I am a strong supporter of our government. I obey the laws (even little ones like speed limits and seat belt laws) and pay my taxes without complaint and without seeking any tricks to minimize those taxes. Supporting the government, however, does not mean that I trust the government when they ask for expanded powers. I oppose the efforts of courts, congress, or the President to increase their powers in any area of society. In the financial sector that lack of trust has proven to be a sound policy recently. As September turned to October I wrote six different times opposing the bailout. All over the news and in many blogs people were saying that we should hold our noses and accept that plan because it was necessary. Now I am finding it ironic that some those same people who support the government managing more of our lives are unhappy as they see the mismanagement of the "necessary" bailout funds.
It seems that Congress is the special group in the world that can convince us to let them have more of our money based on how poorly they use it. Perot Charts reports that Theresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York testified testified in support of a plan that would "modify" 401K’s. Components of the plan include the following:
- All workers would receive a $600 annual inflation-adjusted subsidy from the U.S, government but would be required to invest 5 percent of their pay into a guaranteed retirement account which would be invested in government bonds that would accrue 3 percent per year.
- The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
This is extremely frightening considering that the 5% that you would be required to "invest" (at only 3% return) on a $25,000 salary is $1250 For that you would receive a $600 subsidy. This might appear helpful to those who make very little money, but the benefits of their savings are insignificant compared to their needs at retirement and come at a very high price for everyone who just lost their tax savings that encourage them to save in a 401K, not to mention the disincentive that this would be to business who have provided tax free matching for 401K accounts which do much better than 3% returns 90% of the time. Overall savings in the country would decline under this plan.
Is it any wonder that my support of our government does not include my trust. We should all support our government no matter who is in power, but support means that we watch them instead of trusting them. It means that we hold our leaders accountable for what they do. For me, it means that every chance I get I will encourage them to give power back to the people and the states. I like that 10th amendment – too bad it gets worse treatment than the other 26.