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.
2 comments:
Let me start by submitting just a few lines from one of my favorite movies, Office Space:
Michael Bolton: That's the worst idea I've ever heard in my life, Tom.
Samir: Yes, this is horrible, this idea.
I agree with you on just about every account:
1. I have not seen this in the news anywhere else.
2. The government, particularly one political party that I will not mention (but their name sounds a lot like bureaucrats), doesn't think that people are smart enough to take care of themselves. I think they watch too many episodes of the tv show "Cops" and assume that's what we're all like.
3. It sounds better than the current Social Security program, but no politician would dare to do anything to the current system in fear of losing votes.
Good post.
Big Doofus: Thanks for the affirmation. I have a new post up with a little bit of an update, in case you're interested.
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