We have a $17 trillion dollar national debt. The interest on the debt is in the range of $250 million per year and by 2020, based on Obama’s spending plans, that will rise to $1 trillion a year. Maybe.
Our interest payments are relatively small right now because Ben Bernanke and the Federal Reserve are running the printing presses overtime and they are holding interest rates at a level that is about one-quarter of the historical rates. One day, and that day will most likely be in the next couple of years, rates will go up and the interest payments on our rapidly growing debt will skyrocket.
So, how to fix the problem? Where could we find enough money to pay off the debt and still fund all the handouts that progressives insist we have to have?
Democrats in Washington have been talking about nationalizing retirement funds, your 401K and your IRA, for several years. Interestingly enough, that would bring in about $19 trillion dollars. It would pay off the debt and have money left over for investment in green energy and a couple of vacations for Michelle. You would get a promise (see Social Security) that you’d get the equivalent of an annuity that would pay for your retirement.
That will never happen here! Oh yes it will and the mechanism is in place to make it happen, as reported by Bloomberg.
The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.
“That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.
Now it’s not like retirement funds aren’t already regulated.
The retirement savings business in the U.S. is dominated by a group of companies that handle record-keeping and management of investments in tax-advantaged vehicles like 401(k) plans and individual retirement accounts. The group includes Fidelity Investments, JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW) and T. Rowe Price Group Inc. (TROW) …
The Securities and Exchange Commission and the Department of Labor are the main regulators of U.S. retirement savings vehicles and funds. However, the consumer bureau — established by the 2010 Dodd-Frank Act — sees itself as a potential catalyst for promoting a coherent policy across the government, the people said.
Got that? An industry that is already regulated by two different government agencies is about the be attacked by a third. And, the CFPB is a progressive dream agency that would inspire jealousy in Karl Marx.
The biggest concern of the CFPB is that seniors will get “scammed” out of their retirement savings and they will be taking it upon themselves to make sure your money is “safe.” At this point I would note that your “safe” Social Security retirement funds are are in the vicinity of $35 trillion short of what a prudently managed retirement fund would be holding. Mr. Ponzi is smiling in his grave.
“Well,” you say, “the government is just making sure my funds are safe, that’s not like stealing them.” True enough. But the history of government, and specifically government in the United States, is that they never leave a dollar on the table. Again, look at Social Security. The Congress has been spending Social Security taxes as general revenue for six decades. The “Trust Fund” is nothing more than a bunch of US Treasury Bonds sitting in a vault that will have to be cashed in and paid for from general tax revenue because the payments to Social Security recipients is now larger than in the tax revenue generated for Social Security.
All we need is a tipping point.
That could be anything from interest rates rising to the Chinese threatening to put a trillion or so of the bonds they’re holding on the open market which would destroy our ability to sell more bonds to finance our own deficit spending. At that point the CFPB declares that your retirement funds are “not safe” and they sweep them from your accounts and trade you an annuity or just a promise that everything will be fine.
It’s long past time to think about what you’re doing with your money because the Democrats have been thinking about it for years.