Democrats to kill 401(k)s for … privatized Social Security?
posted at 9:30 am on October 23, 2008 by Ed Morrissey
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In 2005, George Bush proposed privatizing a portion of Social Security contributions to allow workers to control their own funds and hopefully outperform the woefully inadequate entitlement system. The partial privatization would eventually have helped postpone or eliminate the insolvency of Social Security, but Democrats screeched that the GOP wanted to steal benefits from Grandma and effectively killed the debate. To this day, they accuse Republican candidates of supporting Bush’s partial privatization plan as though it were the equivalent of Teapot Dome.
So why are Democrats now looking to partially nationalize existing 401(k) plans into the exact same kind of private/public pension system?
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
Hmm …. “a system of guaranteed retirement accounts to which all workers would be obliged to contribute.” That sounds very, very familiar, doesn’t it? Don’t we already do this with Social Security?
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal. …
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year. In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution. Instead, Uncle Sam would give you your “matching” funds — up to a whopping $600 per year! Whoopee!
As Michelle Obama says, you could buy a pair of earrings every year … except, of course, you can’t. It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us. It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security. And what do they do with the money? They give you government bonds as your only investment option.
Maybe you’ll be lucky, and they’ll have Franklin Raines running the agency issuing those bonds.
The Democrats want to end the private retirement system that has allowed Americans to become a vast investor class and put them back in thrall of the federal government. This is nothing more than a second welfare system that would sit on top of the crumbling Social Security entitlement. It would leave the American working and middle classes with no retirement option other than a government handout.
If the Democrats control both Congress and the White House, kiss your 401(k)s goodbye, and get into the bread lines first before the crowd arrives. (via Q&O)
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Yeah, I’m not a big finance guy, but Limbaugh covered that in detail on his show. And then rightly asked if McCain had offered that plan, wouldn’t the media be on him like a big kid on a cupcake.
hawkdriver on October 23, 2008 at 10:38 AM
[MarkTheGreat on October 23, 2008 at 10:13 AM]
Before the government will default on the bonds, they’ll print lots more money, inflation will go sky high, the debt will become smaller in relative terms. They might have to tweak the COLA’s to eliminate a vicious circle effect.
Of course, everything else economic will eventually collapse but the politicians will be able to point to the fact that their numbers are okay.
Believe me, it won’t happen … until the pols retire to take up lobbying.
Dusty on October 23, 2008 at 10:38 AM
And all the liberal teachers out there with 403(b) plans, I can’t wait to hear the screaming over that.
sheriff246 on October 23, 2008 at 10:39 AM
hawkdriver on October 23, 2008 at 10:27 AM
Good thing I didn’t put my makeup on now. Tears are flowing. God Bless you. Can’t tell you grateful I am, to have a soldier like you. My nephew was in Iraq. He did two tours. He loved it there. We don’t see the good that is going on there. Just the bad things that is a part of war. President Bush is a good man. I was for the war, regardless of WMD’S. Sadaam, had taunted us long enough. Something had to be done.
As for the civil war. Life has been good for me. I am ready to stand up. Have been for years. We need to clean house with Congress, The Senate and The House. This is why we were given a right to Bear Arms.
sheebe on October 23, 2008 at 10:39 AM
Any one else think the market volatility is a forward looking reaction to a “he who must not be named” Presidency?
Ann on October 23, 2008 at 10:29 AM
marklmail on October 23, 2008 at 10:39 AM
If I may say so, Don Corleone would be very proud of the Democratic party.
~ “You WILL loan the government another 5% of your income and you WILL accept whatever pitiful interest rate they decide to pay you when you retire. This WILL be in addition to whatever taxes they decide to confiscate from you. Don’t like it? Have a talk with Luca.”
vitocorleone99 on October 23, 2008 at 10:40 AM
I am dead serious about Dennet.
Don’t cry!
hawkdriver on October 23, 2008 at 10:42 AM
So thats how they plan on paying for all those bailouts!
Listen up people— if you want to survive the Obama years find a second job you can do for CASH. Everyone including the rich like to save an extra $5 or $10, even if it means they can’t write off the repair.
Start thinking like a Cuban in Cuba.
Bicyea on October 23, 2008 at 10:42 AM
This is absolutely insane. The Dems want to create a new retirement system because of the market volatility which THEY created by meddling in the mortgage market.
