Will the Government Confiscate 401k, IRAs?

The idea securities were not safe inside of institutions, and in particular in 401k or IRA accounts sound like the fodder of extreme paranoia. Yet reports in recent months strongly suggest that the Obama government is looking at ways to "protect" us from losses in our retirement accounts.

While the adminstration is mum, speculation centers on proposals byTeresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 that drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workersâ€™ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

Ghilarducci argues that because financial advisors are imperfect in their advice and charge high fees, people would be better off with a government annuity providing guarateed income.

But nationally synidcated financial talk show host recently said Bob Brinker that these ideas should not even be discussed as they are clearly confiscatory. Brinker considers this criminal and compares the GRA to Argentinia's seizing of pensions.

And it is suspect whether or not helping workers is the real motive here. Recently CNBC's Rick Santelli was discussing the potential to “effectively force money into the Treasury market.” He links to this quote from Businessweek:

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

In a recent article titled “401k/IRA Screw Job Coming?” Karl Derringer wrote:

Let me tell you what this is – it is an attempt to prevent the collapse of the Treasury market!

Forcing people into Treasuries as an “annuity” is exactly what Social Security allegedly is. Except that Treasury stole the money that was collected in FICA taxes and spent it!

Guess what? They’ll do that here too – you’re going to “invest” in Treasuries which of course are effectively a CALL option on the future taxing ability of the government.

He also notes that the conversation on CNBC was omitted from its archives. Since then, the link has also disappeared from Businessweek. The link has also disappeared from MSN Money. Use your best judgment as to why they disappeared. However, in an article from the Buffalo News titled, “U.S. Wants Workers to Invest in Annuities,” there is some interesting information to be found. This article hasn’t been pulled — yet., notes Karen De Coster who has been closely following the story.

Tags: Bank Failure, Dollar Devaluation, Financial Frauds

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