I warned you.

Investment News:

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at The New School for Social Research in New York, contains elements that are being considered. She testified last week before Mr. Miller’s Education and Labor Committee on her proposal.

Under Ms. 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% 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% a year, adjusted for inflation.

"I want to stop the federal subsidy of 401(k)s," Ms. 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."

"I want to spend our nation’s dollar for retirement security better. Everybody would now be covered" if the plan were adopted, Ms. Ghilarducci said

My comment: Just another example of a statist that wants to use the monopoly on force the government posses to coerce you into doing what she thinks is best. Notice the terminology, I want to stop and I want to spend. I have warned everyone that this is where we are going. Every left wing loon and nut with a world bettering idea will now be given a hearing. The problem is that these legislators are all economically illiterate to begin with and have no idea what is correct policy anyway. This is exactly what has just recently happened in Argentina where Christina Kirchner just confiscated pension assets to help shore up the Argentinian debt situation. I can just see the "magic one" holding hands with Pelosi and Reid telling us how all Americans will benefit from the "investments" in education, infrastructure, and carbon sequestering technologies that all Soviet er I mean Amerikan citizens will benefit by the abolition and confiscation of private 401K money. So let me get this straight, they take my 401k assets and give them away to build public housing projects and provide school lunch for somebody elses kids and I get a phony Treasury bond that yields 3% when inflation is an acknowledged 5% and is probably closer to 12%. Now you know why you need a foreign bank account and assets outside this insane asylum known as the United States. Believe me if you think this is stupid it just gets worse just wait and yes it can happen here just like in Argentina. There is no such thing as Amerikan exceptionalism as you will soon to find out. Human nature and the desire for collectivism spans space and time.

John Polomny
The Real Deal