By Jane Jamison
Cry for us, too, Argentina?
The Obama administration is making a “stealth” move to nationalize private retirement accounts, just as Argentina did in late 2008, to resolve national debt.
( Video news report of nationalization of pensions in Argentina )
Word got out through a non-descript announcement August 26 of a Labor Department committee hearing on September 14 and 15:
Today the U. S. Department of Labor’s Employee Benefits Security Administration (EBSA) released the agenda for the upcoming joint hearing with the Department of the Treasury on lifetime income options for retirement plans. Accompanying the agenda are copies of the witnesses’ requests to testify and testimony outlines.
“Lifetime income options” is a rather cynical euphemism, according to coin dealer/columnist, Patrick Heller, who alerted his readers to the upcoming hearing last week.
“I don’t like speaking in tabloid-style terms, but the unstated agenda of these hearings, as I understand it, is to push for the US government to eventually nationalize (confiscate) all assets in private Individual Retirement Accounts (IRAs) and 401K plans!
The US government is desperate to get its hands on private assets to help cover soaring budget deficits and debts, and this is simply the largest and easiest piggy bank that could be seized. The Investment Company Institute estimates that at the end of 2008 that there were $3.613 trillion of assets in IRAs and $2.350 trillion of assets in 401K plans.”
Ambrose Evans-Pritchard of the U.K. Telegraph sounded the warning gong in October, 2008, in an article titled, “Who’s Next?” just after the socialist Argentine president Christina Kirchner made good on two years of threats and repositionings, and nationalized a large pool of private pensions.
“My fear is that governments in the US, Britain, and Europe will display similar reflexes. Indeed, they have already done so. The forced-feeding of banks with fresh capital – whether they want it or not – and the seizure of the Fannie/Freddie mortgage giants before they were in fact in trouble (in order to prevent a Chinese buying strike of US bonds and prevent a spike in US mortgage rates), shows that private property can be co-opted – or eliminated – with little due process if that is required to serve the collective welfare. This is a slippery slope.”
Of course, no one in the Obama administration is going to label this a “move to nationalize IRAs and 401Ks.” That would be too traumatizing, too much, too soon, and would create immediate blowback. Instead, we will be “softened up” with talk about Value-Added Tax (VAT) of 20% or more, and demonizing of predatory investment brokers who are “victimizing” pensioners. The dreaded “deficit commission” report looms in December.
Just as Argentina’s nationalization of private pensions was at least two years in coming, we have had our advance warnings. Congressman George Miller (D-Calif.) held hearings two years ago, just before President Obama was elected, to discuss removing the tax-exempt status of retirement contributions, and mandatory 5% contributions by employers ( in addition to Social Security and Medicare) for employee retirement accounts.
There was very little coverage of these hearings, timed as they were two weeks before the election. Rush Limbaugh and some bloggers covered the issue. Wall Street Journal wrote two weeks after the election about it:
“At a hearing last month, Mr. Miller put the 401(k) system into play. Under the current system, employers match employee contributions that aren’t taxed until redeemed, an indirect subsidy worth some $80 billion today. “We have to start to think about in Congress . . . 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,” Mr. Miller said. “For a taxpayer investment of this size, we must ensure that the structure of 401(k)s adequately protects the nest eggs of participating workers.”
The administration has been trotting around “experts” such as Dr. Teresa Ghilarducci of the Schwartz Economic Policy Analysis Center to get the message out about “spreading the wealth,” and “protecting investors.” Her message has prompted some writers, such US NEWS Money’s James Pethokoukis to call her “the most dangerous woman in America.” She told conservative talk show host Mark Levin in 2008 that taxpayers should “trust” that her proposed government retirement accounts would be just as “safe” as Social Security is now.
Ghilarducci is funded by the Rockefeller foundation.
“Her plan would end the tax breaks for 401(k)s; she proposes instead to give all workers an annual $600 inflation-adjusted tax credit for retirement and force them to invest 5% of their pay into a government-run retirement account managed by the Social Security Administration. She called the 401(k) “a failed experiment.”
As banking reform was “sold” to us as “consumer protection,” we will be told we must be protected from our own stupid decisions or bad choices (or not) with more government “oversight” and “market protections” of our retirement monies.
Another job-killing, revenue-raising (or busting) bill goes hand-in-glove with this:
S 3760, introduced August 5 by Jeff Bingaman (D-N.M.) and John Kerry (D-Mass.) would require that employers of workers currently not covered by any retirement program pay 3% of compensation into mandatory, automatic IRA accounts. That would also have the effect of increasing the assets that the US government could then seize.
The only “consolation,” if there is any, is that the timing of this hearing on the pre-emptive pension “grab” comes less than two months before the November election. If the voters know the facts, surely this will send them in droves to vote Democrats out of Congress and maybe….stave off this attack on private American wealth.
That is the question: Will the truth get out to the public in time to make a difference?
Rep. George Miller (D-Calif.) is from the east bay of San Francisco and is up for re-election against Republican Rick Tubbs
Cristina Kirchner, president of Argentina
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