The Red states need to become even redded and then secede from the blue socialist states. This is friggin’ madness.
DerKrieger on October 23, 2008 at 10:43 AM
I am seriously thinking about taking in 50% of my work income in unreported cash. Works for illegals and they get praised for it.
jed58 on October 23, 2008 at 10:44 AM
HD, If you haven’t mailed it yet, change duplicity to complicity. Hope you shoot straighter than you write!
Akzed on October 23, 2008 at 10:45 AM
When will financial planners start coming up with “hide your money” plans? I want to start talking now!
DerKrieger on October 23, 2008 at 10:46 AM
[hawkdriver on October 23, 2008 at 10:38 AM]
I got a kick out of Obama’s response to Wurzelbacher when he responded that his tax policy was intended to spread Joe’s “revenue” around. The One has no clue what he is talking about either economically or financially.
He does know communism though.
Dusty on October 23, 2008 at 10:46 AM
Hey, that’s great news.
I’m sure when I go to retire, I’ll get an IOU from fecal matter encrusted financial guru/pervert, Barney Frank.
Anyone even slightly considering casting a vote for a Democrat, any Democrat this election, is a complete idiot.
Complete idiots can light their money on fire by voting for corrupt, incompetent and treasonous Democrats, but why do they have to involve the sane community?
NoDonkey on October 23, 2008 at 10:47 AM
Dude, your sense of humor is seriously in overdrive. Way too much sexual innuendo this early in the am. But funny as Hell, just the same. And to make things worse, it always seems to be a Dhimmicrat screwing us over, and we are about to give them all three branches of government?
Subsunk
Subsunk on October 23, 2008 at 10:48 AM
Thank, but that was the intended word.
hawkdriver on October 23, 2008 at 10:49 AM
So, IOW they are borrowing from us instead of the Chinese and the Saudis to fund all their boondoggles and have a stream of pork-enabling cash?
Brilliant!
PattyJ on October 23, 2008 at 10:49 AM
All Baker Squares have shut down here on the Central Coast of CA. Four car dealerships, and a printing company. All because of the greed of our Government. The pork that they were given. Was our money. None of that pork benefited any of us. Just special interests. This Bail out was a ton for Samoa, Pelosi’s fishing business. This is what pis*es me the frick off! And also they gave money to Holly Weird. If they want to make things easier for us. Then why are they so stupid? Maybe force all banks to lower the mortgage rates for all to 3%? Set a flat tax or The Fair Tax? These are simple solutions that they can begin with. In Santa Barbara, they can start drilling oil. We have two refineries here. Our so called Governor in sheep clothing says we need money. Isn’t that a good start? If Ca. Law makers don’t ok it. Then they need to be ousted. I am so ticked off right now. Obama will kill our Country. On some other sites, I see Black Power. And, All you white people are stupid. And you white people are going to die. Of course that is ignorance. There are many Blacks, African Americans that don’t play that crap. Is time that the American People start raising hell. And try to curtail violence. But if necessary we might have to. To get our points across.
sheebe on October 23, 2008 at 10:50 AM
Oh, then I guess yer good to go.
Akzed on October 23, 2008 at 10:50 AM
And I don’t really shoot all that well, but I shoot a lot.
hawkdriver on October 23, 2008 at 10:50 AM
Not that it makes sense. but yer good to go.
Akzed on October 23, 2008 at 10:51 AM
Spray and pray!
Akzed on October 23, 2008 at 10:52 AM
If Obama wins the US goes down the drain and the rest of the world follows soon after.
Crux Australis on October 23, 2008 at 10:52 AM
Implementing the fair tax would stop this.
http://www.fairtax.org
We must not let Democrats gain more seats in Congress. We must defeat Obama. We work too hard to give our money away based on government decisions or choice.
mindhacker on October 23, 2008 at 10:53 AM
I’m sure the DEMS will shut down that website as soon as they get in office.
Bicyea on October 23, 2008 at 10:55 AM
Hey, it’s $3,000,000,000,000.
