Get in Line
Thursday, October 23, 2008 at 07:34PM 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-California, and Rep. Jim McDermott, D-Washington, 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.
Obliged to contribute? Isn't that like ... Social Security? Check out some of the details of this half-baked asinine plan:
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 Miller's Education and Labor Committee on her proposal. ...
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.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
;)
Oh boy, oh goodie. A whole $600 a year. A whopping 3% interest per year. Boy I could certainly retire safely and comfortably on that, if I wait until I'm 90.
If Obama gets into the Oval Office there will be no stopping this kind of bullsh!t. With a Democratically controlled Congress at his beck and call, we can see things like this being railroaded through with no trouble at all. They will create the largest government this country has ever seen and turn us into a nanny-state that rivals anything anywhere in history.
As observed by Ed Morrissey at Hot Air:
The Democrats want to end the private retirement system that has allowed Americans to become a vast investor class and put them back in thrall of the federal government. This is nothing more than a second welfare system that would sit on top of the crumbling Social Security entitlement. It would leave the American working and middle classes with no retirement option other than a government handout.
Take a good look at the image I've posted here. It may become more familiar than any of us wants in the next 4 years.
Reader Comments (1)
I'm a firm believer that we need to revamp the Social Security system, and let people under a certain age have more control over there money. This plan isn't it though.
I'm a little torn on the 401K thing. I don't thingk they should change the tax benefit we get now, but I'd maybe be willing to give that up if they'd let us take it out at retirement tax free, a la Roth IRA.
Complex issue that is getting harder and harder to fix the longer we wait. We definitiely have to look out for ourselves and not rely on the Government.