Your retirement accounts: Future funding for the growth of government

Many of you that read this blog I know are older than I.  I also know that many of you have been responsible within your working years, having set aside money to aid in your retirement.  There are even some of you that are living off your hard earned (and invested) retirement dollars now.  However, there are now talks on Capital Hill that the Government needs to "protect" you from the uncertainty of retirement investing.

Yes, you read that right.  The government is now holding Department of Treasury committee meetings on "lifetime income options for retirement plans".  For those of you that don't speak politics, the above can be revised to say "How can we nationalize and confiscate the retirement plans of hard working Americans to help fund and grow our entitlement agenda".

Don't believe me?  Check out the Peter Heller article "US Departments of Labor and Treasury Schedule Hearing on Confiscation of Private Retirement Accounts".   If you don't want to take Heller's word for it, you can see the press release from the Dept. of Labor regarding the hearings here.

The long and short of the plan is based on an idea by Teresa Ghilarducci, a professor at the New School of Social Research, to eliminate the incentives of popular tax plans, namely 401K and 401B plans.  This idea involves workers transferring their current assets into Guaranteed Retirement Accounts (GRA) created by our ever-benevolent government.  In return, the government would deposit an inflation indexed $600/year into the GRAs, while workers would be required to pay 5% of their pay into the same.  For this, the government will guarantee a 3% return on investment for each account and upon retirement, the government would then convert that payout into an annuity, payable each year to the retiree, supposedly to ensure that the retiree has a "life long source of income after retirement". 

So what's the problem that they are trying to fix here?  It seems that the government does not think that the American public is smart enough to handle their retirement financial affairs.  Their operating premise is that employees are put at "undue risk" because generally retirement investments are presented in a "lump sum payment" thus making them "responsible for ensuring that their savings will last throughout their lifetime".  Again, the fed wants to play the "American people are too stupid to take care of themselves, so we need to do it for them" card that has become the standard operating procedure here of late.

So why this new found concern for retirees?  Could it be that the government is generally worried that retirement investment income will not last sufficiently thru a worker's golden years?  Well, if you believe that, please log off my site, cause reality is not something that you show an interest in!  No, the reason for this sudden found interest is for nothing more than a huge cash grab intended to help fund the behemoth that is US Government policy.  According to the Investment Company Institute research on 2009 retirement market, total US retirement assets are sitting at ~$16trillion, up 14% from 2008.  Considering the spending orgy that this current administration has been on, this is simply too much money to ignore and boy would that come in useful in furthering the beaurcracy and entitlement mentality of our new found socialistic "hope and change" for America.  Therefore, they are now considering the nationalization (confiscation) of American retirement accounts.

So what does this mean to workers?  Surely a guarantee of retirement income is a good thing?  First, since the GRA payout is converted to annuity, upon death, the benefit will terminate.  No matter how much you saved, your heirs would no longer be able to inherit anything left over from your hard work and thoughtful savings and investment.  Similar to Social Security accounts, the remaining funds would simply revert back into the general fund.  Second, you will only be guaranteed a 3% return.  Even with a finicky stock market, the average rate of return from money market and IRA accounts average 7%.  Right from the start, you will be taking a 4% decrease in benefit.  James Pethokoukis puts these figures into something much easier to understand by showing that $10,000 growing at 3% for 40 years would leave you with roughly $22,000 at retirement.  However that same $10,000 at 7% for 40 years would net you a total of $150,000.  Not only do you risk a loss of $128,000 of net return, but you must also remember the payout of the annuity.  Would you rather see a monthly payment based on $22K or $128K?  True, we are only assuming a $10K investment, but you can do the numbers to extrapolate.  Also, after spending your life, dedicating 5% of pay into this account, wouldn't you want the satisfaction of knowing that your savings could be willed to your family in the event of an early passing?  Not so with GRAs!!

