Is Congress to Nationalize Your 401k's?

Is Congress going to nationalize your 401k retirement fund? It sure looks that way if a report in Investor's Business Daily is correct. Democrats in Congress last fall held hearing on just that proposal . House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee are the Congressional authors of a proposed bill that will do just that.


What they are proposing is to redirect IRA and 401k holdings into US Treasury bonds...since those bonds are no longer selling as rapidly as they once did on the international bond market. This new market will be a new system to which ALL workers will be obligated to contribute 5% of their earnings into accounts that will then purchase Treasury bonds...In other words, Congress will mandate that you buy bonds from the government to fund the present deficit.

In those hearings, that weren't publicized at the time, a proposal by Teresa Ghilarducci, a professor of the New School for Social Research in New York would be to give all workers "a $600 annual inflation-adjusted subsidy from the U.S. government". Then, the benevolent government would in return for require those same workers "to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration."

The model for this concept is taken from the economic power house, Argentina, who in 2008, nationalized all priviate retirement investment accounts. The socialist government did this after the country's bond rating had been reduced again, just as the US bond rating is now under review by the World Bank. That extra-governmental organization is proposing to reduce the US bond rating from AAA to AA, which would greatly increase the cost of floating bond issues for the United States.

This is yet another reason why the US Congress's popularity rating is so low...much of what is considered "business as usual" is conducted behind closed doors. That business as usual attitude will end up bankrupting this country