I'm not going to try to do any extended commentary on it, because by the end, I'd be so frothing at the mouth that I would most definitely not be Coherent.
But as I understand this story, various high-ranking House Democrats are floating a proposal that would:
- Eliminate the tax incentives associated with the 401(k) plans.
- "[Redirect] those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute."
- Provide some kind of federal subsidy of $600 per year per worker (the funds for which would be raised... how? hmmm?)
- Require that all workers contribute at least 5% of their income into a "guaranteed retirement account" administered by the Social Security Administration...
- ...Which would return a "guaranteed" 3% after inflation.
Sounds like they think that you and I are idiots, incapable of making decisions for our own futures, so they're plotting to take away control over our own retirement accounts, funded with our own money--taken from our own paychecks--and replace them with something that will provide a guaranteed lousy return. Am I getting this straight?
The only thing this system has in its favor--and it's not much--is that it's a less terribly designed system than the existing Social Security. If this system were being proposed to replace the existing Social Security--while not touching our 401(k) accounts--I might see a glimmer of something not to hate here.
As it is, if I didn't know better, I would suspect the authors of this abomination were trying to lose the upcoming election. And I suspect if this news gets wide enough distribution, they just might.