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Tuesday, September 7, 2010
Big Government Knows Best for Retirement Savings?
New legislation being proposed by Senators Jeff Bingaman and John Kerry could force as many as 60 million Americans to invest in government bonds via mandatory retirement accounts.
According to a recent report by World Net Daily's Jerome Corsi, the law would require "employers and employees to contribute into a retirement account for every employee and demand that a portion of that contribution go into a federal-government created annuity that would be funded by purchasing Treasury debt."
On the surface, it appears the nation's cash-strapped government wants to force Americans to lend money to the Treasury to keep up with is ever-widening funding obligations.
On September 14th and 15th, the Department of Labor will be holding joint hearings with the U.S. Department of Treasury to discuss "lifetime income options for retirement plans" that would be included in the plan.
The "options" that workers would be forced to contribute to are so broadly defined that the Department of Labor could force investment into just about anything. Included are "passbook savings, certificates of deposit, insurance contracts, mutual funds, United States savings bonds," and "similar classes of assets," including treasuries.
Such legislation could create some 60 million potential new Investment Retirement Accounts (IRAs), according Mark Gutrich, president of Denver -based ePlan Services. That would make the Department of Labor the largest pension administrator in the nation, as it would entail the de facto nationalization of IRAs.
Assuming an average annual income of $50,000, if just 1 percent was devoted to treasuries purchases, the bill would expand government's ability to borrow by about $30 billion every year, or $300 billion over ten years.
That may even be lowball estimate, especially should the sovereign debt crisis dramatically worsen in the U.S. If it does, the Department of Labor could arbitrarily expand retiree investments into treasuries by regulatory fiat.
But, even if workers were not forced to invest in treasuries to finance the burgeoning $13.442 trillion national debt, they would still nonetheless be coerced into government-mandated retirement accounts. This is similar to the individual mandate to purchase health insurance under ObamaCare.
Americans for Limited Government President Bill Wilson described it as a "'one size fits all' retirement account." Making matters worse, Wilson said it would "disproportionately impact younger and lower-income workers, who will now have less ability to save for new home purchases or pay off college expenses and debt, all of which occurs earlier in a worker's career."
"This is another attempt by government to tell individuals what they have to do with their own money, stripping them of the right to make their own personal investment and life decisions," Wilson added.
Wilson warned against mandatory government bond purchases. "By increasing the American people's stake in the government debt, the incentive will always be to expand the national debt to finance retirement benefits," he said.
That's because the way government pays off principal and interest owed on the national debt, and thus generates a return for investors, is by selling even more treasuries. This is known as "rolling over" the debt. So, in order to guarantee a return for the retirement savings accounts, the government would be forced to sell even more treasuries than the retirees bought in the first place.
So, if the 60 million workers earning on average $50,000 every year invested in newly issued 30-year treasuries every year for thirty years, there would be a net principal liability of $900 billion owed to the IRAs. At a hypothetical 4 percent yield, the government would have to sell another $1.980 trillion in debt on top of that to pay out in benefits to the retirees.
On its face, that could require increasing the debt by as much as $1.080 trillion.
All of which would make ever reducing or retiring the national debt next to impossible — the only way to do that is by slowing the rate of treasuries auctions. And by tying the fulfillment of pension obligations to an ever-expanding national debt, the government appears to have found a way to guarantee that the debt is never paid off.
Which may be exactly what the bureaucrats have in mind.
Robert Romano is the Senior Editor of Americans for Limited Government (ALG) News Bureau.
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Video of Obama Whining at Wisconsin Rally: "They Talk About Me Like a Dog"
As Jim Treacher said, "dogs are capable of learning."
But then, there is this flashback: Video of Obama: Black people are a 'MONGREL people'
Mongrel is a reference to mixed-breed, especially in dogs where the term 'mutt' is more often used. Ben Cunningham had this via Instapundit: "We don't have a President, we have a paranoid, petulant child.". And Ed Driscoll: "Something weird happens when presidencies go wrong." And the obligatory Jimmy Hendrix singing about being talked to like a dog:
Read the whole Instapundit thread for a lot more.
But then, there is this flashback: Video of Obama: Black people are a 'MONGREL people'
Mongrel is a reference to mixed-breed, especially in dogs where the term 'mutt' is more often used. Ben Cunningham had this via Instapundit: "We don't have a President, we have a paranoid, petulant child.". And Ed Driscoll: "Something weird happens when presidencies go wrong." And the obligatory Jimmy Hendrix singing about being talked to like a dog:
Read the whole Instapundit thread for a lot more.
