THE US REPORT

I’ve said our current Congress is the worst in history and every day my belief is confirmed. The Committee on Education and Labor has been taking testimony about the losses in 401k plans. What the committee overlooks is the inherent risk in such a plan. If you invest in instruments or plans that may offer a high return you are agreeing to risk. Note that you are responsible for managing your 401k.

When the mortgage industry tanked due to the goverment's worst plans ever (Freddie Mac and Fannie Mae), a lot of 401k plans declined in value. I believe many union plans were affected. But in a crisis, bureaucrats see an opportunity to put their hands in your pockets.

One professor at The New School, a left-leaning institution, suggested that Congress let workers trade their 401(k) and 401(k) - type plan assets (perhaps valued at mid-August prices) for a Guaranteed Retirement Account composed of government bonds (earning a 3% return, adjusted for inflation). The professor said:
       “When the worker collects Social Security, the Guaranteed Retirement Account will pay an inflation adjusted annuity, based on the accumulated funds…Going forward, I propose Congress establish universal Guaranteed Retirement Accounts and the federal government deposit $600 (inflation indexed) in those Guaranteed Retirement Accounts every year for every worker. Every worker (not in an equivalent defined benefit plan) would save 5% of their pay into their Guaranteed Retirement Account to which the government pays a 3% inflation-indexed guaranteed return.”

So kiss 5 percent of your salary goodbye—that’ll go for what amounts to a new payroll tax. You are definitely going to need the ‘tax break’ the Democratic candidate promised.

Welcome to your pending uber socialist government. Those of us who like being in charge of our own retirement plans should be speaking very loudly about this. Fine by me if others want to trust the government with retirement savings. I absolutely do not. We’ve paid social security taxes all our lives and we are not likely to see a dime of that money. Dems want to raise the cap on the income taxed on that as well. This GRA plan is just another version of a social security tax.

What’d I tell you about Democrats? They never met a tax they didn’t like. This is, to put it mildly, an outrage. I had to dig the document out of the committee website. And while the Democrats are promising you a tax break, one hand gives while the other grabs. This new plan would do away with the deduction you get for your contributions now. And driving the socialist point home, the testimony notes:
      "First, this is a fiscally responsible plan. Rearranging tax breaks is revenue neutral, efficient and fair because the current tax breaks. [sic]High-income earners get a much higher subsidy than anyone else because they are more likely to have a 401(k) and contribute more."

So we’re supposed to be penalized for saving more? We already pay interest on savings as well. And by the by, an income of $100,000 is considered high. So if both of you work and earn fairly decent pay, get ready to be "patriotic" and cough up more bucks to the government. "Spread the wealth" and all that.

Welcome to the New World Order and yes I am infuriated. Tip of the hat to Dakota Voice for bringing this to the public’s attention. Big media is asleep at the wheel—plus they are not going to rock the Democratic boat this close to an election. If Obama wins the election, we will have a Democratic Congress controlling a Democratic president. I predict many (peaceful) marches on Washington by those of us determined to hang onto democracy. Ask yourself what doing away with 401k plans will do to an already battered stock market. And then watch your savings decline even more. I recommend buying gold. And not collectible coins, either. Just in case. While  media is praising Obama's economic credentials, they are not reporting to you accurately. They have fallen in love with an illusion of "hope and change." Remember what I said as government creeps into your life on a daily basis. I suggest you accustom yourself to greeting people with, "Comrade."