United States of Argentina: Is Uncle Sam coming after your 401K retirement savings?
Hat tip to Zack Tedder who brought this issue to me.
Biden and the Democrats could be after your retirmenet savings. In an open letter in May to Timothy Geithner and Hilda Solis, of the Treasury and Labor department, the GOP warned of a Democratic plan to steal your retirement money and give you IOUs.
It sounds like something that you think could never happen, but other goverments already have. Argentina did it in 2008. They took all that money and used it to shore up their governmen't and in return, the Argintine pensioners get an IOU, via WSJ:
That the state could seize retirement savings no doubt seems outrageous to Americans. But it is a predictable development in a country where government intervention in the financial system is the norm. With Washington now expanding its role as guarantor in American banking, that's something to think about.The open letter was from the GOP Ledership and was signed by House Republican Leader John Boehner (R-OH), Rep. John Kline (R-MN), Rep. Dave Camp (R-MI), Rep. Sam Johnson (R-TX), Rep. Dean Heller (R-NV), Rep. Brett Guthrie (R-KY), Rep. Michele Bachmann (R-MN), Rep. Pat Tiberi (R-OH), Rep. Bob Latta (R-OH), Rep. Erik Paulsen (R-MN), Rep. Lynn Jenkins (R-KS), Rep. Ed Royce (R-CA) and Rep. Buck McKeon (R-CA). From the actual letter:
In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts, (GRAs)” which would provide for protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” – presumably at taxpayer expense. In the Report, the Vice President recommended “further study of these issues.”
The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary – again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen. This despite data showing that 90 percent of households have a favorable opinion of the existing 401(k)/IRA system.
In light of these facts, we write today to express our opposition in the strongest terms to any effort to “nationalize” the private 401(k) system, or any proposal that would dismantle or disfavor the private 401(k) system in favor of a government-run retirement security regime.
Similarly, and more recently, the Departments of Labor and Treasury have jointly issued a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options.” While we appreciate the Departments’ seeking guidance and information from all parties and stakeholders in advance of regulatory activity, we strongly urge that the Departments not proceed with any regulation in this area before they have carefully and thoroughly considered all of the information received.