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Should Government Take Over Your 401(k)? Part 2!

10 November 2008 4 Comments

I have had both a huge response to my initial article on government potentially taking over 401(k) plans and a great deal of fascinating comments and feedback. As such, I decided to write a part 2 to this interesting and controversial idea.

Before I begin, I hope to encourage you to put aside your political party connections before making a judgement on this content and to seriously approach this issue objectively. It is too important not too. It is not a matter of Republicans vs Democrats or vice versa; it is a matter of free will and personal responsibility. These are two virtues that we must continue to push to the forefront of all issues in our country and in our world. With that said, let’s look at the possibility of 401(k) changes being pushed by various individuals in our government.

First, who are the individuals who are pushing this? They are George Miller, Representative from California and Jim McDermott, Representative from Washington. One of Miller’s most interesting quotes is about the transition from pensions and other retirement plans to 401(k)’s and IRAs. He said, “Everyone wiped their hands of any obligation for retirement, and the burden shifted from the employer to the employee, and the risk is shifted from the employer to the employee.”

By burden, he means of course, responsibility. I would assume, by this quote, he means it is unreasonable to expect individuals to be responsible for their own retirement. Let’s put this concept aside for now because one major concept he fails to address is the huge burden pensions and other entitlement programs puts on companies. Look no further than the big auto companies for some shining examples. How many times will we have to bail out Chrysler or GM?

In the global economy, to be competitive, companies cannot be held down with the huge entitlements of the past, supporting the retirements of every individual that has ever worked for the company. In a perfect world, yes, this would be great. But we live in a competitive world, and our country needs competitive, healthy companies. Competitive and healthy companies provide jobs for our citizens which is the foundation of our economy. Are GM, Ford and Chrysler creating jobs? No, they are cutting jobs.

Now, let’s get back to the personal responsibility argument. Miller does not want individuals to be “burdened” and would rather the government provide more retirement plans for individuals. Does he forget that tax payers are burdened with government spending, including retirement plans. Does Miller believe that we are completely incapable of taking care of ourselves so that we must give money to him and then have him give it back to us at regular intervals throughout our later years? Either that or he simply wants government to have more power over us. Neither is an acceptable reason.

Sneaky and Slippery

One of the comments on my first article was basically: “If you think this is going to happen, you’re crazy.” The reason things like this are capable of happening is because of how they are presented. No government representative is going to say “we want to take over 401(k) plans”. They will present it as an attractive option such as buying up your 401(k) plan at a previous (and higher) balance before stock values went lower. Slowly, but surely, they will take over more of people’s retirement funding and savings.

Whether this happens soon or not, there are individuals that want this to happen. I encourage you to be on guard for anything which could lead to such a policy. Government should not continue to expand until they control every aspect of our lives. Stand with me to stand against this horrendous policy. Vote against anybody who supports ending 401(k) tax breaks, not because of simply ending the tax break (which is bad), but because of what it can lead to. Stand for individual freedom and responsibility.

Fun Comments From Part 1

“Heeellll no! How can this question even seriously be asked?! Are we that pathetic that the government has to take control of this as well? What are all the companies supposed to do that use this money as capital? I have not heard a worse idea in a long time.”

“Hey CB I will let you in a secret to keep your kids from starving. Get a job. Why should we penalize people for making more money. Flat tax all around in my opinion. I also do not want some greedy lazy person all over my 401K. I want to be able to buy my grandkids things and have a nice retirement home. Not pay my neighbor’s retirement. If I retire with 4 million dollars in my 401k and the government wants to tax it thats fine but no more. And do not raise capital gains tax either. It is high enough. If people quit abusing the system it would not be so bad. Know your limits. Don’t have 3 kids when you know you cannot afford it. Obama will turn this country it a socialistc version of Russia by the time he is done with it.”

Agree or Disagree? Add your comment, join the discussion!

4 Comments »

  • Veteran said:

    This is absolutely ridiculous — what is the point of me saving any of my money if the Government is going to come in and take it over — I might as well spend every penny I earn — I have a rich uncle – Why should my hard work and dedication get distributed across the board.

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