OK, I admit I'm a couple weeks behind on this issue but I just heard it on Rush today.
So the latest way the Democrats have dreamed up to stick their hands into my pocket and take my money is through my 401(k). Apparently they're looking to kill the 401(k) incentives and instead have you transfer your savings into government-created "guaranteed retirement accounts" for every worker. Why? Because they think people aren't taking enough advantage of the 401(k) system:
Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."
Sounds like the Obamanation is following the lead of Argentina who just seized all of their citizens private retirement funds. But what facts are they missing?
The stagnation of investment into 401(k)s doesn't mean people aren't investing in them, the rate of investment is just not increasing.
Their "wisdom" does not take into considerations the current investments will grow (yes I admit that growth is a bit negative lately but we all know 401(k)s are for long term growth and overall a great investment).
It doesn't take into account that many companies (like mine) offer a matching program where they will match a certain percentage of your investment. That means most people get 50% ROI (or more) right off the bat.
So what are they looking to replace this system of personal savings responsibility with? You guessed it....more government, give-aways, and mediocrity:
The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return.
Basically that means if you invested $10,000 into the governments system, in 40 years you'd have $22,000. If you took the same $10,000 and invested into the stock market (assuming it's historic returns) in 40 years you'd have $150,000.
Obviously this doesn't make sense to me. But neither does Obama's plan to retreat from Iraq as a means to save money for his new give-aways.