Retirement--American Style
By chrystalia
@chrystalia (1208)
Tucson, Arizona
November 26, 2012 1:36am CST
Well-- I ran into an interesting website, called retirement-usa.org
This group--made up of unions and supposed public interest group, is proposing an attachment to the next budget (if we get one) or a stand alone law, concerning retirement. Now doesn't this idea sound wonderful:
Working for a universal, Secure and Adequate retirement System
How they want to do this is interesting-- the government would mandate that all businesses with more than 10 employees provide IRA accounts, and deposit a minimum of 3% of the employee's salary in the account, which they would have to match. The account would be required unless the employee specifically opts out of the plan, and tax credits would be given to the businesses to offset fees and matching funds costs. They are also looking at tax credits for the working poor to offset the 3% minimum they would have to pay. So I started digging-- and discovered they are pushing that these new mandatory plans be invested in--drum roll please--
U.S. Treasury Bonds and Bills.
Seriously.
This mandatory program would provide retirement benefits above and beyond existing social security. Now I think saving for retirement is a wonderful thing. However-- this plan has a few issues. First, it's being promoted by unions and public interest groups that are primarily funded by unions. When a union is trying to look philanthropic, I wonder. Second, the initial minimum is 3%--but that can change at any time--say, for instance, when Treasuries go into the cellar because we have been downgraded again. Third, thinking "Forward" here--this would open the door to putting all kinds of punitive measures on Private IRA and 401k providers, as private insurance providers are currently getting regulated-- out of existence. And one day--we have a "single payer" retirement system (kind of like single payer insurance, anyone?), controlled by whatever administration and congress is in power--and is essentially a government piggy bank, a place they could conceivably trade worthless treasury bonds-- IOU's-- for real money (or as close to real money as we have...). Fourth-- where is the money going to come from for the tax credits for matching funds, tax credits to the workers involved, tax credits to the businesses for set up fees? Fifth-- FYI, Argentina did this-- when they fell off their fiscal cliff years ago. Their bonds, the retirement money of all their people, are now worth about 29 cents on the dollar, at best, and the administration first disused this in 2010.
So I have to ask myself-- what do the SEIU, the AFL-CIO and some think tanks stand to gain from this? i mean we all know who their friends are-- and their friends would definitely gain a bottomless piggy bank. But what do THEY get?
I wonder about that.
2 people like this
5 responses
@matersfish (6306)
• United States
26 Nov 12
For public unions, it means spending more taxpayer money. They're the only ones that can ever afford to get things like these through. It doesn't work out well for businesses that have to survive using an actual working business model. (And judging by quite a few discussions I've seen on myLot regarding business, not many people at all realize how economics work. They think everything's a bottomless piggy bank.)
If the people operating factories and such have to pay an extra percentage, bye-bye more jobs. But if publicly-funded unions have to do it, politicians in their pockets will just increase budgets. Simple.
My fingers are itching and burning about every other week, as I get started on a long rant and plan to post it here. But then I stop myself and just find something else to rant about.
It drives me absolutely INSANE that people's ideal of "fixing" problems is just to throw more money around.
That's the easy way out that our politicians take. And Obama's election for a second term sends a very loud message: Most of America doesn't care that the throw-money-at-the-problem approach is preferred over actually FIXING something.
Instead of setting up a better system so people have more money when they retire, why don't these brilliant folks get together and do something to drive the cost of living down? Put the money and influence there.
It seems to me they're all working in reverse. They ignore the higher cost of living, other than to say "we need more money!" But if fuel prices, food prices, rent, utilities, healthcare, etc, were lower, then you wouldn't need "matching funds." Someone's IRA would be plenty, without having to force employers to contribute -- or further burden taxpayers.
Then again, if problems in America are no longer problems, we no longer need to hire the politician with the biggest grab bag of goodies and turn a blind eye while armies of bureaucrats strangle productivity.
Unions stand to get more union members, more money, more political influence.
Imagine if Robin Hood were really a megalomaniac. He'd still have the people on his side, since he throws the coin around, and he'd be building up a Scrooge McDuck pool of gold to swim in while cities burned and the poor had their bellies full of stale bread from the back of a wagon.
2 people like this
@chrystalia (1208)
• Tucson, Arizona
26 Nov 12
Bravo--excellent rant, and I completely agree. I did a little digging, and discovered that private retirement funds--IRAs and 401ks, are currently worth about 18 trillion dollars. I wonder when the government will start looking at a retirement law similar to Obamacare, to turn the retirement industry into a single payer entity? After all, if employees were mandated to contribute to the government plan, it would naturally leave them less to invest and save privately. And I'm sure our govewrnment would have no problem spending 18 trillion dollars--or redistributing it.
@allknowing (130195)
• India
26 Nov 12
We in India have several retirement schemes and they have been in place since many years. I am glad finally similar plans are under way in your country.
http://wiki.answers.com/Q/What_is_provident_fund_and_gratuity
There is also the group insurance scheme where even after retirement employees are reimbursement medical expenses up to a limit depending on their grade at the time of retirement. The pension scheme is one of the best plans where an employee opts for either a lump-sum or monthly payment, after retirement.
1 person likes this
@chrystalia (1208)
• Tucson, Arizona
26 Nov 12
I would be glad to see a retirement plan for everyone-- I believe in saving. But this will amount to a bottomless piggy bank for our government to play with--since they can't play with Social Security the way they wish. And the money will be invested in treasury bills--which currently pay almost NO interest, and will not be good investments. As we become more insolvent, if this happens, our employees will see that they could well end up like other countries that have done this, and the people have nothing to show for it.
It amounts to just another way for corrupt administrations, now and in the future, to continue supporting an unsupportable system.
