Wednesday, October 13, 2010

Got 401s?

Union pension plans in America are falling apart. Congress has a plan to fix that.

Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more "fairly" distribute taxpayer-funded pensions to everyone.

Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee heard from hand-picked witnesses advocating the infamous "Guaranteed Retirement Account" (GRA) authored by Theresa Guilarducci.

In a nutshell, under the GRA system government would seize private 401(k) accounts, setting up an additional 5% mandatory payroll tax to dole out a "fair" pension to everyone using that confiscated money coupled with the mandated contributions. This would, of course, be a sister government ponzi scheme working in tandem with Social Security, the primary purpose being to give big government politicians additional taxpayer funds to raid to pay for their out-of-control spending.
The plan has been in the works for a while.
In February, the White House released its “Annual Report on the Middle Class” containing new regulations favored by Big Labor including a bailout of critically underfunded union pension plans through “retirement security” options.

The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement -- which lets them off the hook for their collapsing retirement scheme. And, of course, the Obama administration is eager to accommodate their buddies.

Vice President Joe Biden floated the idea, called “Guaranteed Retirement Accounts” (GRAs), in the February “Middle Class” report.
You have to love the names they give these abominations. More correctly it would be called Guaranteed Retirement Accounts for Unions. If you are an ordinary citizen all Guarantees are off.

Here is a report from 2008 on the topic which names some more names.
GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants.

In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.”
What she means by "spreading the wealth" is straight up theft by the government.

Well 2008 was a good year for warnings about this stuff. Joe "The Plumber" Wurzelbacher tried to warn the 53% among us who were about to do something foolish.
Wurzelbacher said he planned to become the owner of a small plumbing business that will take in more than the $250,000 amount at which Obama plans to begin raising tax rates.

"Your new tax plan is going to tax me more, isn't it?" the blue-collar worker asked.

After Obama responded that it would, Wurzelbacher continued: "I've worked hard . . . I work 10 to 12 hours a day and I'm buying this company and I'm going to continue working that way. I'm getting taxed more and more while fulfilling the American Dream."

"It's not that I want to punish your success," Obama told him. "I want to make sure that everybody who is behind you, that they've got a chance for success, too.

Then, Obama explained his trickle-up theory of economics.

"My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. I think when you spread the wealth around, it's good for everybody."
Well that is history now. You know what this administration is up to. No excuses this time. The only recourse short of appeal to the Gods of War is to vote the Democrats out. Every single last one of them. No exceptions.

H/T Vox Populi and I think I got the Vox link from a comment at Riehl World View. But I can't find which post right now.

Cross Posted at Classical Values


Neil said...

Heh. For the last 15 years, I've de-emphasized my 401(k) in my financial planning (to put it mildly). On the couple of occasions my family asked why, I told them that when the crisis hits 'round about 2010, the government is likely to requisition tax-advantaged retirement accounts "for the good of the people".

They laughed.

Why is it that every time I say something really smart, people laugh?

M. Simon said...


It Can't Happen Here