Posted by: arnegrim | January 13, 2009

How to kill America…

Now… that may seem pretty harsh, but I think that if the latest plan of the Democrats goes through this is exactly what it will do.  Apparently with the economy the way it is, the latest imaginative way to protect the ‘have-nots’ is by socializing their retirement accounts.  ‘Guaranteed Retirement Account’… that’s the death knell for our economy and probably our country as a major world power.  The basic idea is this… Your 401K funds are ‘appropriated’ by the government to be placed in a government run account which will guarantee a retirement income of an estimated 25% of annual salary.  (Social Security supposedly will provide an additional 45%).  Participation will be mandatory… 401K’s will be done away with.  The government generously plans to help the public contribute, and will oversee the plan.

Call me crazy, but this sounds an awful lot like Social Security… the wonderful program that is estimated to start paying out more than it takes in… around 2017.  So, not only is another ponzi scheme being discussed, personally controlled alternatives would be dissolved.

What does this mean for our economy?  Well, the stock market would suddenly see an enormous sell-off as 401Ks are forced to contribute all funds to the government run program… which will result in a huge downturn of any and all stock prices.  Of course, this will exacerbate the economic problems unless the extraordinary occurs (I’ll get to this in a moment).  Suddenly businesses will find they are cash-strapped without investors with no chance to recover unless they are one of the ‘safe investments’ selected by the government.  Various agencies, which rely on stock-market investing for funding, would find themselves on the short end of a very pointed stick as the stock market nose-dives.

The extraordinary?  Outside investors.  Unless the multi-millionaires of the United States wish to carry the entire stock market burden on their own fortunes are willing to do so, the only way the stock market will make any sort of recovery will be by foreign investors.  In today’s market, that would not be a bad thing, but with the stock market in the tank, foreign investors will find themselves with a controlling interest in most, if not all, stocks… which is fine if you have no problem with the disappearance of the US as a world power.

http://www.usnews.com/blogs/capital-commerce/2008/10/23/would-obama-dems-kill-401k-plans.html

Advertisements

Responses

  1. I’m not sure it’s a deathblow, but it certainly wouldn’t be a great thing to happen…one more step along the path away from self-ownership.

    It’s sad, really…the shape of the economy is just the excuse needed to bring about unnecessary and usually damaging change…history may be repeating itself.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: