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Democrats to Consider Nationalizing Personal 401k Plans

October 24, 2008

 You may not care about William Ayers, Jeremiah Wright, and Tony Rezko. You may not care about Obama palling around with terrorists and calling a racist, hate filled, American hating reverend his spiritual adviser. You may not care about Obama not wearing a flag lapel pin (and by the way, when did McCain stop wearing his? He didn’t wear one during any of the debates, while Obama did.) You may not care that Obama is a socialist and you may not care that the economy has been socialized and you may also not care that the government has no business socializing health care.

 But you damn well should care about this. Congress is considering taking the money away from you that you put in your 401k plan voluntarily and nationalizing it.

 The market turmoil has some politicians on Capitol Hill eyeing the end of the 401(k) as we know it

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

 You would be required to contribute 5% of your pay and it would go to the Social Security Administration. This account would gain 3% interest as opposed to the gains that you would receive when the market turns around. This would replace your 401k account. In other words the government is going to take away the money that you voluntarily decided to invest in the stock market for your retirement.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

 This amount to a tax increase on everyone who has a 401k plan. Most Americans would lose this tax break. Losing a tax break is the same as a tax increase. It is a semantics game Democrats are playing.

her plan would amount to a tax increase on workers making more than $75,000–considerably less than the $250,000 Barack Obama has said would be his tax-hike cutoff.

 And it gets even better.

workers would be able to pass on only half of their account balances to their heirs; presumably the government would seize the remaining half.

 If you die, the government will keep half of the money that you voluntarily decided to put towards your retirement. Your family will only get half.

 You wanted change, you are going to get it.

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18 Comments leave one →
  1. endithinks permalink
    October 25, 2008 1:12 pm

    Ugh! Forget this! This is what happens when government gets its hands on the “nationalization” button. This is why I was so opposed to the Bailout in the first place. It is like giving water to a man dying of thirst. They will drink themselves to the point of sickness.

    I’m writing to my congressman right now. They need to get off this nationalization kick! Of course let’s not only put the blame on Democrats. After all it was the President and his appointed staff who started tossing around buyouts, trade swaps, bailouts and nationalization in the first place. Where the hell are the fiscal conservatives?

    (I am a bit of an enigma because I am a fiscal conservative in regards to government spending except in the cases of health care, and education. I cannot stand that both the right and the left are falling in love with the throwing-money at-the-problem-itis.)

    I’ve written plenty of blogs about this….Ugh.

  2. endithinks permalink
    October 25, 2008 1:23 pm

    here is the link to the actual testimony that Teresa Ghilarducci proposed. She is a professor with the Scwharz Center Policy for Economic Analysis.

    So the Democrats just heard this testimony on the 7th they are not necessarily considering it.

    http://www.house.gov/ed_workforce/testimony/2008-10-07-TeresaGhilarducci.pdf

  3. October 25, 2008 4:16 pm

    Is this seriously being considered as policy? From the article it reads to me that it is just somebody’s brain fart.

  4. October 25, 2008 9:19 pm

    From what I heard on two local Boston radio talk shows this plan is going to a senate committee for debate.

  5. MWH permalink
    November 1, 2008 10:21 am

    I heard about this a few weeks ago and was in disbelief. Everyone who has made sacrifices and save will get screwed yet again. I would withdraw all of my current contributions, pay the taxes and fees, and put it towards my mortgage… I bet a lot of people would do this as opposed to letting the idiots on Capital Hill get a hold of it… Heck I would rather take it to Vegas and let it ride on one spin of the wheel that or spend it all in my local gun shop.

  6. November 1, 2008 5:41 pm

    If this ever nears becoming law I will withdraw all that I have from my 401k plan and pay the fines just so that I can keep what is rightfully mine.

  7. James Portwood permalink
    November 1, 2008 9:15 pm

    I think this plan sucks .What else will they think of.I know if I get wind of this plan I will pull out all of my money from my 401k . Its my money for my retirement that Isave not the governments. I think its time for all of us to try and figure out some way to screw the government after all thats what they are doing to us.

    ticked off in arkansas.