In the end, we also have to look at the government's (any government's) ability to manage and dole out with respect to fiscal programs.  Social Security, bankrupt.  Medicare, bankrupt.  Guaranteed pensions, backed with IOU's, but no money in the coffers to back the promises, forcing many states (California, New York, etc) to the brink of bankruptcy.  You seeing the same trend I am here???  The simple fact is that the government does nothing well.  They can't run a business (USPS), they can't guarantee the current retirement supplement (Social Security), and I don't trust them to be able to carry me thru my retirement years.  In addition, since these GRAs will be backed with Government Treasury Bonds, I'm not even sure they could guarantee the lowly 3% return they are promising.  Have any of you taken a look at the falling dollar in the world market?  As our current policies keep us going back to the loaning tree of the Chinese and other unfriendly countries, as our debt continues to rise at the rate of super fueled rocket, how can we possibly be satisfied with a "promise" that Treasury Bonds will even be worth the paper they are printed on?  Simple answer, we don't. 

Decide for yourself, are you willing to trust the fed with your hard earned dollar?  Are you willing to be forced by law to save into an account that will most likely not provide you with a return on your investment that will be in the black?  Do you have no concern that all of your savings will not go the betterment of your surviving family in the event of your death?   How about knowing that your savings will be used to fund the retirement of those who have not contributed as much as you? When will the fed want to open these accounts to non-tax paying illegal aliens as we've seen with Medicare, etc?  Rest assured, if allowed, this will not be the end of confiscation of private property.  First it was the water ways, now it's your personal savings.  Where will it end?

To burn or not to burn?

Before I start this rant. let me go on record stating that I think Pastor Terry Jones is an idiot.  Pastor Jones is the man who will be heading up a "Koran Burning" down in Gainesville, Florida on the eve of September 11th.  While I understand Pastor Jones's sentiment behind the burning, and even stand by his legal right to do so, I still think he is an idiot.  I do not think he is an idiot because of possible backlash by Islamic followers or the multitude of global protests, but because I believe he is doing this burning for no other reason than to gain his 15 minutes of fame in the public eye and he is going against the very principals of Christianity that he is supposed to foster. 

That being said, I wish to speak to a key number of consequences that have come from his decision to perform this burning.  At the top of the list, comes the statement by General Petraeus stating that doing so will put the lives of soldiers in danger.  First, let me state that everyone who knows me knows that I have nothing but the utmost love and respect for those in uniform who protect the American ideal, however, in this case, General Petraeus should have stayed silent.  The General is a just that, a general in the US military.  The subject of burning a religious text as protest is a political matter, of which, a general in the US Military has no business intervening.  Had Gen. Petraeus given his "personal opinion" out of uniform, and clarified that such statement was not one of the US Military, it would have been one thing, but he did not, thus violating the very principal of a citizen military.  Just as President Obama, as a national figure, consistently, and unjustifiably, inserts himself into local matters, the General has inserted himself into a political matter of which he has no jurisdiction.  In addition, need I remind the General that our soldiers are, and have been, in the line of danger for sometime. Regardless of President Obama's misguided declaration that combat operations in Iraq are over, we still have 50,000 troops actively engaged, and in the line of fire, daily in Iraq, not to mention Afghanistan.  Those soldiers fight for the rights granted us by the US Constitution, even if they are things that they may not personally agree with.  I know not one soldier who would agree with the burning of the American Flag, but every day they lace up their boots and put themselves in harm's way to maintain the right to do so.

Second is all the media claims of Islamic backlash, the coverage of all the "global protests", and the Ground Zero Mosque Imam's thinly veiled threat that if this burning is not stopped, then the "radicals" of Islam will take this as an attack against Islam and that we will suffer the consequences.  To start, the media is just as culpable in this as Pastor Terry Jones.  They gave significance to his protest, choosing to make it a national and global issue.  Was this done to take the eye off of our current administration's failed policies, to distract the people from the mid-term elections, or to further foster their claims that "islamophobia" has gripped the country?  I don't know, but it appears that they succeeded in all three. 

