Federal government may seize part of your IRA
[I don’t think this is likely, but then again, when you look at the influence of money on politics, the corruption across all financial sectors, the largest bubble in human history combined and peak energy plus other, there’s not telling what might happen. Also, it has happened in other countries. The FDIC won’t be able to pay people, we depend on China for finished goods and need to pay for our oil habit, so it’s really not impossible – the government would probably take over your IRA rather than have a sovereign default].
The national debt today is a staggering $14.25 trillion. In the past 3 years alone, our government added $5.5 trillion in new debt – nearly a 60% rise.
Federal spending increased a record 29% during President Obama’s first 3 years. The government budget deficit is estimated to be $1.2 trillion.
“Total monetary and financial collapse of the massive government debt bubble is upon us, with devastating real-world consequences for your savings property values, investments, and other assets,” says Robert Mundell, an economist at Columbia University. “We’ve never been in this unstable position in the entire currency history [of] 3,000 years.”
Where can the federal government turn to for cash that can help it dig out of this hole?
How about your IRA?
Americans have $4 trillion saved in 401K plans and another $8 trillion in IRAs and pension plans, 95% of which are invested in the equity markets, mainly stocks and mutual funds.
If the U.S. government forces investors to invest 50% of their IRAs in government bonds, that would raise $6 trillion.
In fact, Congress once passed, and later rescinded, a 15% “excess retirement accumulations excise tax” on large retirement plans. Reviving that tax could bring the government a lot of money.
Unthinkable that the U.S. government would seize control of a portion of your IRA in this manner? Think again. It is happening all over the world, and the U.S. may soon follow suit.
Eight countries have raided retirement plans since 2008, including France, Poland, Ireland, and Hungary.
Teresa Ghilarducci has proposed her plan to Congress, a ‘Guaranteed Retirement Account’, or GRA.
In her words “…a GRA will accumulate 5% of their paychecks in a GRA over their lifetime. The government would credit their accounts with 3% plus inflation… GRAs would provide a safe and secure retirement to 63 million people.”
Of course, this is only coming up because the now ‘in the red’ Social Security system will no longer meet its purpose. So why not double down?
And more bad news: whenever a government has seized a portion of its citizens’ money from retirement accounts, the stock market has plunged … which would further drain wealth from your IRA.
When Argentina moved $29 billion in public pensions into government accounts in 2008, their stock market lost 13% of its value.
And when Hungary required that private pensions invest in public debt in 2010, their market fell 14%.