goodbye 401k, hello government..

For all of you investor class types out there - this should open your eyes to the looming economic disaster the democrats have in mind for you. I have a lot of friends who work in the institutional retirement business and this will, in effect, terminate their employment. Can you imagine what would happen to a mutual fund company when the contributions they have been accustomed to each 1st and 15th stop coming in? Can you imagine the absolute beating the stock market will take if 401k contributions go away.

Seriously. There is no one that thinks this is a good idea other than the democratic party. The consequences of actions like this are dire.

http://www.workforce.com/section/00/article/25/83/58.php

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal. …

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.