Tuesday, March 9, 2010

Government Plans to Loot Your Retirement Account

In a proposal entitled EBSA Proposed Rules, the Labor and Treasury departments are requesting information from employers, employees, financial institutions and others regarding Retirement Accounts. They "are asking for public input about the use of annuities in defined-contribution plans, such as 401(k)s. . . . including the advantages and disadvantages of distributing benefits as a lifetime stream of income . . ."

The 401(k) plan was created and is regulated by the government. It consists of two types of plans: the Defined Benefit and the Defined Contribution. In a Defined Contribution plan you can contribute whatever you want as long as you do not exceed your salary. Opting to take a lump sum upon retirement assures that you will at least get most of your retirement money out from under government control and will be able to invest it outside of government retirement plans. If, however, you opt for the Defined Benefit plan you might become understandably concerned that your retirement funds might not be steady, or that you might not be paid at all---given the huge debt the government has incurred and the state of various government programs. Consequently, retiring individuals increasingly choose to receive a lump sum upon retirement rather than "a lifetime stream of income."

Department of Labor data shows that the "number of active participants in Defined Benefit plans fell from about 27 million in 1975 to approximately 20 million in 2006, whereas the number of active participants in Defined Contribution (Page 5254) plans increased from about 11 million in 1975 to 66 million in 2006."

One of the requirements of the plan mandates that employers think for their employees. At present, employers are required to help employees choose payout options that suit their individual circumstances, while assuring adequate levels of such income to the extent possible." This, the Proposal deems "insufficient;" so, it demands that employers also provide the retiring worker with "several types of information, such as on risks that could affect retirement income security, could help retiring participants make more informed decisions regarding how they balance income and expenditures during retirement."

Further, the employer is required "to provide participants with a notice on risks that individuals face in managing their income and expenditures at and during retirement." And more: Employers "are responsible for making contributions that are sufficient for funding the promised benefit, investing and managing plan assets (as fiduciaries), and bearing investment risks because the employer, as plan sponsor, is required to make enough contributions to the plan to fund benefit payments during retirement."

On several levels this is one of the most sweeping violations of individual rights. It is an open assault on Americans' life and income. It is not enough that employers are forced to pay into their employees' retirement accounts. Now every job creator, every employer large and small will be forced to spend hours and mental effort in unpaid service advising his employees how to use retirement funds.

From the perspective of the employee, the EBSA Proposal is equally unjust, violating their rights as well. It wants to force Defined Contribution employees to use "a lifetime stream of income"---i.e., government issued annuities---thereby forbidding lump sum payouts. In other words, the employee's money will no longer be his to use as and when he wants it. Government officials will decide when employees can have the money they've earned and how they can receive it. When government takes over retirement accounts, the money will not be invested in reputable securities earning a return and watched over by expert investment analysts. The money will be siphoned off for other schemes, as is the money one pays into Social Security and Medicare. Employees' savings will be wiped out.

The Proposal is undisguised looting of employer and employee alike.

The Proposal is not only immoral, it is also, as all immoral acts, wildly impractical. The EBSA Proposal is based on the assumption that savings are static and can be withdrawn from its function with impunity. But when withdrawn, savings become merely a sum that can be exchanged for something else. They are no longer savings.

A nation's savings are the fundamental means of fueling a growing economy as well as cushioning unexpected setbacks, such as natural disasters. In a mixed economy such as ours---i.e., some freedom and many regulations---the continual setbacks ignited by government interference cause a declining standard of living. Savings, therefore, become even more acutely important---especially to youngsters starting out, bright with ambition and teeming with ideas. When savings dry up, so does economic growth.

Savings are savings because the wealth it comprises is viable. Were it not for savings, financial institutions would not have a reservoir of money that could be used profitably to finance new ventures, make loans and extend credit to trustworthy, hard-working clients. The profit from such contractual agreements benefits the institution as well as its savers, i.e., its account holders, shareholders and investors, thereby increasing the wealth of all.

Were it not for savings, the simplest everyday purchase could not be made. That ready cash in your pocket? It is there because someone somewhere has savings. The employer who paid you your salary had to have savings on which to draw. The grocer has goods to offer you because someone somewhere has savings and extended him credit. The auto shop that maintains your vehicle relies on someone's savings to ensure its payroll, support its inventory, accept your credit card and anticipate slow business days. And so forth.

In an industrial nation, men cannot successfully live hand-to-mouth, as once they did, and as the oppressed peoples in under-developed countries are forced to exist today.

Savings are not currency stuck in a can and buried in the ground. Savings today are in pension and retirement funds, almost all of which are in securities of one form or another. Most of those funds are in 401(k)s. Many of those funds were hard hit in the disaster following the government "affordable housing" fiasco. Many accounts suffered losses of 50% or 75% of their value. Some lost all their value.

Accounts that did not suffer such drastic losses were held by the most financially responsible institutions and individuals. They are in effect now the only ones providing savings until others get back on their feet. The Treasury wants that money. Consider what that means.

Retirement accounts are the nest eggs of those who have worked to provide for their old age. They are the nest eggs of those living on fixed incomes---the retired---of those about-to-retire and of the young. The sum total of American retirement accounts is in the trillions. Should this proposal be made "law," it is obvious where that money will go. The government has incurred gargantuan debt. Turning Americans' retirement accounts over to government control is not merely economic insanity. It is economic suicide.
There is no justification for destroying those who have saved. To destroy them on the pretense that such destruction "helps" those who have not saved is based on the same premise that sticking a finger in a dike's hole will prevent the dam from bursting. It is unrealistic, wishful thinking.

