Much to their disappointment, President Obama and Democrats are not going to convince Republicans to agree to a tax increase on the upper middle class. Soon after the 2014 election, whether Democrats win the House or not, they will be looking for ways to “increase revenue.” There are several trillion dollars just laying around in 401(k)s and IRAs. One estimate I saw was more than $10 trillion.
A while back, Bloomberg Businessweek reported: “The Treasury and Labor departments are asking for public comment on the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams.” The idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.
In other words, the government will allow you the “opportunity” to give Washington your savings; in return, the government will give you unmarketable T-bills or other unreliable promises to pay some rate of return. The program likely will be voluntary to begin with, but that makes no sense – you can buy T-bills in your retirement account any time you want. So the only possible way it will work is to make the exchange mandatory. The government steals your savings in exchange for an IOU.
I can hear Obama now: “While the stock market is unstable and millions of people have lost their life savings, these government bonds are safe and secure and will draw a high rate of interest.” Or, “The monthly payments are guaranteed and are transferable to one’s spouse.”
Stealing our retirement funds, along with repeal of the 22nd Amendment, will be the top two Democratic programs after the 2014 election.