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The Next Phase: Looting Social Security, 401Ks, IRAs and Whatever Is Left?

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  • Fri, Feb 13, 2009 - 11:17pm

    #1
    SamLinder

    SamLinder

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    The Next Phase: Looting Social Security, 401Ks, IRAs and Whatever Is Left?

http://jessescrossroadscafe.blogspot.com/2009/02/next-phase-in-march-of-greed-looting.html

After what we have seen in the last eight years in particular, why
do we assume that there is any boundary to the venality of powerful
men? That there is ever enough?

Crony capitalism gives way to
coolie capitalism. The belief in the priority of the privileged few to
possess the greatest share of the nation’s wealth endures.

Where is the justice? Where is the reform?

"Greed is a fat demon with a small mouth and whatever you feed it is never enough."
Janwillem van de Wetering

“Experience
demands that man is the only animal which devours his own kind, for I
can apply no milder term to the general prey of the rich on the poor."
Thomas Jefferson

"The more we do to you, the less you seem to believe we are doing it."
Dr. Josef Mengele

 

  • Fri, Feb 13, 2009 - 11:32pm

    #2
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

Sam,

This warning is some 80 years late.  The SS "fund" does not exist.  It never has.  It’s a made-up concept.  The money current payers pay goes directly to beneficiaries (retirees), and since there is not enough for that, the SS "fund" is negative.  That’s the way it’s been since inception.  It’s the biggest Ponzi scheme ever devised.  

Ditto for medicare and medicaid.  

What the government should be working on is reform of all three of these entitlement programs so as to cut outlays by about half.  It is political suicide to do so, so unless Obama really is a great leader, I doubt it will happen.  The likely soluton is to print more money.

As for looting 401k’s and IRAs:  If the dollar were backed by gold, then I’d worry about them taking such steps.  But, since the dollar doesn’t mean anything, there is no need to raid these programs.  They can just turn on the magical printing press.  Much easier politically.

I find the likelihood of them raiding private security-boxes at banks in search if gold, and making gold possession or sale (except to the government) illegal, which is something they have done before, to be much higher.  They could be forced to do this if, for example, foreigner banks stop lending us money.

  • Sat, Feb 14, 2009 - 12:01am

    #3
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

[quote=Patrick Brown]

As for looting 401k’s and IRAs:  If the dollar were backed by gold, then I’d worry about them taking such steps.  But, since the dollar doesn’t mean anything, there is no need to raid these programs.  They can just turn on the magical printing press.  Much easier politically.[/quote]

I think the point that this fails to address is that inflation IS the equivalent of confiscating the value of one’s savings account or 401K.  I fully believe that 401K and IRA programs will be raided, but that it will be done in the most covert way.  If the hard earned money you put in the bank today is worth nothing tomorrow, it’s value has been confiscated.

Of all people, Alan Greenspan, wrote an amazing article explaining that without a gold standard, the government is free to use inflation to purposely move wealth away from people who save their money.

"In the absence of the gold standard, there is no way to protect savings from confiscation
through inflation. There is no safe store of value. If there were, the government would have to make
its holding illegal, as was done in the case of gold [during the Great Depression]. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as
payment for goods, bank deposits would lose their purchasing power and government-created bank
credit would be worthless as a claim on goods. The financial policy of the welfare state requires that
there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a
scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a
protector of property rights. If one grasps this, one has no difficulty in understanding the statists’
antagonism toward the gold standard.
Alan Greenspan – 1966

Read the entire 1966 article by the master, himself: 

I http://www.ok-safe.com/files/documents/1/Gold_and_Economic_Freedom_an_Article_by_Alan_Greenspan_1966.pdf

 

Amanda

 

  • Sat, Feb 14, 2009 - 12:48am

    #4
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

I totally agree, propomanda.  I was assuming we all agreed printing fiat money is just another way of taking a portion of everyone’s exisiting money.  The only difference is political expediency.  I wrote about this in another thread, here: http://www.PeakProsperity.com/forum/time-get-out-way-what-capitalism/12461   Sorry, I don’t know how to create a hyperlink but that’s the URL.

  • Sat, Feb 14, 2009 - 12:48am

    #5
    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

[quote=Patrick Brown]

Sam,

This warning is some 80 years late.  The SS "fund" does not exist.  It never has.  It’s a made-up concept.  The money current payers pay goes directly to beneficiaries (retirees), and since there is not enough for that, the SS "fund" is negative.  That’s the way it’s been since inception.  It’s the biggest Ponzi scheme ever devised.  

Ditto for medicare and medicaid.  

What the government should be working on is reform of all three of these entitlement programs so as to cut outlays by about half.  It is political suicide to do so, so unless Obama really is a great leader, I doubt it will happen.  The likely soluton is to print more money.

As for looting 401k’s and IRAs:  If the dollar were backed by gold, then I’d worry about them taking such steps.  But, since the dollar doesn’t mean anything, there is no need to raid these programs.  They can just turn on the magical printing press.  Much easier politically.

I find the likelihood of them raiding private security-boxes at banks in search if gold, and making gold possession or sale (except to the government) illegal, which is something they have done before, to be much higher.  They could be forced to do this if, for example, foreigner banks stop lending us money.

[/quote]

Hi Patrick,

It’s the biggest Ponzi scheme ever devised.

