Obama’s Plan to Snatch Your Savings

American Thinker

In  his first term, Obama managed to get his paws on health care, banking, energy,  student loans, the auto business, and  more.  Now he has his sights set on your 401(k).


The  left has had its eye on retirement savings for years, but so far takeover  attempts have been rebuffed.  One egregious attempt was the proposal,  following the 2010 financial crisis, to “safeguard” retirement savings by  requiring that they be rolled over into Treasury bonds.  Had this  legislation succeeded, it would have appropriated all or part of the retirement  savings of millions of Americans.  The funds would have been used to  finance further expansion of government.  In return, savers would have  received a promissory note from the  federal government similar that issued by the Social Security Trust Fund.

 Needless  to say, most investors were not keen to convert their savings into Treasury  obligations — or, to be more precise, into an unsecured note promising a return  approximating that of Treasury bonds.  That is because, as with every  other endeavor, government’s management of retirement savings (aka Social  Security) has been a disaster.

Those who believe that Social Security has done a  good job of investing their savings are greatly mistaken.  Over the  past 200 years, the real, inflation-adjusted return of the U.S. stock market has  been 7%.  Had one invested $100,000 in the U.S. market in 1802, one’s  total return after inflation (or that of oneself and one’s descendants) would  have been more than $100 billion.  By comparison, investment  in government Treasury bills would have yielded approximately $50  million.  (Figures are extrapolated from John C. Bogle’s Common  Sense on Mutual Funds.)

 Despite  its 2010 failure to take over retirement savings, the left has not given  up.  As reported in WND, officials at the U.S. Treasury and Labor Departments continue  discussions aimed at channeling private savings into Treasury obligations via a  so-called “Automatic IRA.”  Once it has forced workers and employers  to contribute to Automatic IRAs, and eventually forced existing savings into  government obligations as well, government would control much of the investment  capital in America.  The free market will cease to  exist.

 Perhaps  in support of that goal, Dodd-Frank legislation of 2010 established the Office  of Financial Research (OFR), which recently issued  a report suggesting that mutual funds may pose a risk to financial  stability. At several points in the report, the authors suggest that many  aspects of the financial system are not at present highly regulated and that the  risks of these unregulated private transactions are unknown.  The  implication seems to be that greater government scrutiny is called  for.       

 Once  it is established that mutual funds pose a risk to financial stability,  government will likely proceed on its merry way, with thousands of pages of  regulations bringing those funds, and the savings they manage, under the thumb  of government.  It is only a short step from regulation to  appropriation, whether by seizure via regulation or by mandating an investment  in “safe” government obligations.

 OFR  is a bureaucracy charged with the task of sniffing out systemic risk and passing  along its findings to the Financial Stability Oversight Council  (FSOC).  The chairman of that august body is none other than Jacob  Lew, Obama’s secretary of the treasury.  This is the same Jacob Lew  who was employed as chief operating officer at Citigroup Alternative Investments  (CAI) during the financial crisis.  CAI reportedly incurred significant losses during the financial crisis.  As COO of  that division of Citigroup, Lew would not seem to be an ideal candidate to chair  a committee on Financial Stability — much less the person to be put in charge  of America’s retirement savings.

 It  is of course a travesty to suggest, as Dodd-Frank did, that the private sector  needs strong regulation in the first place.  It was not Wall Street  that was responsible for the housing crisis and subsequent global financial  crisis; it was government.  Beginning with the Clinton administration  and its allies in Congress, government forced financial institutions to extend  subprime loans to undocumented borrowers  in the name of affordable housing.  Now those same regulators want to  seize your retirement savings on the pretext that government can more wisely  manage risk.

 What  actions will FSOC take once it has determined that private savings via mutual  funds and other accounts comprise a “systemic risk”?  Presumably, it  will lend support to the attempt to convert at least part of those savings into  “less risky” government obligations. Those savers will receive an extremely  risky promise of a return of capital with little if any  appreciation.  Meanwhile, over the course of decades, during which  their private capital would otherwise have been compounding at higher rates,  their savings would be “put to work” to fund the expansion of government via  mammoth welfare programs designed to secure votes, further takeovers of the  economy, and the wholesale extinction of liberty.

 That  is the reality, I believe, behind the innocuous-sounding Office of Financial  Research and its report on the supposed risk to the financial system underlying  mutual funds.  It is an important cog in this administration’s  insidious scheme to destroy capitalism and convert America into a socialist  state.

Read more: http://www.americanthinker.com/2013/12/obamas_plan_to_snatch_your_savings.html#ixzz2mb3ppKi3 Follow us: @AmericanThinker on Twitter | AmericanThinker on Facebook

2 thoughts on “Obama’s Plan to Snatch Your Savings

  1. Reblogged this on BPI reblog and commented:
    Obama’s Plan to Snatch Your Savings

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