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Robert Gibbs: Obama’s Latest $50 Billion Stimulus Is Not a $50 Billion Stimulus
For Pete's sake, Robert. Man up…
Robert Gibbs told reporters today that Obama's latest $50 billion stimulus is not a stimulus.
Uh-huh
Click on Photo for Video–
GIbbs to reporters:
"I do not think that this is anywhere near the level of what was enacted at the beginning of the administration."
Related… 55% of Americans oppose a second Obama stimulus. Only 31% on the far left think its a good idea.
http://gatewaypundit.firstthings.com/2010/09/robert-gibbs-obamas-latest-50-billion-stimulus-is-not-a-50-billion-stimulus/
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Video of Cynthia Tucker: Stimulus "Biggest Tax Cut In U.S. History"
Not only did she assert that the stimulus was the biggest tax cut in history (canned laughter), but also that Obama is causing whites to fear a "white minority." This is apparently what Obama's post-racial America looks like:
Note the look of concern and agreement on the faces of all the sycophantic suck-ups on the show. The nodding heads. Thin crinkled eyebrows. It's as if the burning bush was speaking to them. Earth to Tucker: Obama hasn't talked about tax cuts in the stimulus because they were virtually non-existent. His talking up the tax portion of the porkulus boondoggle would have been akin to the morbidly obese going on a diet by skipping the after dinner mint at an all you can eat buffet. It would have been laughable. Lastly, Charles Krathammer has something actually astute about Obama's new 6-year stimulus: "Even Lenin Had the Modesty to Stop at Five"
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Video of AFL-CIO President Trumka: Obama's Created More Jobs Than Bush In 8 Years--With A Surplus To
AFL-CIO President Richard Trumka does not live on this plain of existence. His plain of existence lies elsewhere, in a liberal Utopia that has been called ObamaLand - a place where spending money you don't have leads to economic prosperity and jobs growth to no end. Unfortunately, don't the same thing in the real world leads to increased unemployment and job losses. Even with the recession, Bush saw net positive job creating. Obama on the other hand has lost more than 4 million jobs, with more than 3 million lost since the stimulus boondoggle was signed into law. How does Trumka state with a straight face that Obama created any net jobs at all much less more than Bush? And that we have a surplus? Wha....????
Trumka's claim that the stimulus was too small because of Republican opposition, something Court Jester Joe Biden asserted before, is not true. Here's a piece of the original stimulus proposal:
That dive off the cliff isn't just a one-time thing though. Here's the projections for the next 10 years:
The above projections do not take into account either ObamaCare or cap-and-trade.This by the way does not absolve Bush for leaving a $400 billion deficit that I thought was unconscionable, but by comparison Bush looks like a fiscal conservative. Obama, in contrast, not only voted for the 2009 budget, but praised it afterwards. From NewsBusters:
Trumka is the same one that asserted a few months ago that there is no debt crisis. No really: Video of AFL-CIO President: "We Don't Have A Deficit Crisis"
This, by the way, is where Trumka lives:
Trumka's claim that the stimulus was too small because of Republican opposition, something Court Jester Joe Biden asserted before, is not true. Here's a piece of the original stimulus proposal:
A. Aggregate Jobs EffectsThe package was exactly what Obama wanted, and now Biden is making excuses for why it's not working, without explicitly coming out and saying it's not working. But pointing a finger at the GOP for for what he considers a shortcoming a year and half later pretty much says what we have been pointing out all along - the stimulus is a failure and a waste of money. Nothing is more damning than the actual results versus what Obama promised. We were told that the stimulus would create 3.5 million NEW jobs by this time, but almost 3 million have been lost instead. As Sen. Michael Bennet (D) said recently: Trillions in Debt, "NOTHING TO SHOW FOR IT". As for Obama's inheriting the deficit, I appear to need to remind everyone - again - that Obama 1) voted for as Senator or signed into law as President every single penny of the deficit he now says he inherited, and 2) the housing meltdown was due to policies that he helped put in place going all the way back to his community organizer days when he muscled banks to give loans to people that couldn't pay them back. For one, his own voting record:
Estimating the aggregate employment effects of the proposed American Recovery and Reinvestment Plan involves several steps. The first is to specify a prototypical package. We have assumed a package just slightly over the $775 billion currently under discussion. It includes a range of measures, all of which have been discussed publicly.