  8. November 5, 2008 11:02 am

    What is wrong with Americans? Have we lost our ability to critically think? Social Security is a failed policy, and now we have just given the farm away to the party who comes up with ideas like this? Do they understand one of the reasons our markets have maintained their stregnth is because of the employer 401K programs? Of course they do, but they just want to get their hands on more of our money.

  9. Patrick permalink
    November 5, 2008 12:09 pm

    BOHICA! For those not savvy to this acronym:
    Bend Over Here It Comes Again!

  10. November 5, 2008 5:45 pm

    So won’t this screw our economy even further? I mean, there are those who are scared of the economy that are probably taking out their 401k right now. If a plan like this would turn people off to a 401k plan and decide to take their money out, won’t that send the economy spiraling even further?

  11. Frustrated permalink
    November 5, 2008 7:51 pm

    I don’t think that the government will attempt this until they take our guns. They will take take our guns or ammo. Then they’ll go after our 401k’s.

  12. November 5, 2008 8:17 pm

    Don’t worry, the guns are going also.

  13. endithinks permalink
    November 5, 2008 11:09 pm

    The guns are going nowhere. They won’t be taken away or anything. Wow people are so afraid. I say wait and see. We need to give time and watch President Elect Obama’s actions before we start jumping to conclusions.

  14. Jon permalink
    November 6, 2008 3:23 pm

    Rest assured my gun is going nowhere. I’m not afraid of them at all endthinks, they won’t be getting their hands on my weapons. The framers apparently thought they right of the people to keep and bear arms pretty important. It’s the 2nd amendment to the Bill of rights and if I had to hazard a guess I’d say those rights were placed in order of importance to them.
    Don’t tread on me!

  15. November 6, 2008 6:15 pm

    During the Viet Nam War, one of my duties was to brief in-coming personnel on the Pacification Program. One of the main briefing points was that the Government of South Viet Nam was providing arms to its people so they could defend themselves. Our talking point was that a good government could do that and still feel safe. A government that took arms away from its citizens was afraid that it was making very unpopular decisions and didn’t trust its citizenry. We also mentioned that all Fascists governments took the guns away from the people.

    But then, we will probably be able to keep our registered guns; they will be safe down at the local police armory where we can get them after filling out the appropriate forms.

    Get a copy of the Constitution, read it, and watch the moves the government makes. Make sure your representatives know every time their actions make you nervous. Organize your friends to write letters to the editor. Participate in protests when appropriate.

    Part of the rebirth of conservatism in this country is to be active and vocal in your beliefs.

  16. Patrick permalink
    November 12, 2008 5:18 pm

    This is crazy… That’s the kind of crap that makes me sick. That’s why I refuse to invest in a Roth IRA. The government will eventually find a way to get their greedy hands on it to tax or confiscate ity. Take the tax deductions now and invest in Traditional IRA’s. I can’t believe people are allowing 401k socialization to even be considered.

  17. Antonio Fernandez permalink
    October 25, 2010 7:15 pm

    I for one, am getting good and tired of what I read, all this coments about what this party is going to do or what that one is going to do. it makes me sick, and this pointing fingetrs at one another like little children, we are in this mess because of our own stupidity, I’ve always maintained that to much education will fall a nation, our representatives all do as they please and we stand by and suck our fingers,we write our senate or congress and they very seldom reply,tobusy you say? no one has questions unless they are
    dissatisfied with whats going on, yet each year we vote the good with the bad, once a person gets elected into office he is sure to keep his job for life when will we the people come down to using Gods given senses,check out
    the candidates back ground
    Someone wrote that McCann did not wear an American Flag Pin when
    campaigning for president, why should he, he spent some years in HELL for his work trying to protect this countrys rights in VN, did obama do that? he sure as hell did not, ever watch him when the national anthem is played? does it look like to you that he is salting?. no he is scratching some
    where else he is a disgrace to my COUNTRY LAND THAT I LOVE AND SERVED IN THREE WARS so please quit telling the people how good each party is and do what’s right

    • October 25, 2010 9:25 pm

      Thank you for your service!

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