Q. How long can a pile of money that big not be snarfed up by congress?
A. When it’s called union pension plans in aggregate.
Akzed on October 23, 2008 at 10:56 AM
Under current law, taxpayers can deduct up to $10,000 per year of 401K contributions, and/or $4,000 per year of IRA contributions, from their taxable incomes. In a 25% tax bracket, that comes out to $3,500/year of tax savings incentive for saving for retirement. While not everyone can afford to put that much into a retirement account, this incentive is pulling hundreds of billions of freely contributed taxpayer dollars a year into IRAs and 401K’s, most of which is invested in the stock market via mutual funds. For a smart investor, the deal is: you contribute a net $3,000, the Government kicks in $1,000 in tax savings, and you make compounded returns for decades on $4,000, which are only taxed when you take them out.
Take away the tax incentive on IRA’s and 401K’s, and the stock market would tank BIG TIME–Dow 5000 or less! The Democrats’ plan would have more effect than the $700 billion bank/mortgage bailout, but IN REVERSE!
Do the Democrats really want to repeat 1929? This is the way to do it!!!
McCain and the Republicans have to hammer this HARD! This plan is basically undoing the Reagan boom!
Steve Z on October 23, 2008 at 10:57 AM
With Foo Man Rudd and Hanoi Julia in charge of Canberra, it’s already too late for you.
OldEnglish on October 23, 2008 at 11:00 AM
Yep.
As far as the taxes, I’m kind of with what an earlier poster said. I’m going into a business after I retire where I could sell my wares at a flea market until “real” conservatives get back into power and the taxes are lowered again. I’ll hide my money in my mattress. Dear leader will have to send his Goon Squad to get it.
hawkdriver on October 23, 2008 at 11:03 AM
This topic just reminded me to stop by the gun store and buy another case of 308’s and get a quote on a Barrett 50 cal.
David in ATL on October 23, 2008 at 11:03 AM
I’ve listened to Boortz talk about the Fair Tax Plan but I get confused about one aspect of it. Which is easy because I am an idiot when it comes to finances. But how does it work to drive a “new” housing market when only new homes will be taxed? Or am I incorrect about the way that would work?
hawkdriver on October 23, 2008 at 11:07 AM
The poor and middle class are so screwed….the wealthy elites want to keep the masses poor. The dems are the wealthy elites. They do not want the masses to dream of a wealthy future. Sounds like the Soviet UNION. Can we call these communists idiots un-americian yet?
unseen on October 23, 2008 at 11:10 AM
When i first heard of this a few weeks ago I went to a Democrat and described the plan, then asked her who would come up with such a terrible idea-
“Republicans?”
“Nope-Democrats.” I will be printing this page up to take to work.
Doug on October 23, 2008 at 11:14 AM
No. It will not eliminate, it could not eliminate the insolvency. It would, at best, only delay the inevitable. As of today, economists like Sowell and Williams are clear, we now have maybe eight years to get SS and Medicare under control. After that, we’re on a runaway train that can not be stopped on our way to the cliff.
Conservatively, the amount that is needed to be put away today, today, is between $56,000,000,000,000-$70,000,000,000,000 (that’s trillions kids). Not tomorrow, not next year, not in five years, today! Cash in a real lockbox. And that large sum is added to in the amount of $4,650,000,000,000 each year.
This will pit the Baby Boomers (”We want OUR Social Security and Medicare”) against our children and grandchildren who will have to pay for it. It will be inter-generational civil war.
Well, if you have a Congress and politicians with their radical allies in the press who can’t see an energy crisis coming when the resources to avert that crisis are here in our own country, what are the chances this crisis will be addressed?
The “bailout” is pennies in the pocket.
I suggest you all prepare for the upcoming disaster by practicing the four G’s: God, Gold, Guns and Groceries.
Amendment X on October 23, 2008 at 11:18 AM
since they spent the SS into an oblivian they want to create a new pot of money to steal from. That is after all the life blood to any politian. $$$$GREED$$$
lwssdd on October 23, 2008 at 11:23 AM
“Dawn of the Democrats” coming to a town near you soon. The only way to stop this madness is to vote them out of office.
Kevin in Washington State on October 23, 2008 at 11:24 AM
WTF are these people smokin?
Old Hippie Vet on October 23, 2008 at 11:26 AM
You seem to be saying that if the government doesn’t subsidize it with a tax break it is not an option. You seem to have psychologically surrendered to big government.
snaggletoothie on October 23, 2008 at 11:31 AM
It is kinda like Soylent Green, in weed.
