January 19, 2010
Next to Be Nationalized: 401Ks
Posted by Dave Blount at January 19, 2010 9:54 AM
The next target in Comrade Obama's blitzkrieg against the economic freedom that made America wealthy is our retirement accounts:
President Barack Obama is calling for establishing automatic workplace pensions and expanding unemployment insurance as part of his spending plan for the U.S. Labor Department next fiscal year. We liken this to an "Obama 401k Plan."
The budget "lays the groundwork for future establishment of a system of automatic workplace pensions, to operate alongside Social Security, that is expected to dramatically increase" retirement and personal savings, Obama's Office of Management and Budget said in its outline, without giving details on the costs.
Sure it will.
The troubling thing to me is that the government would pay a 3% fixed interest rate on the accounts as opposed to the diverse mutual fund offerings in a traditional 401k plan. In effect, this would create a "Social Security" type structure to your retirement, IRA, or 401k.
The lack of equity options in your 401k plan would dramatically affect the possible returns, especially over an extended period of time. Just think, the average equity return over the stock market's history is somewhere between 9-11%. Do you think that you would be happy with 3%?
Just think of it as a vast expansion of the Social Security system that is already staggering toward bankruptcy — and another chance for Obama and friends to advance "social justice" by making us poor and dependent on what the government decides to let us have.
On a tip from Nancz.