Government Lays Groundwork To Confiscate Your 401k and IRA

A friend emailed this article. If you have a 401k or IRA, you'd better read it!

by Mac Slavo
February 14, 2014

This morning Reuters obtained a leaked proposal disclosing that European Union officials are looking for new and innovative ways to fund their immense debt levels.

As noted by Zero Hedge, they’re no longer turning exclusively to central bankers to simply print more money as needed. Because last year’s bank bail-in forcing the confiscation of funds from average depositors in Cyprus worked so well, EU regulators and bankers have determined that they’ll use a similar method to fund their future endeavors.

In a nutshell, and in Reuters’ own words, “the savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says.”

The solution? “The Commission will ask the bloc’s insurance watchdog in the second half of this year for advice on a possible draft law “to mobilize more personal pension savings for long-term financing”, the document said.”

Mobilize, once again, is a more palatable word than, say, confiscate.

This is what happens when governments run out of money.

But if you think this is limited to just Europe, then consider the words of President Barack Obama in his recent State of the Union address.

For all intents and purposes, a similar groundwork is being laid right here in America.

They’ve already taken over the health care industry… why not nationalize our retirement savings while they’re at it?

This is basically the offer that the President of the United States floated last night.

And like an unctuously overgeled used car salesman, he actually pitched Americans on loaning their retirement savings to the US government with a straight face, guaranteeing “a decent return with no risk of losing what you put in. . .”

This is his new “MyRA” program. And the aim is simple– dupe unwitting Americans to plow their retirement savings into the US government’s shrinking coffers.

We’ve been talking about this for years. I have personally written since 2009 that the US government would one day push US citizens into the ‘safety and security’ of US Treasuries.

Back in 2009, almost everyone else thought I was nuts for even suggesting something so sacrilegious about the US government and financial system.

But the day has arrived. And POTUS stated almost VERBATIM what I have been writing for years.

The government is flat broke. Even by their own assessment, the US government’s “net worth” is NEGATIVE 16 trillion. That’s as of the end of 2012 (the 2013 numbers aren’t out yet). But the trend is actually worsening.

In 2009, the government’s net worth was negative $11.45 trillion. By 2010, it had dropped to minus $13.47 trillion. By 2011, minus $14.78 trillion. And by 2012, minus $16.1 trillion.

Here’s the thing: according to the IRS, there is well over $5 trillion in US individual retirement accounts. For a government as bankrupt as Uncle Sam is, $5 trillion is irresistible.

They need that money. They need YOUR money. And this MyRA program is the critical first step to corralling your hard earned retirement funds.

At our event here in Chile last year, Jim Rogers nailed this right on the head when he and Ron Paul told our audience that the government would try to take your retirement funds: I don’t know how much more clear I can be: this is happening. This is exactly what bankrupt governments do. And it’s time to give serious, serious consideration to shipping your retirement funds overseas before they take yours.

As former Congressman Ron Paul notes, the government will stop at nothing.

“They’ll use force and they’ll use intimidation and they’ll use guns, because you can’t challenge the State and you can’t challenge the State’s so-called right to control the money,” warns Paul. “It’s already indicated that they will confiscate funds and they will [confiscate] pension funds.”

This didn’t just happen over night. The move to make this reality has been going on for quite some time. The first time it was mentioned publicly in any official capacity was at a 2010 Congressional hearing: Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.

Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee heard from hand-picked witnesses advocating the infamous “Guaranteed Retirement Account” (GRA) authored by Theresa Guilarducci.

In a nutshell, under the GRA system government would seize private 401(k) accounts, setting up an additional 5% mandatory payroll tax to dole out a “fair” pension to everyone using that confiscated money coupled with the mandated contributions. This would, of course, be a sister government ponzi scheme working in tandem with Social Security, the primary purpose being to give big government politicians additional taxpayer funds to raid to pay for their out-of-control spending.

You’d think that such an idea would be immediately dismissed by the American public, but it has only gained steam since, as evidenced by a 2012 hearing held at the U.S. Labor Department: The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.

“This hearing was set up to explore why Americans are not saving as much for their retirement as they could,” explains National Seniors Council National Director Robert Crone, “However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up.”

…Such “reforms” would effectively end private retirement accounts in America, Crone warns.

A few years ago the government of the United States of America nationalized nearly 1/6th of our economy when they took over the health care system with forced mandates. In the process they essentially took control of $1.6 trillion in yearly industry revenues.

But that’s nothing compared to private savings. The total amount of retirement assets in America, including 401k, IRA and savings accounts is around $21 trillion. With our national debt coincidentally approaching the same, the government sees big money and potentially a way out of our country’s fiscal disaster.

This will start voluntarily with the MyRA and other state-sponsored programs. But when not enough Americans are making it their patriotic duty to turn over their funds to their government, they’ll mandate compliance with the stroke of a pen just as they did with thePatient Affordable Care Act.

