I don’t have a 401(k) but I have an IRA and if it lost half it’s value it would amount to only a couple thousand bucks. I’ve drained my retirement investments down over the past four years or so in order to keep my mortgage paid and the kids fed.
For the past week or so I’ve asked each acquaintance I’ve encountered how much money they’ve lost in the stock market with their 401(k). What I found out is that other than the professional people, the vast majority don’t have money in the stock market, or anywhere else. They have property tax bills they can’t pay, but not 401(k)s. But the headlines scream, “Two trillion dollars lost in retirement plans in last 15 months.” I’m sure you’ve heard it or read it at least once in the past few days.
Of course after any catastrophic event the government in general and liberals in particular never miss an opportunity to seize more control of whatever they can, always making things worse. Seems many Democrats of the socialist bent, which is to say most of them, have long been unhappy with the whole concept of the individually controlled 401(k) plans and have longed to be rid of them. House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, were mentioned in the article.
Teresa Ghilarducci, professor of economic policy analysis at The New School for Social Research in New York, which I have never heard of, testified before Miller’s committee, outlining how the government can better serve the people.
All workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation.
If someone came up on the street and explained something like that to me I would immediately suspect a scam where I give you several thousands of dollars in return for $600 and a promise of something better far in the future. At the very least it sounds like a 5% raise in social security taxes. I wonder long a 5% SS tax increase would stave off the bankruptcy of the failed Social Security program.
Ms. Ghilarducci also said:
“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered”
What do you say to a comment like that? Ms. Ghilarducci must think very highly of herself. Only a socialist/communist could point to the failed Social Security program for the model of how to make something better.