They are smokin Dead People!
upinak on October 23, 2008 at 11:31 AM
When one considers the extent of the govt’s future unfunded obligations for things such social security(currently a direct transfer payment), it is clear that future benefits will need to be dramatically reduced while taxes will need to be raised. Quite simply, the demographics will cause the current Ponzi scheme to come to an end.
With that in mind, it boggles the mind to think that Democrats want to go in the wrong direction and make it more difficult for savers to build their retirement nest egg.
moxie_neanderthal on October 23, 2008 at 11:33 AM
I wonder… When the time comes that those of us in the younger generations simply cannot carry the tax burden anymore – when we begin to default in April of each year – will our elders support us being jailed for it? Will they watch us lose our homes when we can’t afford them anymore and be angry at us for failing in life? How will they support us when we move back into their houses with them, with their grandkids in tow, when they’re depending on US to pay for their retirement?
Do the Boomers and older generations understand that the money they paid into SS is gone, and that the money they are or will be drawing from the system is taken from the sweat of their children and grandchildren?
Do they understand that they might be the last generation that is able to build wealth and retire? Do they understand that their entitlements literally rob their children and grandchildren of the ability to save for their own futures? Do they care?
(P.S. By “they,” I’m referring to the average Boomer or older person, not those who are here at HA and clearly DO understand what’s happening.)
I fear you are correct, Amendment X, and generational civil war is brewing.
aero on October 23, 2008 at 11:34 AM
My God. This is a big deal. I work in the IT industry, and did for years as a consultant. There is no retirement plan or pension, only what we can put in our 401k.
If they try to implement this, they’re going to have to call in the military… because I would consider this a personal attack upon my ability to provide for myself and my wife.
I normally don’t like to go all Armageddon… But this would be nothing less then the start of armed conflict.
dominigan on October 23, 2008 at 11:36 AM
I’m thinking about investing my 401k in a warehouse full of vodka and selling shots. It gets really cold standing in those bread lines!
Bicyea on October 23, 2008 at 11:37 AM
Yes, that’s exactly what they want. As Rush is fond of saying, what’s bad for America is good for Democrats. A repeat of 1929 would allow them to nationalize/socialize more and more industries with the support of a panicked population desperate for the government to save them.
aero on October 23, 2008 at 11:42 AM
If this isn’t enough to get the fence sitters out to vote, then I don’t know what will.
Obama cannot be allowed to win. Pray people. Pray hard.
Pulchritudinous Patriot on October 23, 2008 at 11:43 AM
They are already chortling about a New Deal V2.0.
Of course they want a new depression.
MarkTheGreat on October 23, 2008 at 11:46 AM
I guess they can’t loot enough out of Social Security fund now they want to sink their fangs into our 401Ks.
Any working adult who votes Democrat has got to be insane.
CrazyFool on October 23, 2008 at 11:49 AM
Selling off govt assets would cover most of this. The govt owns close to 1/3rd of all the land in the US.
MarkTheGreat on October 23, 2008 at 11:49 AM
Seems only fair. After all the work they went through so the dead could keep voting.
MarkTheGreat on October 23, 2008 at 11:50 AM
People with their own nest eggs aren’t dependant on govt for survival.
MarkTheGreat on October 23, 2008 at 11:51 AM
Mattress meet cash
Mr_Magoo on October 23, 2008 at 11:53 AM
No they don’t. I had this argument with my wife’s grandmother. She was convinced that every penny that she and her husband had contributed was in a bank account drawing interest, and that they money they were receiving was from that account, and only from that account.
After all. FDR had told them this was the way that the system was going to be set up.
Nothing I showed her was enough to convince her. FDR would never have lied to them, therefore everything I showed her was nothing but lies.
MarkTheGreat on October 23, 2008 at 11:54 AM
forget the amount of money you personally will lose what is this going to do to the market when all this money isnt flowing into it.
CaptainObvious on October 23, 2008 at 11:55 AM
not that the personal loss isnt bad but crashing the market wont be very personal account friendly either.