Since when do we let outside entities dictate how America will react?  Since when do American's lay down in fear and abide to thugs due to risk of violence?  From Hillary Clinton, to Gen. Petraeus, to Angelina Jolie, everyone is stating that this should be stopped or violence will ensue.  Take a look around you!  Pick up any newspaper within the last 20 years and you will see that we've been in the grip of Islam violence for some time.  I do agree with Pastor Jones in that we cannot be afraid of Islam anymore.  We cannot allow our policies, our lives, or our rights to be violated by the Islamic faith.  If we allow Islam to sway our decisions, then we have already lost our freedom.  If we make decisions based on the "possibility" of Islamic violence, then might as well lay down and submit ourselves to Sharia law, as the terrorists have won and the American way is gone.  We must remember that Islam is a religion of violence and fear.  If not this Koran burning, it would be some other perceived atrocity that they would rioting and threatening us over.  Where does is end?  Do we then submit our laws to the same fear?  Will we allow a man who beats his wife to go free because Islamists say it is his right?  Must we demand that rape victims be publicly and violently punished for their misfortune?   Must prop 8 in California be turned to law because Muslim's will distribute violence upon us for allowing homosexuals to have marriage rights?  At what point do we say enough is enough?  At what point does it become too late to make that assertion?

On the subject of "islamophobia" as progressed by the media; first, we must agree on the definition of "Islamophobia".  A phobia, as defined by Merriam Webster is "an exaggerated, usually inexplicable and illogical, fear of a particular object, class of objects, or situation".   There is nothing illogical or inexplicable about opposing the building of a monument to the very faith that murdered over 3000 of our American brothers and sisters.  Would it be illogical to demand that a rapists face be tattooed on the body of his victim?  It is not illogical to claim that Islam is a religion of violence when history has shown over and over again the numerous jihad's that have resulted in the murder, rape, and torture of non-believers.  It is not a phobia, but a realistic look at Islam for what it is. 

But what about the "moderate" Muslims?  While I agree that there are those within the faith that wish to modernize it, there has to be an understanding that it will never happen.  In order for Muslims to "modernize" and transform Islam into  a "religion of peace" then those moderates would have to decry their own prophet and religious text to do so.  Mohammed is not a figure of peace and virtue, but instead was a murderous, war-mongering, child marriage practioner, guilty of rape, pillage, and plunder during his lifelong quest to control and subjugate infidels to his faith.  It is also believed that the Koran is a direct dictation of speech between Mohammed and Allah to be followed implicitly and without question.  In order for revisionists to change the Muslim faith, they would have to separate themselves from the very core of their belief.  Since the faith itself punishes any outspoken person against the religion with death, we can expect the vast majority of Muslims to remain silent.  Just as not all Germans were Nazis, they stayed silent as the "radicals" overtook the culture.  We are seeing the same thing today with Islam, but rather just a matter of national pride, we are talking about religious indoctrination which is much further ingrained in the psyche, thus much harder to defend against.

While I believe Pastor Jones to be an idiot for his "protest", the media has now made this a no-win situation for America.  Due to their proliferation of this non-subject, we are now in the global [Islamic] eye.  If he does not go thru with his burning, then we once again allowed ourselves to bend to the threat of Islam.  If he does go thru with it, then we allowed ourselves to "declare war on Islam", and give them an irrational justification for the actions that they've been perpetrating for centuries.  Either way, Islam has gotten what it wants, rule over American freedom or an excuse for their violence.  While I disagree with Pastor Jones's actions, I will have to take the side of standing up against the Islamic threat.  This will get me labeled as a "racist", but they've been calling me that for 2 years now, so what the hell?  This is a situation that was fueled by a sensational liberal media and by politicians who involve themselves in affairs that will advance their political clout and agenda.  It has to stop somewhere, so to Pastor Jones:  I will curse you for your ignorance, but I stand by you in light of the fire you have started.