Paul Hsieh Posted February 24, 2010 Report Share Posted February 24, 2010 PajamasMedia has just published my latest OpEd, "Government Grab of Retirement Accounts a Matter of 'Social Justice'". In this piece, I criticize the latest Obama Administration proposal to convert some of our private 401(k) retirement money into government annuities in order to help prop up the failing Social Security system. I also attempt to make the moral argument for the phasing out and eventual elimination of Social Security. Here is the opening of "Government Grab of Retirement Accounts a Matter of 'Social Justice'": Uncle Sam wants your retirement money. The Obama administration has just solicited public comment on their proposal to take money from Americans' private 401(k) retirement accounts and convert it into government-backed annuities. In other words, they want to take your money now to purchase U.S. Treasury bonds, then pay you a monthly sum later after you’ve retired. Although this proposal is being initially portrayed as a voluntary choice, Americans already have the ability to purchase Treasury Bonds with their retirement money. Moreover, the Obama administration is considering making these annuities the default option. And as analyst Karl Denninger noted, "'choices' have a funny way of turning into mandates." Nor is his concern unjustified. In 2008, Professor Teresa Ghilarducci of the New School of Social Research testified before Congress proposing a similar scheme to convert private 401(k) accounts into government-run "Guaranteed Retirement Accounts" that would pay a 3% return. And in 2008, the Argentinian government attempted to nationalize private retirement funds to help cover its runaway deficit. As the U.S. Social Security system moves ever closer to bankruptcy, the billions of dollars Americans have saved in their private retirement accounts will become an increasingly tempting target for our politicians... (Read the full text.) View the full article Quote Link to comment Share on other sites More sharing options...
softwareNerd Posted February 24, 2010 Report Share Posted February 24, 2010 Today, folks like Professor Teresa Ghilarducci have enough evidence to tell them that "defined benefit" schemes do not work. They have seen the private pension schemes shut down one after the other, because companies could not keep their promises. In the current business downturn, we're seeing the same thing in local and state government pensions: they're woefully underfunded. If individuals were allowed to keep this money and invest it as they thought fit, then each person could decide what he wanted to do: some might take huge risks, others might be happier being conservative. In either case, there is no shared pain, and nobody is his brother's guarantor. This is what the good professor wants to change. From an Economics perspective, this will be a diversion of money from productive use in industrial capital to consumption via government spending. It would spell slower growth and more liabilities pushed on the shoulders of the kids who are finding it hard enough to get jobs today, because of government policy. I hope this plans never escapes the confines of the ivory tower. Quote Link to comment Share on other sites More sharing options...
John Link Posted February 24, 2010 Report Share Posted February 24, 2010 The Obama administration has just solicited public comment on their proposal to take money from Americans' private 401(k) retirement accounts and convert it into government-backed annuities. Where has the Obama administration solicited public comment on this outrageous idea? John Link Quote Link to comment Share on other sites More sharing options...
Paul Hsieh Posted February 25, 2010 Author Report Share Posted February 25, 2010 Here's the Federal request for public comment: "Request for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans [2/2/2010] " http://www.dol.gov/federalregister/HtmlDis...&AgencyId=8 You can send e-mail comments to: <[email protected]> Include "RIN 1210-AB33" in the subject line of the message Quote Link to comment Share on other sites More sharing options...
Old Toad Posted February 25, 2010 Report Share Posted February 25, 2010 (edited) in 2008, the Argentinian government attempted to nationalize private retirement funds to help cover its runaway deficit. Argentina: Major Insurance And Reinsurance Developments In 2008 Mondaq News January 15, 2009 Article by M. Machua Millett ... On October 21, 2008, Argentina's president, Cristina Fernandez de Kirchner, announced a plan to nationalize the country's 30 billion dollars in private pension funds (a number of which were managed by affiliates of international banks and insurance companies), ostensibly in a effort to protect retirees' savings during the current global economic turmoil. The announcement, however, rather than stabilizing Argentina's economy, resulted in greater uncertainty and tremendous economic and social turmoil. Argentina's stock market subsequently lost more than half of its value, the bond market plummeted and the value of the Argentine peso dropped dramatically. The Argentinean government publicly blamed the markets' performance on the ten companies in charge of the pension funds, but much of the losses were attributable to declines in the value of government bonds. After the announcement, the Buenos Aires police raided the pension system's offices and a judge prohibited the companies from trading on the Buenos Aires exchange for a week. The private pension funds then proposed a series of reforms as an alternative to nationalization. Despite significant domestic and international concerns, the Argentine government moved forward with its elimination of the country's private pension system later in the year. A nationalization bill was passed by Argentina's lower house of Congress on November 7th and by the Senate on November 20th, and President Kirchner signed the law on December 4, 2008, establishing an Argentine Integrated Pension System (SIPA) to replace the current capitalization regime as of January 1, 2009. ... http://www.atfa.org/cgi-data/news/files/1686.shtml Edited February 25, 2010 by Old Toad Quote Link to comment Share on other sites More sharing options...
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