O's 401k disaster ?

Discussion in 'Current Events' started by chev, Nov 9, 2008.

  1. chev

    chev Nightcrawler

    I didn't see this posted anywhere else. Is anyone else aware of this proposal to stab us in the back?

    Obama & Democrats Move To Seize 401(k) Plans!

    US News & World Report published a story yesterday morning in which they uncovered little discussed legislation that would effectively eliminate 401(k) plans and create a second quasi-Social Security system in which the government would take control of the retirement plan savings of millions of Americans.

    According to US News & World Report along with Congressional Records, a House subcommittee is considering the advancement of legislation that would ELIMINATE 401(k) plans and create as an alternative a "Guaranteed Retirement Account" for every worker in the United States. Under the plan, Americans' existing 401(k) accounts would be transferred into the GRA and would grow at an average yield of around 3%. The subsequent loss of preferential tax treatment among US employers who offer the qualified plans would be used to make a $600 per person government contribution into the plans. In addition, the GRA's would require a mandatory 5% contribution (tax) by all US workers.

    Democratic Congressman Jim McDermott (D-WA) who supports the plan was quoted as saying, "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."

    This legislation being considered by Democrats is perhaps the most dangerous proposal put forth by the Democrats to date. The system would essentially create a second Social Security System in which bureaucrats would control the funding, investment and use of the money. The government would control all provisions of the plan, and individual rights for determination of risk reward would be stripped.

    Like the current Social Security System, which is failing and is expected to collapse unless massive reforms are instituted, the 401(k) replacement program would give no assurance of the protection of funds. The government, just as with Social Security, could essentially strip the plan of assets and use those assets within the general fund. Where is Al Gore and his lock box?

    More importantly, consider the immediate implications of such a plan? There is currently $4.5 Trillion dollars invested within 401(k) plans in the United States, the transfer of this wealth to the government would destroy not only the financial markets but would also cause the collapse of an entire industry of financial and accounting companies that have been built upon the Retirement Savings Industry. This would be the largest loss of wealth and seizure of public assets in world history.

    In addition, consider the long term ramifications of such a system. A 3% savings rate will essentially double the account value every 24 years. That would mean that if you were 41 years old today and had $20,000 in your 401 (k) plan, that money would now be worth $40,000 at age 65 under the GRA. This GRA plan would depress savings rate to a point that multiple generations of Americans would be unable to outpace inflation within their savings and suffer inadequate incomes upon retirement. The resulting "Welfare" generation would only spurn more government taxes in order to provide for their retirement. The resulting vicious cycle of impoverishment and taxation would never end.

    Is this the change that we are looking for?

    The seizure of $4.5 trillion dollars by the government. A promise of low returns, no control over assets, and no guarantee that the funds would not be replaced by a promissory note.

    Is this the change that you want?

    The creation of a welfare state in which the government is responsible for all aspects of our lives as if we were a society of 4 year olds.

    Is this change for the better?

    A government that will fail to protect the current Social Security & Medicare System but will create new Bureaucratic programs based upon those failing systems.

    Is It Really Time To Change America?

    Are we now in the age in which we abandon 232 years of government built upon State's Rights, Individual Rights, Checks & Balances, and an American Exceptionalism based upon unhindered opportunity and a government ruled by the people, not established to rule the people.
  2. scratch

    scratch Least Best Moderator Staff Member

    I had read this too. Funny how discussions like these are glossed over by the mainstream media during election time. When the economy recovers, do we want 12-15% returns on our investments or 3%? A no brainer there. The government has never ran any program successfully, why people want politicians in charge of anything confounds me. I guess they don't understand what the word "freedom" really means, too many people are unable to think for themselves.
  3. Baba gounj

    Baba gounj pensioner

    That is today's reality, as shown in the recent election. Many had to be told how & for whom to vote for. That woman who claimed that O would pay for her mortgage & gasoline is the new poster child.
  4. chev

    chev Nightcrawler

    I know it is sad, but I had to laugh at that stupid woman. So many ignorant fools that voted for him for the wrong reasons.
  5. tieguy

    tieguy Banned

    I saw a story that Pelosi suggested to Obama that he rule from the middle. Obama and pelosi would need three days and five maps to find the middle.:happy-very:
  6. Monkey Butt

    Monkey Butt Obscured by Mirrors Staff Member

    While I don't care for Pelosi's politics, I never though she was stupid!
  7. mikestrek

    mikestrek New Member

    Trust me guys and look around you. My 401-k has now lost over $45,000.00 and this was under the Republican George W Bush.
    I'm looking forward to Jan 20. Things can only get better. I'm tired of losing money.
  8. Baba gounj

    Baba gounj pensioner

    Are you absolutely sure about that ?

    According to most sources the markets have yet to bottom out.
  9. tieguy

    tieguy Banned

    you didn't move your money into the stable fund or bonds?