And just like Obamacare it will be enforced by the barrel of a gun. Failure to comply will mean confiscation without recourse and prison time.

All they need now is a trigger.

And that trigger will likely come in the form of another stock market collapse. Wipe out Americans’ in a stock market crash and scare the heck out of them with more economic bad news, and millions of our countrymen will be all too willing to hand it over to Uncle Sam. Panic is a powerful motivator and what better way to get people on board than by threatening them with squalor and destitution in their old age if they don’t go along with it?

Government officials have been actively working to make this a reality for years. The Europeans are doing the same.

You can put your head in the sand or cover your ears and pretend this is not happening, but that won’t change the outcome.

They will take everything they can get their hands on.

Problem Solved!

With the economy the way it is, it isn't easy getting loans these days. That is complicated by the fact that I already have an outstanding loan. So, with a property tax bill due by September 1 and my attorney's bill due, I had to think of something.

Fortunately, I have both a 401k account and an IRA account to draw upon. Which I did. Problem solved! I'll just pay it back when the crop check comes in.

This also allows me to leave, untouched, what savings accounts my mom left me for the time being.

Now I can relax again.

Democrats Plan To Steal Your 401k

The Democrat Party is plotting to take your 401k retirement plan, nationalize it and have the Social Security Administration administrate it.

US News.com reports:

I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts (Efharisto, Fausta's Blog). Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.

House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."

The Democrats are complaining that the tax-deferred income people are depositing into their 401k retirement accounts is costing the government revenue. They are scheming to enact this plan to take control of your retirement savings.

We know how well the social security deductions (from our paychecks) is currently being used to pay current retirees with the balance going into the general fund to pay for current government programs. Do we want them to take our 401k monies and do the same?

The D.C Examiner has this opinion piece by Bret Jacobsen:

A mailer went out this week 500,000 retirees in swing states this week from the AFL-CIO warning that John McCain wants to “privatize” Social Security. Mysteriously absent will be any notice that organized labor and congressional Democrats held a hearing yesterday in San Francisco that could be a quiet step toward socializing your 401(k).

The hearing was pitched as a way to “ensure retirement security” in the face of financial crisis. But that’s not accurate. The event was part of a poorly disguised power-grab, exploiting panic over financial turmoil in the housing and credit markets.

All working Americans should be concerned about retirement proceedings under the watch of House Education and Labor Committee chairman Rep. George Miller, D-CA. According to recent reports, Miller and other Democrats are considering portions of a plan that would take away nearly $80 billion in tax incentives for 401(k) plans.

It’s possible the policy would force workers to pay an additional five percent of their paychecks into government-controlled accounts, from which they would earn only a three percent return. In other words, proponents of private Social Security accounts would see their grandest dreams, and worst nightmares, realized in one fell swoop.

Democratic leaders and their labor allies can kill two birds with one stone. First, they will effectively neuter private, defined-contribution plans, which have replaced union-controlled defined-benefit pension plans for millions of Americans (after all, why would workers lock money away if there were no tax incentive?). At the same time, they can force those resources into a bigger, bloated government bureaucracy.

While some may be surprised at the brazen attack on a pillar of retirement security, it is merely the natural extension of organized labor’s world vision, which says we are better off putting resources and decisions anywhere but in the domain of markets and individuals. It is simple socialism: Democrats hope to push more retirement resources under the purview of the government, and away from the people who actually created the wealth.

If Democrats indeed move ahead with the plan they are pondering, the bulk of a person’s nest egg could soon be scrambled in a government program earning less-than-market returns. Without this fresh injection of employees’ paychecks, Social Security solvency still remains in doubt and hardly seems a superior option over equity markets.

Meanwhile, if union officials have their way, more employees will be driven back to old-style defined-benefit pensions that have been crippling America’s employers and sometimes short-changing America’s employees.

Union pension funds covering private sector employees already controlled more than $800 billion in retirement assets as of 2005, according to figures compiled by Heritage Foundation scholar James Sherk.

The results are not always impressive. UPS, for one, was forced this year to escape the Teamsters’ “Central States” plan at great cost before just so it wouldn’t be on the hook for obligations of other employers that may be failing.

This is high-stakes, high-cynicism politics at its worst. Not only are politicians exploiting fears driven by a once-in-a-lifetime market meltdown, they are repeating the very same thinking that led to the current housing crisis. As Ronald Reagan said, “Government is not a solution to our problem, government is the problem.”

Yet, it is very likely that following yesterday’s San Francisco hearing, Democrats will push a “solution” that is about bigger government, bigger unions, and smaller economic growth. They may well succeed in enlarging the social safety net. But it will be just big enough to strangle our economy.

This is what we can expect if the Democrats increase their numbers in Congress to filibuster-proof levels with Barack Obama in the White House. This is definitely not change we need!

Rush Limbaugh discusses Democrats' 401k Nationalization Plan

UPDATE: Author of 401k seizure plan says intent to "spread the wealth."