Pirates on the Veranda
Feds announce plans to nationalize IRAs/401Ks
by Brian Wright (with ref. to Patrick Heller)

When Pat's column in CoinUpdate came over the email, I glanced quickly then did a double take. What? You can't be serious? We all know the federal government has conducted a sustained campaign of indiscriminate plunder (and murder) over the years—from the Indian Wars, to the "income" tax, to the Federal Reserve, to the 9/11 attacks[1], to the invasions of Iraq and Afghanistan—and you can make a case that leading Wall Street investment firms have built their fortunes substantially on the blood money derived from such organized aggression.

Which means that many of the institutional investors—the ones who gave us retirement accounts of varying flavors and colors—and their customers (millions of my peers who built IRA and 401K nest eggs) have participated in the government-allowed bonanza. [IRAs and 401Ks have built-in tax exemptions.] And, except for the Great Recession, most of them have 'done good.' Well, lo and behold, the hand that supposedly giveth may taketh away. From the column in Coin Update News:

Mighty bold steps for a one-eyed fat man...

On August 26, the US Department of Labor issued a news release.  It lists the agenda for the joint hearings being held with the Department of Treasury September 14-15, 2010 on what is euphemistically called “lifetime income options for retirement plans.”  The hearings are being conducted by the Labor Department’s Employee Benefits Security Administration.

... the unstated agenda of these hearings, as I understand it, is to push for the US government to eventually nationalize (confiscate) all assets in private Individual Retirement Accounts (IRAs) and 401K plans!

The US government is desperate to get its hands on private assets to help cover soaring budget deficits and debts, and this is simply the largest and easiest piggy bank that can be seized.  The Investment Company Institute estimates that at the end of 2008 that there were $3.613 trillion of assets in IRAs and $2.350 trillion of assets in 401K plans.

For more than the past ten years, I have warned readers that the US government was eventually going to go after private retirement accounts.  I considered that as the most important reason to avoid establishing precious metals IRAs.  Very few other writers (Ron Holland being one) have picked up on this issue as early as I did.  In fact, the mainstream media pretty much ignored the subject even after a House Committee held hearings on the issue in October 2008.

Obviously, an outright seizure of assets would meet stiff resistance from the public.  So the confiscation will never be described as such by government officials.  Expect to see terms such as “retirement income protection” thrown around.  It is highly likely that such a program would be implemented in steps to help overcome public opposition. The US government plan is to eventually take ownership of all assets in IRAs and 401K accounts and replace them with US government “Treasury Retirement Bonds...."

Among the steps that could be taken to accomplish total confiscation are to first make the conversion voluntary, then make it mandatory for only a portion of total assets.  The final step would be making it 100% mandatory for 100% of all assets.  One idea proposed in the October 2008 House Committee hearings (after trillions of dollars had already been lost in most assets categories) to help push this plan onto the public, was to allow the seized assets to be replaced with government bonds at a face value of a previous higher valuation date.  The idea was that a private citizen, who might have lost 20-50% of his retirement asset value, would be much more willing to accept an inferior retirement asset if doing so allowed them to recoup the losses...

[Pat goes on to recommend some asset preservation steps, read the full column in Coin Update News here.]

Some questioned that Pat had possibly stated the government's intentions too strongly. To which Pat replied with the following comments on this next Webpage, which I am excerpting here:

Yup, that's right, it's "c·o·n·f·i·s·c·a·t·i·o·n"

Yesterday’s column discussing the Departments of Labor and Treasury September 14-15 hearings about the confiscation of private retirement accounts has already been picked up by a number of other websites. There have been dozens to hundreds of posted comments. Upon reviewing the comments, it is obvious that there is one part of the column that needs more clarification.

Several people commented that the upcoming hearing is focused on voluntary decisions by people to convert their retirement accounts into lifetime annuities, and not the mandatory nationalization of all private retirement accounts that I described. There was at least one comment that my column was an “interpretation” which did not have an underlying factual basis.

Fair enough. I should have included the links to the October 7, 2008 meeting of the House Committee on Education and Labor (Rep. George Miller, D-CA, chair) on the subject of “Saving Retirement in the Face of America’s Credit Crisis: Short and Long Term Solutions.” In particular, refer to the remarks of Teresa Ghilarducci, an economics professor from the New School for Social Research....

Ghilarducci advocated that this program begin as an optional and voluntary conversion to the government accounts and annuities, exactly as the upcoming hearing will discuss. However, her stated plan is that this is not the end of the changes. In her testimony, she twice states than her plan is that “GRAs are universal.” That means mandatory 100% participation.

[For his entire followup, visit this page.]

So the facts seem to be in. The feds want to lay their hands on more stuff, only this time the stuff belongs to one of the government's staunchest —whether they want to be or not—group of supporters: the corporate-employed middle class. As Pat concludes his followup comments:

"So, yesterday’s commentary was not an “interpretation” or lacking in a factual basis. It was simply repeating the words that are already in the Congressional Record. It doesn’t matter whether you use a softer term like “conversion,” the stated ultimate goal following these upcoming hearings is for the US government to nationalize or confiscate all assets in private retirement accounts."

What will the millions of private retirement-account holders do when the federal pirates pull their ship alongside and say "your money or your lives?" To mix a metaphor: will the IRA/401K holdup be the straw that breaks the camel's back (unleashing the revolution) or the last link in the chain of perpetual bondage to tyrannical government.

[1] Strictly speaking, the 9/11 attacks were not by the US government per se, but from a "rogue network" serving the Anglo-American finance oligarchy whose interests lay in war and desolation for majority humans.

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2010 September 06
Copyright © Brian Wright, Patrick Heller | The Coffee Coaster™
IRA/401K conversion | Patrick Heller | Coin Update News | Retirement

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