- Voted "yea" March 18, 2008 on the $3.1 trillion in fiscal outlays with a projected $400 billion budget deficit (only 2 Republicans voted "yea", and not one Republican in the House voted for it after the conference committee)
- Biden, Rahm Emmanuel and Hillary Clinton voted "yea" as well
- Voted "yea" October 1, 2008 for the $700 billion Troubled Assets Relief Program (TARP) along with Biden and Clinton
- Pushed through and signed into law the $787 billion stimulus bill boondoggle in February 2009
- Signed into law $410 billion of additional spending in the 2009 budget in March 2009
March 14 (2008)As I have mentioned before, Obama has done more deficit spending in just his first 421 days in office than Bush did in more than 4 years. The FY 2007 federal budget - the last one put together by Republicans - was $2.7 trillion. Since Pelosi and Reid took over the federal budget is at $3.8 trillion. The deficit is almost entirely comprised of new Democrat spending since 2007. And as bad as a $400 billion deficit sounds, it is absolutely puny compared to what has happened since Obama took office.
Obama Statement on the Senate's Passage of the FY 2009 Budget
Washington DC -- Sen. Obama today released a statement on the Senate's passage of the FY 2009 Federal Budget:
"In Illinois and throughout the country, Americans share common hopes and common struggles. They are worried about keeping their jobs and being able to pay record gas prices and stay ahead of their mortgages and credit card bills and still have enough left over to make ends meet. They want to know that they'll have health care when they get sick - not just for themselves, but for their children and elderly parents. They want to know that a quality education and a college degree are within reach for all Americans. They want to retire with security and dignity. And they want to know that our government is doing everything it can to keep our nation safe and secure.
"The budget passed by the Senate tonight makes significant progress in getting our nation's priorities back on track. After years of the Bush tax cuts for the wealthiest Americans, this year's budget helps restore fiscal responsibility in Washington, and provides tax relief for the middle class and low-income families who need help most. It includes an expansion in the Child Tax Credit that I have fought for and makes marriage penalty relief permanent. And it rejects the President's drastic cuts in important domestic programs.
"We need change in this country, and this budget is an important step in helping bring it about. I commend Chairman Conrad for his extraordinary leadership in moving this resolution forward and moving America's fiscal policies in the right direction."
Trumka is the same one that asserted a few months ago that there is no debt crisis. No really: Video of AFL-CIO President: "We Don't Have A Deficit Crisis"
This, by the way, is where Trumka lives:
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A Trillion Dollars & 19 Months Later… Obama Proposes Tax Cuts for Business
Gee… That only took 19 months and a trillion dollars.
Obama now wants tax cuts for business.
Hooray.
Obama is the worst jobs president since the Great Depression. The Obama-Pelosi economic plan resulted in a cumulative 7.5 million jobs deficit. By every objective measure the democrat's Trillion dollar stimulus bomb was a complete disaster.
Barack Obama and Nancy Pelosi tripled the national deficit last year by nearly a trillion dollars – something unheard of in our nation's history.
After an unheard of record deficit last year of $1.4 Trillion the economy is on track to experience a $1.3 Trillion deficit this year.
Instead of focusing on the economy the past two years the radicals in Washington beat up on business and rammed through an unpopular nationalized health care entitlement program.
After all of the failure Obama now wants tax cuts.
FOX News reported:
President Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to write off 100 percent of their new investment in plant and equipment through 2011, a plan that White House economists say would cut business taxes by nearly $200 billion over two years.
The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways. But unlike those two ideas, both familiar from Obama's 2008 campaign, the investment incentive would embrace a long-held wish by conservative economists that had never won support from either Republican or Democratic administrations.
"Temporary investment incentives like this can have big effects because they really pull investment forward," R. Glenn Hubbard, dean of the Columbia University School of Business and a former chairman of the Council of Economic Advisers under President George W. Bush. "This could have a big stimulative effect."
But the response Monday from business lobbyists hinted at uncertain political prospects for the idea: Many said a higher priority for their members remains extension of the Bush income-tax rates for higher earners that are set to expire at the end of 2010. Obama and many congressional Democrats want to let those breaks expire.
Administration officials hope businesses spooked by the faltering recovery but with investments already on the drawing board will rush to take advantage of the tax break. The tax would be retroactive to Sept. 8, the day it is announced, so businesses won't delay planned investments while waiting for congressional action.
This is what you call desperation.
http://gatewaypundit.firstthings.com/2010/09/a-trillion-dollars-19-months-later-obama-proposes-tax-cuts-for-business/
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