CaptainObvious on October 23, 2008 at 11:56 AM
But who could afford to buy it? China?
aero on October 23, 2008 at 11:57 AM
McCain needs to offer a bill to ELIMINATE ALL PENSIONS for House and Senate mambers. Make them contribute to their own retirement plan like I do as a self-employed person. If we lose our “subsidy” of a tax break, why should they get a 100% taxpayer funded pension?
roninacreage on October 23, 2008 at 12:01 PM
Currently, about $4.7 trillion or 45% of our national debt is comprised of unfunded trust funds, the biggest ones being the FICA and gasoline trust funds. This will divert another 5% of payroll into another unfunded trust fund.
The national debt will soar and congress will get to play with another 5% of payroll as revenue.
What a scam!
Laurence on October 23, 2008 at 12:01 PM
Yep. As far as I can see the plan is to establish socialism which will usher in universal health care. They will use the health care system to hasten the boomer’s shuffle off this mortal coil, thus solving any number of problems.
It’s going to be a holocaust, but this time against seniors and not just Jews. Race, creed, religion, etc won’t matter. Only age.
You can already see it happening. Even now, when we’re paying for our health care (as opposed to getting supposedly ‘free’ health care… yeah, right), that care is getting worse and worse. Doctors aren’t really healing people. They’re putting them on anti-depressants in an effort to get them to shut up and go away.
techno_barbarian on October 23, 2008 at 12:03 PM
You’re asking why?
Simple answer: If Bush wants to do it, its bad. If they want to do it, its good. And if they mess up, they can blame Bush for it.
Ryan Gandy on October 23, 2008 at 12:05 PM
When I read your story, I remembered having a discussion with a fellow commenter at NewsBusters. He was at that point already drawing SS checks and took umbrage to my statement that my generation is paying those checks in real-time and that there won’t be anything left when we get to retirement age. He insisted (and this is a well-informed conservative talking) that he is only getting his own money back and would never take a dime of mine. He clearly thought I was being a selfish brat who wanted his money AND mine. After about 10 other commenters jumped in with links and statistics and other forms of proof of the pay-as-you-go nature of the SS Ponzi scheme, he was very, very humble and horrified to realize that he is, in fact, taking money from his kids and grandkids. He pointed out that he has paid into the system his entire life and that he therefore deserves to get what he was promised. I could not disagree with that, but reiterated that someone is going to lose this game of musical chairs. If the current older generations can’t or won’t graciously give up the last chair, it will by default be their children and grandchildren who lose. That makes people like the older commenter I encountered at NB sad, but not sad enough to refuse their SS checks or forego their Medicare benefits. They seem to have faith that somehow their children and grandchildren will find a way to make more chairs appear out of thin air. I hope their faith is not misplaced, but the Democrats are not planning to create an environment conducive to chair-building.
aero on October 23, 2008 at 12:09 PM
I’m a second wave boomer, aero, and I completely feel your pain. I’m in my early 50s and have been paying into social security my entire life. I will not see a dime from it when/if I get to retire.
The solution is financial education starting from the earliest formal education, but that’s not happening, or likely to. Our educational system is set up to indoctrinate for dependence, not educate for independence.
The solution I think the ascendant socialist dems will quietly implement is in my above comment. Drain the elder generation as much as possible and then withhold care and medicine and let us die off as quickly as possible.
In their minds, it will be the only way.
techno_barbarian on October 23, 2008 at 12:09 PM
Here is the perfect Republican “The Democrats want to steal your 401k money” moments.
The Democrats are masters of political theater hysteria when it comes to “The Republicans want to cut your Social Security”….
Will the Republicans be astute enough to engage in this political theater moment and raise hell with this and wave this bloody shirt before the cameras?
Don’t.hold.breath
mylegsareswollen on October 23, 2008 at 12:14 PM
Exactly.
Bingo.
Buy Danish on October 23, 2008 at 12:23 PM
If they come anywhere near my 401(k), there will be pain and suffering… and it won’t be MINE.
D2Boston on October 23, 2008 at 12:23 PM
I knew it was only a matter of time before the Democrats started looking enviously at the only retirement money left in America… the 401k’s. Yes boys and girls, the Democrats have already stolen your Social Security and now its time for them to steal your 401k’s as too. Can you say REDISTRIBUTIONISM ?
Yes Sir… spread that wealth around !!!!!!!
Big surprise hun?