Those who have taken responsibility for their retirement cannot help those who have not. The irresponsible will be as irresponsible with what he's given as he was previously. Forcing the responsible to give to the irresponsible merely drains both pockets.

Savers have built retirement funds over years of work, their effort making innumerable goods and services, creating a prosperous, viable economy. Once the savers are destroyed, so will be all those who depend on them---including "low-wage employees," about whom government officials claim to be concerned. Is that what government officials want?

Readers are invited to leave a comment regarding the EBSA proposal on the web site: The Treasury has asked for comments regarding its idea to take over retirement accounts.

Labels: , , , , , , ,

Monday, March 8, 2010

Alinsky & Obama

Recently I finished reading Rules for Revolution, by David Horowitz.* There, Mr. Horowitz discusses to some extent Saul Alinksy's influence on Mr. Obama and Hillary Clinton. But his main thesis is identifying some aspects of Alinsky's goal to destroy the United States---as discussed in Alinsky's Rules for Radicals.

Alinsky is not a philosopher. He is a political activist who holds the same premises of every collectivist. He believes that the individual and his work belong to the group. He goes farther. He seeks to destroy everything in the name of establishing heaven on earth. In other words, Alinsky is a nihilist.

Ayn Rand identified Herbert Marcuse as the philosopher behind the 1960 uprisings. But unknown to most, including the media, Alinsky was training those who were at the forefront of police-baiting, street riots, campus destructiveness and howling down university speakers. All the while, he successfully stayed in the background during the 1960 upheavals.

Mr. Horowitz reports that Alinsky was the friend and student of the notorious gangster Frank Netti, Al Capone's first lieutenant. Putting to use what he learned from Netti, Alinsky began to organize and train community leaders in Chicago, himself participating in that city's political corruption. Years later, he trained Barack Obama, said to have been his star pupil.

As President, Obama has placed Alinsky followers in key positions, some as "czars," un-elected, un-appointed---and therefore unquestioned through congressional hearings---accountable to no one.

Mr. Obama has flawlessly absorbed Alinsly's teachings, one of which is the technique to never say what you mean, always evade the entire context, never identify your actual goals. As an Alinsky student, for instance, if you bow to a foreign ruler, you know your motive is to belittle the country you represent. But you do not admit that. If you apologize for your country's alleged wrongs, you must ignore the wrongs done to your country. But never admit this. If you criticize a loyal ally, you must never admit you do so to destroy that alliance. Your wife can help out. For instance, if she calls Americans "mean-spirited," she must evade knowledge of their unmatched generosity. If she is proud of your country only because Americans elected Alinsky's student, she must never admit that that is what is meant.

The truth does not matter. Facts do not matter. The only thing that matters is how much you can get away with. You can spend $7,000 "out of your own pocket"---a pocket filled by taxpayers---to buy your children a swing set but express indignation that some executives are paid bonuses for work performed.

You can let your wife and children use Air Force One---a jet owned by the American public---to shop in Paris and go to lunch in London but chastise distinguished American executives for flying in their private jets to a Washington D.C. meeting.

You can encourage hatred of the rich while confiscating middle class wealth. You can agitate distrust between unions and management. You can take over banks and large companies in the name of the employed, while "saving" financial institutions by inflating the currency.

The goal is to destroy trust, to undermine cooperation, to confuse those who like you and to obliterate those who do not. As Alinsky taught: "The issue is not the issue. The issue is the revolution." And the revolution is to polarize Americans, wreck the American economy, reduce the United States to poverty by destroying the rich and giving political power to the "Have Nots." The technique is not original to Alinsky, or Obama.

Consider the murderous havoc of the French Terror, for instance. Or recall the slaughter of millions and the suffering of the Russian people under the Soviet Communists. Remember the Nazi Holocaust. That is what happens when the desire for prosperity is called "greed" and a man's refusal to earn his own way is said to "entitle " him to the worker's paycheck.

Although neither Alinsky nor his student Obama would ever admit it, the refusal to earn your own way is the mark of the "Have Nots;" earning your own way is the mark of the Haves.

What is it the "Haves" have? Money. Property. Where does money and property come from? From economic power. From the power of thought, of ideas, of putting ideas to work, of creating jobs and making money and earning a living.

What is it that the "Have Nots" have not? Political power. What is political power? It is not influence. It is not wealth or others' approval or admiration or a large following ready and willing to do your bidding. The essence of political power is the gun. It is the gun that the "Have Nots" will be given. The power of the gun will physically coerce the "Haves" to obey the "Have Nots" and the "Have Nots" will be ruled by irrationality. The result is heaven on earth.

The destruction of a civilization is not the nuking of many cities. It is a gun in the hands of the thoughtless, which make laws and enforces them.

Whatever happens on November 2, 2010 will indicate whether we have time to re-vitalize the principles and the ideals of our Founding Fathers---or not.

*David Horowitz will be the speaker at an Albuquerque Tea Party event in May 2010. For details access www.abqteaparty.com

Labels: , , , , ,