Gov Considering Seizing Private Pension Funds

[thraashman]

Is this another one of those pointless outrages that makes the GOP and their supporters look like asses?

Well, technically anything that is a pointless outrage that makes the GOP look like asses can just be called "reality".

 

[werepossum]

They aren't dumb enough to just come out and seize your 401K but they can rather easily get a large portion of the populace to "voluntarily" hand them over by using the right incentives at the right time.

Just off the top of my head:

Market crashes (nothing doomsday, lets call it 50%), people still haven't recovered from the last crash so now they are really down.

The .gov steps in to "help" and offers a program that gives you pre-crash value of your 401K with the catch being you have to move all of the money into their new "retirement plan" that has a guaranteed rate of return (basically instead of buying stock your buying .gov debt).

Throw in a few taxes to hurt 401Ks and a few tax breaks for the new .gov retirement plan and voila a whole slew of new money for the Federal Government to spend.

Social engineering, it is flat out retarded for them to "force" people to do something that will likely result in the pitchforks coming out when they can simply offer enough incentives to get you to willingly hand it over especially if the people lose even more faith in the market due to another crash and the bullshit computers fucking over people.

I well remember that. It's something that progressives have been discussing for decades and bears a close watch, but it was strongest in the heart of the crash. It evidently polled badly though. If it couldn't get majority Democrat support when the DOW was below 7,000 it would take a hell of a crisis to get it. I'm not saying it can't happen, especially with the iron fist inside a velvet glove (mandates plus incentives) but it just doesn't seem too likely - although it is amusing knowing that the vast majority of those here saying it could never happen and is just GOP fear mongering would be four square in favor of it were the Democrats to act on it.

 

[IndyColtsFan]

Thats Californias problem not the national taxpayer.

Want to take bets on how soon it becomes the "national taxpayer's" problem?

 

[Thump553]

Reading this thread I don't know which freaks me out more, the blatant financial/economic igorance displayed by many posters in this thread, or the blatant promotion of political doctrine over common sense. The closest analogy I can think off is the old political officer on USSR ships, although this time the doctrine purity experts are coming from the far right. They make as much sense, anyway.

Some basic, irrefutable facts completely glossed over in this thread:

1) Defined benefit plans are basically dinosaurs these days, representing only roughly 10% of employees-and nearly all of those are government workers or older workers grandfathered in.

2) Many defined benefit plans are in horrible economic shape. In the private sector this was often due to raiding plans to fund corporate takeovers in the 80's and 90's (before trust fund rules were tightened). In the public sector, it's due to political spinelessness-promising benefits to teachers, for example, without adequately funding the expense.

3) The feds have long had the authority to take over ailing defined benefit plans. However that authority is weak and needs improving-that is what the gist of this proposal is all about. Talk of the government snapping up your retirement plan ala Venezeula is pure paranoid fantasy. Geez.

 

[Jhhnn]

Want to take bets on how soon it becomes the "national taxpayer's" problem?

Well, California's public pensions aren't exactly the private pensions the OP was talking about, now are they?

What's wrong with America's pensions is that they've been used and abused as a way to keep people working for less when they had incentive to either strike or go elsewhere. The people at the top turn pension promises down the road into immediate profit for themselves, very large profits, and hit the door running. That's true wrt GM's over promised plan, or California's.

Another problem with it all is that market profits are increasingly channeled to nimble market insiders who sell short, something pensions have trouble doing- pensions necessarily take long positions in the market, take a heavy beating every time the market flips, only partially recover when the market goes up. Think of it as a pumping action... money flows in slowly, gets squeezed out quickly, and then refills, only to get pumped out again... wash, rinse, repeat until the reservoir, pension contributors, gets sucked dry... It's a financial milking machine.

Factor in decreasing pension plan membership created by outsourcing and offshoring to get a glimpse of the full effect...

Screw the working guy, the guy who shows up and does his job for years on end? Oh yeh- you betcha...

The notion that 401K's will serve people any better is folly. Yeh, sure, individuals have more "control", or at least the illusion of control, but very few have the time or the expertise to exercise that, and are still stuck in fundamentally long positions. Add some divide and conquer to high fund management fees... and there you are, living the bosses' new pension plan, the work 'til you die plan...