Poland Seizes Retirement Accounts .. To Borrow More (Tempting Fruit For US Politicians)

Confounded Interest ^ | 09/07/2013 | Anthony B. Sanders

[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.

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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.

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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.

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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!

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[tbpiper]

I worked for forty years...

I'm not quite there yet, but I know what you're talking about. If they take my money, right now, I'd be inclined to shoot somebody.

[BipolarBob]

If you have money, they want it. When Al Gore ran for president he mused once that people shouldn’t be allowed to pass on a house or land to their offspring but it should revert back to the state for them to re-purchase again. I knew then and there that everything you own is not safe. Nothing. If you can’t physically hold it, hide or carry it with a loaded gun to protect it then it is an at-risk asset.