Two instances recently where the government, in the form of Congress, is casting about, desperately searching for ever-more sources of money to latch on to, in spite of (or perhabs BECAUSE of) its demonstrated inability to account for what it already spends. As the first of these pieces notes, this is in keeping with “Sutton’s Law” – interesting that one of the best comparisons to make of Congress is with a bank robber.
Willie Sutton Goes to Harvard
By George F. Will
Washington is having a Willie Sutton Moment. Such moments occur when government, finding its revenue insufficient for its agenda, glimpses some money it does not control but would like to.
Sen. Charles Grassley (R-Iowa) and Rep. Peter Welch (D-Vt.) recently convened a discussion of how colleges and universities should be spending their endowments. Grassley, who says more than 135 institutions each have endowments of more than $500 million, says perhaps they should be required to spend 5 percent of those endowments each year. Welch has introduced legislation to require that percentage to be spent to reduce tuition and other student expenses.
This government reach for control of private resources comes even though last year colleges and universities spent, on average, 4.6 percent of their endowments. Furthermore, most endowments are too small to be a significant source of captured money.
…but why should that last detail matter to the Donk legislooters? A few billion here, a few billion there…eventually it starts to add up!
The next one is even worse, because in THIS patently shameless rip-off scheme, the —(insert favorite epithetic description here)— Donks are taking aim at INDIVIDUAL’S 401K and IRA accounts. Why? Again, the answer would seem to be…that’s where the money is, and besides, it’s a nifty way to move ever onward in the left-Lib’s on-going effort to bring about a New Socialist Utopia by redistributing our wealth…such as it is. (Hey – it’s THEIR wording, not mine!)
Dems Target Private Retirement Accounts
Not only do the Social Democrats (Donks) oppose the barest hint of privatising Social Security, they want to force the private means of people to plan for and provide for their own retirement away, and roll it into a Big Government Fund under the benign management of that acme of bureaucratic efficiency – the Social Security Administration! (gag! retch! choke!)
Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration. Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.
The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 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 workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.
The logic – or lack of it at work here is stunning:
Rep. George Miller, D-Calif., chairman of the House Committee on Education and Labor, in prepared remarks for the hearing on “The Impact of the Financial Crisis on Workers’ Retirement Security,†blamed Wall Street for the financial crisis and said his committee will “strengthen and protect Americans’ 401(k)s, pensions, and other retirement plans†and the “Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.â€
In other words, they are looking to protect 401(k)’s, pensions, and IRA’s by TAKING THEM AWAY FROM INDIVIDUALS AND PLACING THEM INTO A NEW GOVERNMENT PROGRAM!!!!! W.T.F.?????
Ghilarducci’s plan first appeared in a paper for the Economic Policy Institute: Agenda for Shared Prosperity on Nov. 20, 2007, in which she said GRAs will rescue the flawed American retirement income system (www.sharedprosperity.org/bp204/bp204.pdf). The current retirement system, Ghilarducci said, “exacerbates income and wealth inequalities†because tax breaks for voluntary retirement accounts are “skewed to the wealthy because it is easier for them to save, and because they receive bigger tax breaks when they do.â€
Lauding GRAs as a way to effectively increase retirement savings, Ghilarducci wrote that savings incentives are unequal for rich and poor families because tax deferrals “provide a much larger ‘carrot’ to wealthy families than to middle-class families — and none whatsoever for families too poor to owe taxes.â€
How unfair is this? People who don’t pay taxes can’t get a ttax deferral! It’s a cruel system that Social Justice demands reform of…at least according to this Donk moonbat.
GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.†In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants.
In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.â€
All workers would have 5 percent of their annual pay deducted from their paychecks and deposited to the GRA. They would still be paying Social Security and Medicare taxes, as would the employers. The GRA contribution would be shared equally by the worker and the employee. Employers no longer would be able to write off their contributions. Any capital gains would be taxable year-on-year.
Analysts point to another disturbing part of the plan. With a GRA, workers could bequeath only half of their account balances to their heirs, unlike full balances from existing 401(k) and IRA accounts. For workers who die after retiring, they could bequeath just their own contributions plus the interest but minus any benefits received and minus the employer contributions.
Has anyone done such a thing before…yes, there IS a very recent historical precedent:
On Oct. 22, The Wall Street Journal reported that the Argentinean government had seized all private pension and retirement accounts to fund government programs and to address a ballooning deficit. Fearing an economic collapse, foreign investors quickly pulled out, forcing the Argentinean stock market to shut down several times.
…and discouragingly, they apparently didn’t learn anything after a previous bout of fiscal piracy that didn’t work out well either:
More than 10 years ago, nationalization of private savings sent Argentina’s economy into a long-term downward spiral.
The spirit of Marx is alive and well in Washington, D.C.
The majority of witness testimony during recent hearings before the House Committee on Education and Labor showed that congressional Democrats intend to address income and wealth inequality through redistribution.
The piece goes on to quote a number of cases where the testimony runs unequivocally in the direction of income redistribution programs, including pronouncements (on video) to that effect from the now President-Elect, B.O. himself.
May God have mercy on the United States…because the Democrats sure won’t!
F.E.T.E.
 Ben Bernanke and Christopher Cox of the SEC