Maxx on October 23, 2008 at 12:29 PM
funny…
http://www.jasonpye.com/blog/2008/10/cartoon_of_the_day.html
unseen on October 23, 2008 at 12:38 PM
While the story is pretty scary, I think if the Dem-dunces actually went forward with anything like abolishing people’s 401(k) accounts, there would literally be a revolution–spontaneously, by the majority of the American people–throwing the socialists out of power.
indythinker on October 23, 2008 at 12:39 PM
Anyone with a 401k is considered rich, therefore they must be taxed. It’s obviously unfair that they are planning for their retirement by hoarding money that rightfully belongs to those more deserving.
/sarcasm off
Dave from Flint on October 23, 2008 at 12:39 PM
The other answer I often get from older people in response to my concerns is along the lines of “Don’t worry, young whippersnapper. I’ll be dead soon enough and you can have my piece of the pie.” I’m not sure if they think, as you do, that the government will soon begin encouraging them to die off sooner than they might otherwise, or if they’re simply expressing resentment of my resentment. Either way, they’re wrong about the pie analogy. There won’t be even a crumb of their piece of the pie left for the next generations (in fact, their piece of the pie was eaten before they got there, too). This won’t change, even if the socialist government begins engaging in active euthanasia after the age of 70. (Can’t get the image of the blinking red palm-lights from “Logan’s Run” out of my head!)
aero on October 23, 2008 at 12:43 PM
My sentiments exactly.
I can see already that I’ll need more ammo…
Wyznowski on October 23, 2008 at 12:46 PM
Bad ideas travel fast among the political class.
This notion predates Kirchner’s proposal to seize all the private pension funds in Argentina (”to prtotect citizens from losing their money…” heh.)?
Harry Schell on October 23, 2008 at 12:48 PM
Your retirement plans in the hands of Barney Frank.
This would go exactly the same way of Social Security.
That is, right into the spending pool.
drjohn on October 23, 2008 at 12:53 PM
But do 401(k) holders constitute a majority, or even anything close to a majority? Statistically, there are more poor people than middle-class and above, aren’t there? I might be wrong about the numbers, but Dems might not be worried about going after 401(k)s because less than 50% of potential voters have them.
Of course, that doesn’t preclude the minority who DO hold 401(k)s from breaking out the torches and pitchforks (and shotguns). It just means that going after 401(k)s might HELP Dems win, at least election-wise, not hurt them.
I do think there would be a violent reaction to a Congressional move on 401(k)s. I hope you are right and the threat of such a reaction would be enough to stop a Democratic supermajority from moving forward on such a terrible scheme.
aero on October 23, 2008 at 12:54 PM
Fellow blogsters:
PBS has an online poll asking if Palin is experienced enough. Currently, the results are neck and neck. Go and vote now! Here is the link:
http://www.pbs.org/cgi-registry/poll/poll.pl
ErinF on October 23, 2008 at 12:58 PM
I had to run a search to find this page, directly:
http://www.pbs.org/now/polls/poll-435.html
pambi on October 23, 2008 at 1:04 PM
They won’t stop with the 401K’s. They will also go after the IRA’s and the Roth IRA’s. Especially the Roth IRA’s. After you put after-tax money in a Roth, everything then thereafter is tax free. This will be a big target for them.
cjs1943 on October 23, 2008 at 1:09 PM
You have no idea how true that is. And economic issues are only the tip of the spear.
Since WWII, the US has progressively become – more and more – Western Civilization’s final bulwark against other hostile civilizations: namely, Islam and the Russians, with the Chinese on the periphery. And those enemies are watching this election with drool running out of their mouths, because they can taste that the final bulwark is about to collapse.
If the US electorate gives the Presidency to this nothing-of-a-man; a man with no executive experience, no military experience, no foreign policy experience, and a knee-jerk pacifist; a mere 7 years after successful attacks on the hearts of American finance and military military might; it will be a clear and unambigious signal that there are no longer any serious nations left in Western Civilization.
Expect to see more Russian aggression in neighboring states…more Islamist aggression in the Middle East, Pakistan, and Afghanistan, as well as more terrorism worldwide…and expect a Chinese move on Taiwan, along with more aggessive stances in Asia. And overall, look for oil to become an economic weapon that OPEC and Russia will wield against the West with devastating results.