I absolutely agree with you. I found the article interesting but was dismayed that the author acted as if there was actually an account containing Social Security funds. I remember seeing a show about the Social Security Fund some time ago – might have been 60 Minutes or a 20/20 program. Anyway, the person in charge showed the reporter where all the "money" was kept. It was nothing but a filing cabinet containing a bunch of IOU’s. The article’s author incorrectly stated the following (emphasis mine):

Actually, the government has already spent their money. Every year the
Treasury has borrowed the surplus revenue collected by Social Security

and spent the money on other purposes–whatever presidents and Congress
decide, including more tax cuts for monied interests. The Social
Security surplus thus makes the federal deficits seem smaller than they
are–around $200 billion a year smaller. Each time the government dipped
into the Social Security trust fund this way, it issued a legal
obligation to pay back the money with interest whenever Social Security
needed it to pay benefits. 

That’s a crock. As you well know, the Treasury has "borrowed" (read: stolen) all the revenue collected by Social Security.

Since I’m now beginning to draw a Social Security check (having achieved this magical age of 65), I always have this nagging fear in the back of my head that the government will yank away one leg of the 3-legged stool we were told for so many years to make sure we had as part of our retirement planning (pension and savings being the other two).

To say I’m a bit miffed with the whole thing would be quite an understatement!

I find the likelihood of them raiding private security-boxes at banks
in search if gold, and making gold possession or sale (except to the
government) illegal, which is something they have done before, to be
much higher.  They could be forced to do this if, for example,
foreigner banks stop lending us money.

I think they’ll find the populace not quite as compliant as the last time they did this!

  • Sat, Feb 14, 2009 - 12:58am

    #6
    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

[quote=propamanda]

I think the point that this fails to address is that inflation IS the equivalent of confiscating the value of one’s savings account or 401K.  I fully believe that 401K and IRA programs will be raided, but that it will be done in the most covert way.  If the hard earned money you put in the bank today is worth nothing tomorrow, it’s value has been confiscated.

<snip>

Amanda

[/quote]

Amanda,

What a coincidence. Earlier today, I came across this article that talks about just this very thing – you may find it an interesting read:    http://www.financialsense.com/fsu/editorials/amerman/2009/0212.html

However, be aware that he is only providing Part-1 and that he wants you to sign up
for a free subscription to read the subsequent parts. It may be legitimate – or not. Undecided

  • Sat, Feb 14, 2009 - 01:01am

    #7
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

 Sam,

Unfortunately, people like you, i.e., current beneficiaries, are the ones most likely to be hurt be either cutting programs or funding them via fiat-money inflation.  

I’m only 37, and as far as I’m concerned, I am not pretending that SS will be around when I’m 65 (or 165 – if that becomes the new retirement age!) .  What scares me is what effects hyperinflation or program funding cuts will have on existing beneficiaries.  Anyone who relies on this income stream for any significant portion of their retirement, will be in serious trouble. 

What do you think will happen?  Will grandparents move in with children or grand children?  Will everything just collapse, the SHTF, and all bets are off?  Grab your guns and your Twinkies?  How are we going to get out of this?  

Just curious how you see it as a current beneficiary.  

Also, in another thread we ended up debating something (I can’t even remember what), but forgot to respond to your last post, which I do remember I totally agreed with!

Cheers,

Patrick

  • Sat, Feb 14, 2009 - 01:16am

    #8
    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

[quote]I remember seeing a show about the Social Security Fund some time ago –
might have been 60 Minutes or a 20/20 program. Anyway, the person in
charge showed the reporter where all the "money" was kept. It was
nothing but a filing cabinet containing a bunch of IOU’s. [/quote]

From usatoday.com in 2005:

These 2 quotes struck me the most:

 

[quote]

Sen. Jon Corzine, D-N.J., a former investment
banker, accused Bush of misleading the public. "U.S. Treasury
securities have the ability to be paid under any circumstances based on
the ability of the government to print money," he said.

"What did (Bush) expect to see there? Gold?"
asked Dean Baker, a liberal economist who says Social Security does not
face a financial crisis. "The trust fund contains government bonds that
are just like any other government bonds."

[/quote]

 

http://www.usatoday.com/news/washington/2005-04-05-trust-fund_x.htm

  • Sat, Feb 14, 2009 - 02:07am

    #9
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

Oh man.

Thanks, Sam.   I found the article you posted (http://www.financialsense.com/fsu/editorials/amerman/2009/0212.html) to be really interesting.

And in a way, truly disturbing.

      "Bernanke got his nickname of “Helicopter Ben” from a flippant comment he made, in which he dismissed deflationary fears with a joke about dropping money from a helicopter if needed. This is a very important joke, with drastic implications for your personal net worth.  

 . . .

     The Fed is creating money at a rate never seen before, trillions of dollars a month, effectively out of thin air. The Fed typically doesn’t do this, because, of course, such actions rapidly destroy the value of the currency. But if the person in charge of the money supply understands that destroying the value of the currency is how you prevent deflationary spirals from getting started – and believes massive and fast government intervention is the best way to stop an incipient depression before it gets any worse – then much of what the Fed has been doing becomes more understandable."

 

 

 

  • Sat, Feb 14, 2009 - 02:45am

    #10
    Peak Prosperity Admin

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    Re: The Next Phase: Looting Social Security, 401Ks, IRAs …

Quick question here: Are we forced to participate in SS? Isn’t there some way you can opt out? Is there a form to fill out that says, "Thanks, but no thanks."? I know of a couple of different people over my lifetime that are not "in" SS. How was this possible? Any hints, ideas, instructions? At this point, it seems really stupid to continue to pay into a black hole. But, having said that, maybe there is some logic at work because, assuming they do pay you when you reach 65, it would be in inflated dollars, right? So, maybe it is the least safe "safe haven"? Please, someone bring clarity to this, if possible.

Many thanks, in advance- Tim 

 

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