How The Obama Administration Plans to Screw With Your 401k

It wasn’t that long ago I posted this on the Democrats’ plans to remove the 401k tax breaks. It’s the whole personal responsibility thing they don’t like. If you care for yourself, then how can they scare or bribe you.

So, a new plan of attack is being formed.

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.

Annuities generally guarantee income until the retiree’s death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner , legislative counsel for AARP, said in an interview.

Pajamas Media author Will Collier answers the nagging question: why annunities:

As noted later in the article, “Seven in 10 U.S. households would object to a requirement that retirees convert part of their savings into annuities,” and the “why” of that opinion isn’t that hard to figure out: they’re a bad deal for everybody except the guys selling them. Consumer gurus like Clark Howard have been warning people away from high-commission “guaranteed” annuities for years. I bet everyone reading this knows of somebody who’s been ripped off by an annuity salesman.

But now … now the government would be the annuity salesman – except that if the administration gets its wish, there won’t be any “selling,” you’ll just be forced to take the money you’ve earned and “convert” it to a construct that they’ll allow you to “invest” in. No more of this willy-nilly mutual fund nonsense for you plebeians; we’ll tell you how you’re going to pay for things, so hand over the cash – it’s your patriotic duty!

It would be plenty bad enough if the “guaranteed” government annuities were limited to bailed-out insurers like AIG. But Karl Denninger of The Market Ticker took a deeper look and found an even scarier outcome. Denninger believes this is really a scheme to prop up the market for Treasury bonds by forcing citizens to “invest” in them.

As Denninger points out, “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!”

The Intergenerational Ponzi Scheme is starting to unravel, and just like all the other scam artists of the past, a new scam has to be created.

These types of moves will not help them in the next election. As I noted, there is a huge percentage of Americans who have 401ks. You go messing with them, and you are inviting a Republican majority.

But, don’t let that stop you. Far be it from me to keep you from imploding.