Posted on 09/07/2013 8:37:01 AM PDT by whitedog57
In a news story that should terrify Americans, Poland reduces public debt through pension funds overhaul (reform).
On Wednesday, Poland’s Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings. The funds would effectively be left with only the equities portions of their assets, even this would be depleted, and there will be uncertainty about the number of new savers joining. By shifting some assets from the private funds into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend. Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of GDP. This in turn, he said, would allow the lowering of two thresholds that deter the government from allowing debt to raise over 50 percent, and then 55 percent, of GDP. Public debt last year stood at 52.7 percent of GDP, according to the government’s own calculations.
Ah, the old “move it off balance sheet so no one will notice it” ploy. You know, the same way that President Lyndon Johnson moved Fannie Mae off balance sheet so no one would notice. And the same way politicians keep Social Security, Medicare and other exploding entitlements off balance sheet in the hopes that they can avoid facing the truth.
Let’s do some simple math for America. U.S. retirement assets total $19.4 trillion. Off balance sheet liabilities (Social Security, Medicare, etc.) for the USA total $70 trillion. This be too tempting an apple for a government that is broke.
Is Washington talking about retirement “reform”? Consumer Financial Protection Bureau director Richard Cordray mentioned retirement accounts in a recent interview, stating “That’s one of the things we’ve been exploring and are interested in, in terms of whether and what authority we have.” In other words, Cordray wants to protects consumers against themselves. And that will require “reforming” retirement accounts.
The dreaded “reform.” Just the way that they “reformed” healthcare and are talking about “reforming” mortgage finance. I remember when Republican Senator Jim Bunning of Kentucky suggested moving state pension funds into the Federal government and issuing Social Security chits. When Washington says ‘reform,” hide your wallets!
I love visiting Poland and wish them well. But I am concerned about the Federal government takeover through “reform” in the U.S. too. You might say, it can’t happen here?
On Friday, we saw the labor force participation rate fall to the lowest level since President Jimmy Carter. Welcome back, Carter.
CIVPART090713
Mean duration of unemployment is higher than … EVER. And staying there.
UEMPMEANa
People not in the labor force has breached 90 million … and still growing.
notinlaborforce
And don’t forget the 47.6 million people on food stamps, not to mention the millions and millions on government-assisted breakfast, lunch and other food programs.
snapmay13
And the list goes on. Eventually, the government will get around to retirement accounts and folding them into our worthless Social Security program.
Just remember, because 15% of Americans had no healthcare insurance, the government took away healthcare for the 85% that had it through “reform.” They will eventually do the same with your retirement savings.
Just ask Senator Elizabeth Warren (D-MA) and other politicians if they plan to reform/seize your retirement accounts. And watch their noses grow like Pinocchio!
democrats
Didn’t the Germans do this in the 1930s?
I worked for forty years and went without a lot of things to save up for my retirement. Even now I skimp and go without stuff I would like to have and leave my retirement to be self sustaining. BUT if this comes about, I guess the joke is on me. I should have been out partying it up and running through it like a dose of salts. After all, the gubmint is there for me, right?
I am not sure, but I have seen too many trial balloons proposing that a portion of every retirement program (401(k), IRA, etc) be invested in government bonds.
This will work to reduce the interest rates, until the process equalizes...
In any event, it means a “tax” of sorts on your savings in that it will be restricted to a lower possible return—thus really reducing the long term growth/compounding potential for young investors/savers.
Which retirement assets is this concerning? Is this govt back securities, government pensions, private 401K’s or Mutual funds/stocks of private companies? Just curious. Thanks for any info?
Co za asy!!!
There's a reason some of the greatest financial empires started out on islands or peninsulas where they could defend what they had from the hungry hoards.
Sounds like Mason Jars buried in the back yard may have been the best way to go.
Ironically, Mason jars filled with old silver dollars would be worth small fortunes now.
I can recall many times when banks and stores had silver dollars in circulation. Most people did not care for them because a few weighed quite a bit and paper money was easier to handle.
First clue will be the Fed gov require all fed employees convert all their Thrift Savings Plan from stocks and bonds into US T Bills. Next tell banks that the only thing people can invest in if they open IRA is US T Bills. Next tell corporations that all new 401k plans have only one investment, T Bills. In the US we will use financial repression (limit all private investments to T bills). This was used post WW2 to pay off our war bonds.
There seems to be little warnings on these “bail in” if you're not in the loop. The Cypriot bail in had the Russians pulling their money out prior to the bank shut down and capital restrictions because the Russians had Insider knowledge.
The average American doesn't have a retirement account much less 500 dollars in the bank for emergencies. If the Government confiscates your private retirement the people around you won't care and in fact will be happy that your wealth was redistributed.
The government really wants to get our guns because this type of property confiscation will lead to counter revolution. I believe this is why Obama stopped the influx of old military arms back into the country. This rogue government knows there is a good chance of a real uprising if they impose a retirement account confiscation.
Sounds like Obamacare.
Texas did that with the teachers’ retirement years ago and never repaid it.
Maybe they will need to do a major gun grab, before they can do this. They don't want to face millions of armed, angry citizens.
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