People who trust Uncle Sam with their life savings are in for a series of shocks as the financial house of cards upon which he sits falls apart one program at a time. A lobby for seniors in Washington has started honking that President Obama and the federal legislature want to use tax-deferred investments such as 401(k)s and IRAs to fill in growing budget gaps.
The National Seniors Council, which is pushing one of those online petitions, sees a “dangerous first step” in a Senate bill ‡ that it says will be refiled in the congressional session starting in January. The bill limits the rights of account holders to borrow against the funds, an ominous precursor to other limits. The group says the U.S. wants to take over all retirement schemes and that labor unions and leftwing groups have formed a pressure group, Retirement USA, to lobby for U.S. control of the retirement system.
Do you believe our betters care for you, or for themselves?
“Ownership has two parts,” says Franklin Sanders of The Moneychanger Newsletter in a recent market commentary. “Title & control. In your IRA-government partnership, you have title (a legal claim) while the yankee government has control (possession). It’s like lunchtime in California when you own title to a Big Mac, but it’s stored in New Jersey. What will you do when the yankee government changes the rules & says the only thing your IRA can buy is U.S. gummit bonds? They got you, and your money. Me, if I own a Big Mac, I’m sure gonna take delivery, at the window, soon as I put my money down.”
A sorry history in national economy
In 2008 Argentina “nationalized” F$24 billion in private pensions in a system that it had earlier created to get the government at least partly out of that economic sector and give workers some control of their assets. In seizing the assets, the ruling party described it as a “rescue” that affected about 3.6 million people in a bank-run system that was paying about half a million retirees.
Americans first began hearing of the possible takeover of their private savings accounts in 2010, at which time it was reported that F$7.835 trillion were socked away in government-favored accounts such as the 401(k). “That is certainly too large a sum to be ignored by the big spending social engineers in Washington,” noted American Thinker magazine at the time. “Bureaucrats and politicians have been hard at work formulating a social justice excuse to legislate an historic seizure of private assets. This would not be the first time the statists extorted wealth from U.S. citizens on a massive scale.”
Uncle seized private savings of Americans in 1933 by banning the ownership of gold, against which Rep. Louis T. McFadden protested in a report May 23, 1933:
By his action in closing the banks of the United States, [President Franklin D.] Roosevelt seized the gold value of forty billions or more of bank deposits in the United States banks. Those deposits were deposits of gold values. By his action he has rendered them payable to the depositors in paper only, if payable at all, and the paper money he proposes to pay out to bank depositors and to the people generally in lieu of their hard earned gold values in itself, and being based on nothing into which the people can convert it the said paper money is of negligible value altogether.
Your alternative: Local economy
The financial pressure upon the national government is immense as its actual debt is F$212 trillion, according to one assessment. This amount is unpayable, and exists in a dreamy state for which the authorities in the federal capital fail to account.
The argument for local economy is one of distrust of national economy and confidence in local economy. Local economy imagines that more people will want to invest locally, to have their revenue streams in retirement years coming from local profit centers.
Indications from Michael Shuman, whom we met earlier in a video and who has written a book I’m carefully reading, are that local economy is going to be the direction of investment in the future.
If you liquidate your 401(k), you pay a 10 percent penalty. But you will have the money in one hand, and your Big Mac in the other. You will able to consider your alternatives. We’ve already suggested investing in yourself. That’s one step I took. I liquidated my 401(k) and I am investing in myself and my wholesome ideas by developing this website — and you are coming along for the ride. Thank you, friend of Nooganomics.com. ‡‡
Economic shocks, confiscations or rumors thereof and market plunges will make people more open to local economy ideas and possibilities. You’ve been sold a lie by the investment industry about the possibilities of returns on your conventional investments. I hope to explain how another day.
‡ The Savings Enhancement by Alleviating Leakage in 401(k) Savings Act, sponsored by a liberal senator, Herb Kohl.
‡‡ I would really appreciate your going out of your way to plug my website among your friends and acquaintances. You can link to me by connecting with me at Facebook.com/noongaomics, and forward my updates among your friends. I would be very appreciative of your help.