Bastiat’s Bastions

…Then, the finances.

When I tell someone that I fear the U.S. is going to be completely transformed into a socialist economy, two of the most common responses I get are: (1) No way; and (2) There’s nothing wrong with that. Notwithstanding the validity of the second response, there is mounting evidence that “no way” is completely wrong.

To begin, there is the potential Obama/Bush Treasury/Federal Reserve set of issues. Then, there’s this lovely story (via Best of the Web Today), where we learn of “A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York.”

Ghilarducci actually testified about her plan last week, on Capitol Hill, though I don’t recall her (apparently well-received) testimony making the evening news.

What is the crux of her plan?

…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 administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation. The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

We can call this by any name that we like, but it does not change the end result of the plan: the government will take over private retirement accounts. But why only 3 percent? With the rates the Feds are charging AIG, surely they can do better than 3 percent. I almost wish I didn’t believe this was happening.

NM

This entry was posted on Thursday, October 23rd, 2008 at 9:23 pm and is filed under General, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.