Democrats the “terrible” socialists
Posted by Frugal on November 6th, 2008
Even on day 2 after election, I already fear the bigger government that is to come as promised by Democrats. All these people who continue to think that government should take care of their people (by becoming bigger & more expensive) simply don’t understand one basic thing: government simply CANNOT take care of themselves, and there is just no way for them to take care of others. Ron Paul on the other hand understands that point perfectly.
I just read the posted messages from kaimu at BillCara.com about CONFISCATION of 401k account. Here is the link to the original news article. I don’t know who is so dare of doing such things, but by confiscating 401K accounts, and lumping everything into a “GRA” Guaranteed Retirement Account is going to a super-big disaster for US stock markets. Here are some details of the proposals:
1. Confiscating all 401K accounts and turn them into GRA.
2. Every workers will be forced to contribute 5% from their paycheck, in addition to the existing social security and medicare taxes going forward.
3. There will be a guaranteed return of 3%.
Here is the consequences that I think what will happen:
1. Before confiscation, if allowed, there will be a massive exodus from 401K/retirement accounts. That basically means that stock markets will TANK beyond imagination. The same confiscation has been done by Argentine government, and that was the consequence. I simply don’t understand what these people are thinking.
2. All the confiscation on the remaining balances will eventually be sold and the proceeds will buy safest “Treasury bonds”.
3. Economy will shrink even further due to the additional 5% of the collection on paychecks.
People, US citizens, we’d better WAKE UP! We already have a “bankrupt” social security system. The only assets that social security fund has is US treasury bonds, or in another words, debt or IOUs from the USA government. If my right hand (social security agency) owns IOUs of 2.4 trillions from my left hand (executive branch of the USA), what do I have really? NOTHING! The only way to pay for social security is to continue to ask my left hand to collect income tax, and continue to ask my right hand to collect social security tax to pay for ongoing social security payments. My right hand can have one quadrillion of IOU owed by left hand, and I will still have nothing.
Now if Democrats will add this 5% collection for GRA, which is really another form of tax, government will get bigger, and people of USA will continue to shrivel. Yeah, the 5% GRA tax will go directly into the safest investment of more IOU.
Who is going to pay for your retirement? GRA? Social security? Government? We’ve got a big government that collects a huge percentage from the GDP. Collecting from the young people in the form of taxes to pay for the current retirees is the same as robbing your own children in the same familiy. It will NEVER work. In the meanwhile from this process, all the big fat cats in the Washington DC and Wallstreet continue to collect a big commission in the form of benefits/salaries for politicians and bailouts to Wallstreet. Eventually, this process will impoverish everyone, because once a government collects 100% of the GDP, we effectively become a communist country, not a socialistic country.
If US government can take care of herself, she would not be in such a heavy debt. A few people in the government can never allocate economic resources as effective as in a capitalistic society where millions of people are competing against each other. More socialism simply will not work.
The faster we are on this current track to bigger governments, the sooner we will destroy all of our collective wealth thru a totally devalued US dollar. If you don’t have anything, you may think this is a great way to zero out everyone’s wealth. Everyone will have nothing, and let’s all start over?! NO, the reason that I continue to speak out is that my heart will be so broken to see so many hungry people around me without food and necessities, and I can barely help some of them. It’s just not going to be “everyone has nothing, and let’s start over”. It’s going to be millions of hungry and angry people, while the most wealthy or the smart people may have their 90% wealth wiped out. But they will have food to eat because they have allocated their wealth in other tangibles, and not you. That is the specter of hyper-inflation, and that is always the road taken by hyper-inflation. There is just no exceptions.
Be intelligent! There can never a free lunch handed out by the government. The government takes from us, and we form the government. You cannot make yourself wealthy by taking something out of your own pocket, let someone else handles it and collects a commission, and then gives it back to you for the remaining of what’s left.
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November 6th, 2008 at 12:42 pm
Really? Did you bother to look at any other references before posting this? Ghilarducci was giving testimony to a sub-committee. No one, and the article specifically states this, is giving this testimony any more credence than any other suggestions. But, the conservative media has locked onto this one item and run with it. Read other sources. We need to WAKE UP alright. Wake up to the fact that there’s too many people in this country who lack critical thinking skills and just take anything the media tells them as an absolute truth.
November 6th, 2008 at 2:08 pm
Oh Frugal,
you believe everything you read. Sad Think for yourself
November 6th, 2008 at 7:53 pm
@Spoonman: Uh… the conservative media?
Frugal, I agree with the others that the plan doesn’t carry any weight, but it does reveal that there are some in the current political system who, themselves, lack critical thinking skills in the fields of finance and economics.
Grant
November 6th, 2008 at 10:31 pm
Seriously dude, not one of your better posts.
I suggest letting the new president and Congress take office before starting to freak out. Who knows, maybe they’ll surprise you. Heck, maybe they even have a better way…
November 6th, 2008 at 10:31 pm
Seriously dude, not one of your better posts.
