. As Denninger adds, "What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI inflation index) so as to guarantee that you lose over time compared to actual purchasing power."
Congressional Democrats held hearings on the subject this past fall, and now the proposal is being run up the flagpole to see if it draws any fire. It darn-well better draw plenty.
This is just the latest chapter in what is developing into a war by the left on America's seniors. All that class-war rhetoric about "the rich" ends up targeting seniors, who tend to have accumulated the most in savings and investment on average because they have been around the longest.
All of this reflects a fundamental problem underlying socialist economic policies. If the government keeps punishing responsibility and rewarding failure, society ends up with a lot less responsibility and a lot more failure, destroying prosperity in the process.
As former British Prime Minister Margaret Thatcher said, "The trouble with socialism is you run out of other people's money to spend." And now they want to spend our retirement savings.
I left out quite a bit, so read the column to get the full effect. In the meantime, contact your (preferrably Republican) Congressman and ask him or her to introduce and/or co-sponsor legislation that would ban the raiding of your retirement savings.