The Era of Obamanomics and the Redistribution of Your Nest Egg

Congratulations to Barack Obama for winning the US presidency. Two years and $600M later he is now President-Elect. This may be a dangerous time for Baby Boomers as a Democratic Congress may convince President Obama to redistribute your 401(k) for your own good!

As one article put it, “Two questions however hover like a spectre over the celebrations. The first is whether the new president will choose to rein back the economically and socially left-wing agenda of the large Democratic majority in congress.”

Socially left-wing agenda could include the abolition of tax breaks for the $3 trillion 401(k) system realizing some $80 billion in revenue to the government.

This is justified by Democrats on the basis that private retirement funds have lost $2 trillion in this credit crisis and that the government can do a better job of protecting your wealth.

It seems to me this has shades of the Argentinean dash-for-cash as it plans to nationalize it’s own private pension scheme to take control of $30 Billion in private pensions.

As a Baby Boomer in retirement the plan may be no good to you since it will require you to contribute 5% of your income into a government guaranteed retirement account. If you are already retired that’s not going to work for you.

It appears your existing 401(k) will be left as it is but will be taxed. Without further details this may be an unintended consequence.

The Democrats in the US House have discussed 401(k)’s and IRA’s and converting them into accounts managed by the Social Security Administration.

Right now this is only a proposal put before a Democratic Committee by Professor Ghilarducci. You can read her briefing paper “Guaranteed Retirement Accounts” to learn more about her proposal.

Take the time to read it because you may find your personal circumstances may benefit from her proposal. As I always say don’t discount anything without looking into it thoroughly and from your own personal situation.

You should contact your congressman at your earliest opportunity to have your say on what may be a major change in the US retirement income system.

President-Elect Obama has stated on several occasions his belief in the concept of wealth redistribution. So it may not be hard for Congress to take over your nest egg for your own good!

Should Sen. Barack Obama win the presidency, congressional Democrats might have stronger support for their “spreading the wealth” agenda. On Oct. 27, the American Thinker posted a video of an interview with Obama on public radio station WBEZ-FM from 2001.
In the interview, Obama said, “The Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society.” The Constitution says only what “the states can’t do to you. Says what the Federal government can’t do to you,” and Obama added that the Warren Court wasn’t that radical.”

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