    Typical liberal. You don't educate yourself on how to manage your 401 K and then blame the president for your ignorance.
  10. Monkey Butt

    Monkey Butt Obscured by Mirrors Staff Member

    I am so glad I have this to read today.
    I was hoping my grandson was coming over but alas, he is not.
    This thread reminds of our times together -
    Hobie: You're a goober boy
    Grandson: No I'm not. Your a poopie head
    Hobie: Don't be eating your boogers
    Grandson: I didn't eat no booger. Mama, Hobie is telling lies! Hobie, your breath stinks.
    Hobie: Good, I'm going to breathe on you.
    Grandson: Nooooo! You're a big fat meany.
    Hobie: You cry like a girl.
    Grandson: No I don't, I'm gonna beat up up.
    Hobie: I don't think so, I think girls can beat you up.
    Cartman: I wouldn't let any girl kick my butt. I'd say, "Get your beyotch axe back in that kitchen and make me some pot pie."
    Grandson: Who was that Hobie.
    Hobie: That was Cartman from South Park
    Grandson: He's fat!
    Cartman: I'm not fat, I'm big-boned
    Hobie: Don't mess with Cartman or you'll wind up like Kenny
    Grandson: Whose Kenny?
    Hobie: He’s the kid on South Park that mumbles like you
    Grandson: I don’t mumble anymore, I’m getting real good at talking! You got hairs in your nose…Yuk!

    And so on and so on.
  11. chev

    chev Nightcrawler

    :laughing::dead: I moved mine as soon as the market started taking a dive. Glad I did.:happy-very: Sure, I took a hit, but it was nothing compared to that. I monitor my investments. How did you let yourself take a $45k hit. Fall asleep at the wheel?:sleeping2:
    Damn. You blame Bush for the economy and you manage money like that!
  12. over9five

    over9five Moderator Staff Member

    How was your 401k doing while the Republicans had control of Congress? Mine was doing pretty incredible!

    It was only after the Democrats got control everyones 401k TANKED.

    I was also diligent enough to move funds before I lost much.
  13. diesel96

    diesel96 New Member

    .....Why are you running with this story That Obama and the Dem's are coming to sieze our 401k plans..... It was a hearing. The purpose of hearings is to “hear” new ideas. Testimony is not legislation. So far, that’s as far as this idea has gotten. Careless fearmongering playing on the fearful and weakminded Rep base never ceases to amaze me. Maybe the media, Scratch, is glossing over this story for what it is. Someone's idea

    Here’s where we all take a deep breath. There is no proposal in Congress to take away your 401(k) savings account. In any case, the stock market has already done a pretty good job of wiping out several trillion dollars worth of 401(k) savings without any help from Congress.
    And that, in fact, is precisely what prompted a few legislatures to convene a hearing to review a number of proposals to improve on the 401(k) plans that have become the mainstay of most Americans’ retirement income.
  14. av8torntn

    av8torntn Well-Known Member

    I'll take a stab at this. I believe it is because Obama really has not been a leader. He is more of a follower. His time in the Senate was primarily just a rubber stamp for the Democratic leadership.

    He did of course make a proposal to allow people to make a penalty free limited withdrawal from their 401k. I think this would be a bad move but I did hear a couple of women talking at a restaurant last night about how great it would be to be able to do this. Just goes to show no matter what some people want to buy high and sell low which is sort of a good thing for the rest of us.

    Just imagine if this proposal for government sponsored 401k's goes through we can just vote ourselves a higher return every four years. :happy-very:
  15. mikestrek

    mikestrek New Member

    diesel, Relax, These guys are still just LOATHING about the LANDSLIDE loss. All I hear out of them now is Fear and Loathing. President Obama will do a fine job. :happy-very:
  16. tieguy

    tieguy Banned

    The idea government would consider taking our self managed plans for a government controlled plan is reason to be concerned.
  17. tieguy

    tieguy Banned

    I see you dodged the other issue. Were you really stupid enough to lose 45 k in your 401 k plan or were you making that one up?
  18. over9five

    over9five Moderator Staff Member

    This from the guy who said:

    " I take it you'd like to be first in line to take out your gun and shoot our new president."
  19. chev

    chev Nightcrawler

    Here is where you read carefully......
    It says ....According to US News & World Report along with Congressional Records, a House subcommittee is considering .......
    See that word CONSIDERING? That would be your clue that this is not actually in proposal yet. The word appears in the article several times.
    The rest of the story goes on to tell us what the result of such a plan would be. This is not fear mongering. Fear mongering would be a story that said this was definitely going to happen.
    Try reading the entire article before you start accusing me of fear mongering.

    If this proposal helped to promote proposals to improve 401k plans, then great. I'm all for that. As long as the govt keeps their grubby hands off of MY money, I will be happy.
  20. Jones

    Jones fILE A GRIEVE! Staff Member

    The US News & World reports blog entry (it's not even a news story) that the blog you linked to is referring to doesn't even say that much. All it says is that Teresa Ghilarducci testified before a subcommittee about her ideas. woohoo.