Sunday, February 20, 2011

Applying the Individual Mandate to your retirement account

Rather than abide by Judge Roger Vinson's ruling that the entirety of Obamacare is null and void, the Obama administration is doing its best to ignore the decision. It is continuing to implement new regulations and create new bureaucracies while playing "Four Corners" in court.

The reason is simple: if the Individual Mandate is eventually deemed unconstitutional by the Supreme Court, many of the Statists' grand plans for this society go poof -- pulverized into dust.

For if the government can compel you to purchase a particular kind of health insurance product, what are the limits on the bureaucrats' control over the individual? Truly, there are none, for the appetite of the Democrats is insatiable. As their massive social engineering experiments implode (say, Medicare and Fannie Mae), they're on to the next set (e.g., Obamacare and HAMP) without a single look back to see what went wrong.

Using the Individual Mandate to force you to buy 'safe investments'

Next on the Democrats' agenda: a plan to use the precedent of the Individual Mandate to force you to buy "safe investments" in your retirement accounts. Oh, it would be for your own benefit. They're just looking out for you.

The always fascinating Pensions & Investments (their latest centerfold was a real doozy) reported last year that the feds were examining the regulation of all private pension plans.

The point being: the Obama administration would love to get their hands on the trillions of dollars in private retirement accounts. By forcing individuals, say, to buy annuities (for their own safety, remember), they would require the insurance companies that manufacture annuities to include a certain amount of Treasury notes (government debt) in their investment portfolios (again, just for safety's sake).

That would funnel trillions of private dollars into the government's coffers in exchange for paper promises, enabling them to continue borrowing and spending like drunken liberals.

In 2008 Democrats talked openly about 'eliminating investment risk'

It's not crazy talk: Congressional Democrats, circa 2008, openly discussed the possibility of confiscating 401(k) and IRA plans; one can legitimately connect the notion of "eliminat[ing] investment risk" to giving the feds control of your retirement account.

...In a joint agency RFI published in today's Federal Register, the Treasury and Labor departments expressed concern that defined contribution plans generally make only lump-sum payments available to plan retirees.

The agencies specifically want to know whether some form of “lifetime income distribution” should be required in all defined contribution plans...

To put this news in context, consider that in late 2008 Democrats openly discussed the possibility of confiscating private retirement accounts in order to "strengthen and protect Americans’ 401(k)s, pensions, and other... plans".

The [Congressional] testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

...The current retirement system, Ghilarducci said, “exacerbates income and wealth inequalities” because tax breaks for voluntary retirement accounts are “skewed to the wealthy because it is easier for them to save, and because they receive bigger tax breaks when they do.”

...GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants.

In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.”

Now that the Democrats have decimated the economy (more quantitative easing, anyone?), the trillions of dollars in private retirement accounts represent the juiciest of all possible targets.

The Individual Mandate is unconstitutional. Because if it is not, the federal government has unlimited power over the individual -- and our free society really will have come to an abrupt and unseemly end.

1 comment:

Reliapundit said...

it's for our own good!