I've heard a little about this on the radio in the last couple of days, but have seen nothing in the MSM. This is very important, IMO, and people need to know what's in store for them with a (God forbid) Obama administration. I've already sent out emails on this topic, please pass this information around to anyone you know with a 401k. From the article linked in the DUmp OP:fed_up_mother (1000+ posts) Sat Oct-25-08 10:08 AM
DAMN! Freepers have linked to U.S. News & World Report on dem story re 401k's
This is not good news. Biden's so-called gaffe was nothing compared to this:
Would Obama, Dems Kill 401(k) Plans?
October 23, 2008 10:47 AM ET | James Pethokoukis | Permanent Link | Print
"I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts (Efharisto, Fausta's Blog). Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.
More at http://www.usnews.com/blogs/capital-commerce/2008/10/23...
I understand that this is just one plan they were considering, but this kind of crap could really scare a lot of voters. We are so close I can smell victory, but Obama needs to get on top of this ASAP before this gets emailed to millions of folks over the next week.
... A few respectful observations:
1) McDermott is right when he says the savings rate isn't going up. But the savings rate doesn't include gains to money you invest in the stock market. It ignores the buildup of net worth. (If you bought a share of XYZ Corp. in January at $100, for instance, and its value doubled by December, the savings rate measure would still value that investment at $100. In short, the savings rate is a phony number.)
2) So based partly on the above faulty logic, the $4.5 trillion, as of the start of the year, invested in 401(k) plans doesn't count as savings.
3) Ghilarducci would have workers abandon the stock market right at the bottom of the market. A stupid idea, according to Warren Buffett: "I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: 'Put your mouth where your money was.' Today my money and my mouth both say equities."
4) Ghilarducci would offer a lousy 3 percent return. The long-run return of the stock market, adjusted for inflation, is more like 7 percent. Look at it this way: Ten thousand dollars growing at 3 percent a year for 40 years leaves you with roughly $22,000. But $10,000 growing at 7 percent a year for 40 years leaves you with $150,000. That is a high price to pay for what Ghilarducci describes as the removal of "a source of financial anxiety and...fruitless discussions with brokers and financial sales agents, who are also desperate for more fees and are often wrong about markets." Please, I'll take a bit of worry for an additional $128,000.