I suggest letting the new president and Congress take office before starting to freak out. Who knows, maybe they’ll surprise you. Heck, maybe they even have a better way…
November 6th, 2008 at 10:31 pm
Seriously dude, not one of your better posts.
I suggest letting the new president and Congress take office before starting to freak out. Who knows, maybe they’ll surprise you. Heck, maybe they even have a better way…
November 7th, 2008 at 8:09 am
Folks,
Times like this, I often wish I’m dead wrong. I only wish the best for everybody, and nothing else, and I hate to see US sinks further.
Such action is drastic and let’s hope it doesn’t happen at all. If it does, we will just sink further.
Regards,
Frugal
November 7th, 2008 at 8:33 am
Yes, the conservative media. If I have to listen to the stupidity of things like “the liberal media”, then it has to be acknowledged that there’s an alternatively-biased segment of the media. I haven’t seen this as an issue outside of places like Fox and Drudge (and the smaller wannabes). I pay attention to all sides before making decisions.
Frugal, that’s just your opinion. People who are more intimate with economics, such as…economists, disagree with you. You’re very good at gaming the system, but that doesn’t make you an expert.
November 7th, 2008 at 8:29 pm
Frugal, I think you’re right on point. I sense a egalitarian backlash arising from the “un-washed proleteriate”. Argentina just did it to supposedly cushion the blow of free market price deflation (even though they have big debt remittances to make in the next few months.)
Obama worries me solely due to the fact he has the cult of personality, everyone is so relieved Bush is going to finally be deposed normally critical people are willing to suspend judgement, couple that with dominence of both houses by Democrats and a possible close super majority that would be filibuster proof and I think you’re asking for trouble.
We have to remember that government doesn’t have anything it doesn’t take from someone else. When we ask the government to help, it WILL come at the expense of someone by force, so when government serves up a mandate to do this or that we should ask at what expense and to whom.
Many people are ready to slaughter the free market concept due to a supposed lapse of markets to self regulate, necessitating government regulation in “all its civil servant wisdom”. What I’ve drawn from this whole mess is that we never did have a free market system because if you follow the money as any good detective should, you will find an inept governmental official considering political ramifications rather than economic ones.
We need a sound commodity based currency and a full reserve banking system if we want to minimize these boom and bust economic cycles. Sure it would be boring, slow and predictable but after these past couple of months and considering the few gray hairs left on my stress induced balding head, I think I wouldn’t mind too much.
November 8th, 2008 at 2:58 pm
Every Million starts with a cent
True or not, Frugal
http://bux.to/?r=ang_lupin
November 8th, 2008 at 6:55 pm
I cashed out of the market when DOW was 12k. I do not see the future of our country getting any brighter and expect to see the markets continue down to 1950′s level.
November 9th, 2008 at 8:37 am
If you really believe your dire predictions about the US economy then are you acting on it?
You can make money if the stock market goes down by either shorting, or investing in counter-cyclical stocks.
I find a lot of republicans who are predicting dire consequences of an Obama presidency (socialism, depression, mushroom clouds over US cities, banning of the boy scouts etc.) I think a lot of this is just hyperbole. Care to prove me wrong my putting your money where your mouth is?
November 10th, 2008 at 2:21 pm
i’ll be the first to start class action if anything passes for forced involuntary seizure of 401k’s. With that said, I highly doubt that the government would tread this way.
November 10th, 2008 at 4:23 pm
I agree that the next two year look bleak; in my 401k I don’t have access to any derivatives at all, so I can’t bet it… but I am all cash, for the first time in my life.
In any case, you should check your sources… the GRA proposal does not confiscate your 401K. There might be incentives to xfer it to a GRA.
November 11th, 2008 at 8:24 am
To all who don’t think the GRA is a possibility:
DON’T BE NAIVE!!
Do you honestly think that if our 401Ks and IRAs continue to erode to the tune of 50-60%, the retirees and soon-to-be retirees (who can outvote ANYBODY) won’t flock to big brother like the knee-jerk lemmings they are, just to ensure THEY will be taken care of?
And the gov’t doesn’t HAVE to mandate that all participate in the GRA system. Who in their right mind WOULDN’T exit their 401Ks and IRAs once all the big money starts heading for the hills?
This is not right wing media bias. This is a legitimate option proposed to congress. The idea may still be in its infancy, and it may never gain traction (especially if the market improves), but don’t be naive to think if the gov’t can get the votes they wouldn’t love to HELP us by providing a “secure” retirement.
November 11th, 2008 at 9:58 am
BTW…. IMHO, covered calls on stong dividend paying companies might not be a bad idea to weather this storm in the near to mid-term..
November 17th, 2008 at 9:14 am
Frugal,
I commend your taking the risk to post such a controversial piece on your site and I whole heartedly agree with what you speak of. All you are doing is attempting to pull the wool off from over the eyes of your readers.
Please keep up the good work.