Get ready for another worldwide conflagration: one that I would bet money is going to give rise to civilization-changing results in Europe…akin to the fall of the Ottoman Empire after WWI.
Really…truly…I am simply horrified at what I’m witnessing unfold in front of my eyes.
rvastar on October 23, 2008 at 1:09 PM
rvastar on October 23, 2008 at 1:09 PM
and the ballon will go up in Korea
unseen on October 23, 2008 at 1:12 PM
I read a couple of months ago, I think it was perotcharts, that the government would have to seize the 401k system. I just didn’t think I would hear about it so soon.
DFCtomm on October 23, 2008 at 1:16 PM
If any Fair Tax guys missed the question but can wxplain this to me, I’d really appreciate it.
hawkdriver on October 23, 2008 at 1:18 PM
This is my biggest fear coming to fruition. This is why I left my 457 and DROP investments with my old employer when I retired. If Obama does win, I think I’ll just take the tax hit before he has a chance to increase the top % and withdraw them both and bury the cash in the back yard.
Texas Gal on October 23, 2008 at 1:35 PM
Not true. We entered de Tocqueville territory long ago.
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
Alexis de Tocqueville
The public has gotten a taste and won’t be pulled off the trough. We have started down a road without an exit. The only way out is to go through the cataclysm.
DFCtomm on October 23, 2008 at 1:37 PM
If the Democrats control both Congress and the White House, kiss your 401(k)s goodbye, and get into the bread lines first before the crowd arrives.
In all seriousness this is exactly why it’s hard for me to take anyone seriously who votes straight democrat as an “intellectual”.
Personally, I’m buying property on the cheap, buying gold, and cancelling my investments. America will get the leadership it wants. Unfortunately at this point I think that’s Obama and more of the dem’s socialism lite. Apparently not that lite.
I’m anticipating a major depression once the dems take office. What we’ve seen is a fart in the wind compared to what’s coming if they manage to get a filibuster proof majority.
Say good by to investments, retirement plans, and the value of anything short of land and gold. Say hello to a tiny elitist group of ultra rich leftists, and the vanquishing of the middle class in exchange for government hand outs.
I’m not moving to another country – Just bracing for a long winter.
One Angry Christian on October 23, 2008 at 1:39 PM
The public has gotten a taste and won’t be pulled off the trough. We have started down a road without an exit. The only way out is to go through the cataclysm.
well said.
One Angry Christian on October 23, 2008 at 1:40 PM
These tax-deferred investment vehicles seem incredibly important to individuals and to our stock markets. They’re the primary reason that we have so many Americans in the stock market.
Are they idiots? McCain campaign, start sounding the alarms now! Between Obama, Biden, Fannie-Freddie hearings postponed until after November, and now this, McCain and Palin have to position themselves as the voice for Americans against this sh*t.
BuckeyeSam on October 23, 2008 at 1:41 PM
fixed it…
right4life on October 23, 2008 at 1:42 PM
Wait a minute. I just noticed this. A tax break on retirement investment is a government “subsidy”? What? The government refraining from taking our money is a “subsidy” now?
aero on October 23, 2008 at 1:42 PM
I thought the 401(k) acted as a tax deferment for a limited amount of annual income and when you eventually withdrew the funds, they were then taxed as income. Is this right?
Texas Gal on October 23, 2008 at 1:45 PM
My understanding of the fair tax on a new home purchase:
The new home will be taxed, but…the price of the home will cost less originally because all goods have an imbedded tax built into them to account for the cost of complying with the US tax code. I believe hte embedded (hidden) tax has been extimated to be about 25% the cost of a good. If you bought a $100,000 house, $25,000 of that cost ended up being paid by suppliers to the govt is some form of tax or eaten up by the suppliers’ accountant. Under the fair tax, you buy the house for $75,000 and pay the fair tax on the $75,000. I don’t remember what the fair tax rate is, but it is less than 20%. You save money and the nightmare paperwork.
I do think burying a little money in the backyard may not be a bad idea. Just don’t tell anyone where you buried it. I have an idiot cousin who works only for cash (trying to hide from the IRS, I think) and buries it. He told a close friend about it, probably while high, and low and behold, it disappeared, as did his friend.
bopbottle on October 23, 2008 at 1:49 PM
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