Followed, of course, by no lending, no money, and properties (and buildings) with little to no value when stacked up against the tremendous amounts owed on them. Sound familiar?
I first started to fume when Professor Paul Krugman, a Nobel Laureate with whom I often disagree, but actually respect, wrote an op-ed for the NY Times in which he chastised the bailing out of the Emerald Isle. To wit:
"Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts."
Now, this is the same guy who is somehow CERTAIN that we must continue to spend in tune with the Keynesian Model we've worn out completely, and who thinks that bailing out Too Big To Fail Banks was a GOOD idea. Apparently, Professor Krugman has some Irish in him, but not much American? That seems a harsh assessment, but isn't this the same economist who espoused the benefits of publicizing the losses of our Wall Street Buttheads??
Deep sigh.
Now, onto other outrageous crap:
According to my sources (see ZeroHedge.com, Lies Across America), Ireland is providing 20% of its own bailout money by seizing and utilizing pension funds.
In France, 36 billion Euros are being taken over by the Sarkozy administration to pay current debt obligations - from the government pension plan.
In Hungary, it was announced on November 25th, that all private pensions needed to be remanded to state control. It was a democratic choice: Give us your private pension funds, or we'll see to it that you face a minimum of 70% losses.
In Poland, their RRA (public retirement fund) is already being used to fund sovereign debt.
Well, we've done this sort of monkey business with our social security trust fund, right? I mean, it's ugly, but what can you do? Pay into your IRA, your 401(k), and pray the market doesn't tank and take 40% of your account value with it.
Oh, wait, that already happened. In 2008. Oops! Well, the market's going through the roof now, so who cares? Time to get back in the game, as they say!
And, as of February of this year, the Obama Administration is seeing to it that you do just that. You may have heard about "auto-enrollment"?? Here's the thing: Your boss will automatically start taking money from your check, and administering one of the Big Two retirement plans with it. There's all sorts of IRS language, but it's down to a boilerplate, and you don't have to do a thing. How nice for you!! I'd love to be making minimum wage somewhere - if in fact I could GET a minimum wage job - and know that on top of the 30% coming out of my gross pay for taxes, I can turn over another 3 to 5% to have some overpaid flunky rubber-stamp my retirement.
Now, don't get me wrong: you can opt out. I'm not clear on the procedure, but it is, I understand, not that hard. I have nightmare visions of "opt-out" eligibility dates, like open enrollment for health insurance, but I don't have anything to back it up, so I'll assume (for now) that if you don't want to contribute, there's a form for that.
Got me reading, though: apparently Italy tried the same tact in 2007. 75% of Italian Citizens opted out of the auto enrollment; the government regards it as a resounding failure. The UK is currently trying it as well: apparently they're up to 4% auto enrollment. New Zealand has an 18% opt-out rate.
And, here in the US, we have a triumphant "80% Take Up" rate. In other words, only 20% of automatically enrolled workers have opted to keep their money in their own hands. I see that as shameful; it is a slippery slope from "auto enrollment" to "mandatory enrollment", and the final pocket of the middle class is twisted empty, in the name of "austerity".
From savingtoinvest.com: the major points of the Obama package are as follows:
- Expansion of Automatic Enrollment to small business, creating as near a universal enrollment of working citizens as possible.
- Converting unused Vacation time to investment in the Big Two retirement plans.
- Encouraging Americans to take their federal tax refund in Savings Bonds.
I also have issues with the idea of vacation time - and, one can easily extrapolate to sick time, personal days, and the advent of what may be called "retirement" days - days in which your entire days' pay goes to your IRA/401 (k). I'm familiar with the "use it or lose it" of vacation time - I considered it pointless, as it encourages workers to take time off they may not need/want to take.
The big kahuna of this whole thing, though, has to do with tax returns. If you, the Fed, take my cash dollars out of my paycheck, and then encourage me to accept a slip of paper symbolizing "your" Federal debt, we're gonna box, as the saying goes. Just like paying in too much during the year in the hopes of getting a "big" refund translates to giving the Fed an interest-free loan, I'm against it. To think that I could, at any time in the future, be FORCED to accept Savings Bonds instead of money scares the hell out of me. You should be scared too.
The take-away? Get your damned money OUT of your 401 (k), your IRA, and if you have to, stick it in a safe at home. Hide the stuff in Mason Jars and bury it. Hell, buy gold, or silver, or 2 years' worth of coffee, flour, corn, whatever you regard as a staple.
And, no, I don't think Roth IRA's are safe... yes, they're funded with after-tax dollars, so they should be safe, but really, in this era of the "last great money-grab", do you trust the bankrupt Powers That Be to leave any stone unturned? I wouldn't.
It's time you started using your head, and not counting on Uncle Sam to hold your hand all the way to the grave. That means getting financially educated. Step 1: Tell Uncle Sam to get his fingers off your damn paycheck. We'll talk next time about steps you can take to minimize your taxable income.
Until then, be safe, be smart, be ahead of the curve.
Brutal Truth
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