@chrystalia (1208)
• Tucson, Arizona
27 Nov 12
You don't have to deal with our government first hand, but I do. The question is simple-- what does your government invest the money in? And is your government allowed to use the invested money as they wish to, even though it belongs to the investor? If they are investing in good things, like precious metals and private companies, and they aren't allowed to use the money to run the government, that's why it works.
What they want to do here is take this money, and let the government invest it in ITSELF.
If this happens, they will be saying to me--Chrystalia--here is a great stock in the market, the new retirement plan (never mind they will still require me to pay my social security-- our current retirement plan as well as this). Sure, the company ran up 16 trillion dollars in debt in 4 years. Sure, the company lost their AAA credit rating. But we are REQUIRING you to invest 3% of your earnings in this company, and the company can spend your investment any way they want. And by the way, at any time, we can REQUIRE you to invest more, by raising the minimum. Oh, and we forgot to mention--pretty soon-- this company will be given an infinite debt ceiling, so they will NEVER be in debt, no matter how much they spend, isn't that amazing?
I am not an idiot, allknowing-- if someone told me that, I would laugh in their face. We are talking about retirement money here-- it should be invested in a way that causes it to grow, with as little risk as possible. What this plan will go is invest that money in a financial product that is LOSING money--to fund a government that is insolvent. Only someone who doesn't understand money at all (and I know that's not you) would think this was a good idea. Would you let someone invest your money in a failing business? No? well I wouldn't either-- though they may well force me to shortly.
@allknowing (130195)
• India
27 Nov 12
I do not know why you are saying this but here in India it is working perfectly. Insolvency is more an exception and there too there could be some kind of insurance may be?
Being so paranoid about your government is not a happy trend!
@urbandekay (18278)
•
26 Nov 12
We have a similar sytem in UK, it is not one I am favour of. Surely it is up to the individual how they choose to spend the money they earn
all the best, urban
1 person likes this
@chrystalia (1208)
• Tucson, Arizona
26 Nov 12
My thought as well-- what puzzles me is that the unions want this. There is something odd about that, because it only affects non-union employees-- union employees already have retirement plans, as a rule. I am not in favour of it either.
1 person likes this
@urbandekay (18278)
•
26 Nov 12
The only justification I can see for it is that it might prevent those that fail to make provision for their retirement from depending on the state
all the best, urban
1 person likes this
@chrystalia (1208)
• Tucson, Arizona
26 Nov 12
unfortunately, the funds will be supporting the state--and if the economy tanks badly, and treasury bills aren't worth anything--then there will be no retirement money as people retire--I am totally against investing compulsory retirement funds back into the government system--ANY government system. If this were compulsory, but invested in the private sector, and in gold and silver, and the government couldn't touch it--then fine. But the government will be getting a bottomless piggy bank, to use as they wish--which means trouble over here. Maybe in other parts of the world, not so much--but definitely here. this didn't work in South America, either-- in Chile, their program of this type is now worth next to nothing, because it was a government piggy bank. Treasuries don't even pay enough interest to keep up with inflation at the moment, and won't for a while. Saving money is good, but the interest earned on saved funds, as I'm sure you know, has to equal or exceed the inflation rate--or there isn't a point-- the money is losing value. And that's what will happen if our Unions have their way.
It dawned on me that this is in the union's interest because they can use it as a tool to get non-union employees and businesses to join--to get a "good" pension plan, as opposed to a government piggybank.
@mehale (2200)
• United States
26 Nov 12
This is one of those programs that sounds really good at first, and gains a large following, at least until the people begin to actually think about the consequences and begin to wonder what the union groups, big business, etc stand to gain from the proposal. Then it is usually too late and it is in the process of becoming law. I agree with you completely that this should worry the American people. While it sounds good at first, it is probably trouble.
1 person likes this
@chrystalia (1208)
• Tucson, Arizona
27 Nov 12
I don't think the people, bless their uninformed hearts, are going to hear much about it at all, actually-- this one has been being quietly worked on since 2010, and zero mention in mainstream media. The only people screeching were the right wing nutballs and conspiracy theorists (new world order, anyone?). I ran into it while looking for something else, and started digging--and didn't like what I uncovered. If we here about it at all, the media will probably endorse it.
@chrystalia (1208)
• Tucson, Arizona
26 Nov 12
It doesn't even sound good at first-- other than the slogan. The second I started digging and discovered that the plans would be invested in treasury bills--no way. They are paying between zero and 1% right now--in other words, the money immediately begins losing value--and continues to do so as long as there is any inflation at all. And there is ALWAYS inflation, because we are not on the gold standard any longer. Even on the gold standard, there was inflation--but there is generally far less than fiat currency systems. This is an end run to get more money, as I see it-- since it's a little difficult to tap Social Security, they want something else everyone has to pay who works at all-- that they ca use as they wish.
Even with the slogan, it didn't look like a good deal, because of the people backing it.Two of the most corrupt unions in the country, and their paid think tanks? Seriously?
1 person likes this
@JenInTN (27514)
• United States
29 Nov 12
Well..of course it would be another pot of money for them to dip in to and tell people there is nothing left of it when they actually retire. Or..they can always extend the age of retirement so that you have little chance of ever getting it anyway. Sounds familiar?
@chrystalia (1208)
• Tucson, Arizona
6 Dec 12
Yep-- I think it will be a double whammy if they manage to pull it off, and one I won't be participating in. I'm not paying into my social security this tax year, either. To heck with them. I'm hiding my money under the mattress 
The things they dream up over there in D.C. are just amazing, sometimes. I am beginning to wonder if maybe they ARE all E.Ts, with a base on the other side of the moon...
The things they dream up over there in D.C. are just amazing, sometimes. I am beginning to wonder if maybe they ARE all E.Ts, with a base on the other side of the moon...