Is Fedzilla About to Pull Off a $3.5 Trillion Private Pension Heist?

The alternate media and blogosphere are buzzing with very disturbing stories about how the government intends to steal/seize  private retirement accounts.

Government Sets Its Sights on Private Retirement Accounts: “Giant Effort to Redistribute the Wealth of America’s Older Citizens”

A new effort by the Obama administration, Congress, the Treasury Department and labor unions aims to fundamentally alter how Americans plan and save for retirement.

Warnings have been popping up over the last several years about the possibility of re-appropriating the $3.5 Trillion sitting in private retirement and spreading those funds around to Americans who are deemed less fortunate.

This couldn’t possibly happen in America, right? At one time, most Americans also believed heath care mandates that force Americans at the barrel of a gun to surrender portions of their earnings into a universal system for all would never happen. Well, it did.

And now, those who would control and regulate every aspect of our lives are making a new push; one whose efforts will ultimately end in the seizure and redistribution the personal retirement savings of every American who has ever put money into a 401(k) or IRA.

This is no longer in the realm of conspiracy, but rather, public record.

The articles goes on to document what is currently happening, including "A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.".  If this is true, it's an outright expropriation and theft of all private pensions.

Another view of the situation involves the government erasing the tax deductability of private retirement savings.

Keep Retirement Savings Accounts off the fiscal cliff discussions 

Currently, taxpayers can set aside up to $17,000 in a retirement account without paying taxes on it until it is withdrawn during retirement.

This provision allows workers and small business owners to defer taxes on money they save for retirement until they are older, and more likely to be in a lower tax bracket. It also is becoming an important leg of future generation’s retirement planning as defined benefit pensions become more and more rare.

However, with more than nine trillion dollars invested in tax deferred retirement accounts, these retirement savings have become to some in Congress an almost irresistible pot of money with proposals floated in the past couple of years to replace the savings with government annuities among other things.

Alarming and disturbing as these facts are, there is a whole lot more to the story. Public pensions are massively underfunded and private pensions are also underfunded and becoming the liabilities of the federal government.

State Pensions Underfunded by $4 Trillion

Public pension funds across the country are severely underfunded, threatening the retirement security of government workers and the wallets of taxpayers.

State Budget Solutions, a non-partisan fiscal watchdog, says the underfunding is more than $4 trillion.

Don’t Stick Taxpayers With Underfunded Corporate Pensions

Pension Benefit Guaranty Corp. running $34 billion deficit

The federal agency that insures pensions for 43 million Americans saw its deficit swell to $34 billion in the past year, the largest in its 38-year history.

In its annual report released Friday, the Pension Benefit Guaranty Corp. blamed the growing shortfall on its inability to charge private employers adequate premiums for insuring pensions.

Companies are notorious for shortchanging pension contributions and even dumping pension liabilities on the taxpayers. This is a very problematic trend that will vastly accelerate.

Record $355B Pension Underfunding for S&P 500 Companies

Defined-benefit pensions at S&P 500 companies reached a record underfunding level of $354.7 billion at the end of 2011, an increase of more than $100 billion from 2010 and surpassing the $308.4 billion prior record underfunding level set in 2008, according to a new study by S&P Dow Jones Indices. Underfunding for other post-employment benefits, or OPEBs, increased to $223.4 billion in 2011 from $210.1 billion in 2010.

“Companies are continuing the trend of moving away from pension obligations and into 401 types of investments as they shift the responsibility of retirement away from the corporation and over to the individual,” says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Combined, the amount of assets that S&P 500 companies set aside to fund pensions and OPEB amounted to $1.38 trillion, covering $1.96 trillion in obligations with the resulting underfunding equating to $578 billion, or a 70.5% overall funding rate.

The rush to seize private pensions is also driven by the fact that Social Security is no longer the cash cow for the government that it once was and its ability to continue to pay benefits now require dipping into general revenues.  In other words, the Social Security taxes collected no longer cover the benefits paid.

THE END OF SOCIAL SECURITY SELF-FINANCING: WHAT NEXT?

The Social Security nightmare is substantially the result of the government plundering the Social Security Trust Fund and leaving a worthless pile of IOU's that total at least $2.5 trillion.

Yes My Fellow Americans, Congress Really Did Steal Your Social Security

Fast forward to 2012 and the outright theft of the Social Security Trust Fund is now estimated at $2.5 trillion.

And that's the bitter truth folks. The Social Security Trust Fund has been nothing but a slush fund for Congress Critters since its inception. Congress stole the money, left a big pile of worthless IOU's and spent the money on wars, pork, corporate welfare and other slop. It was a relatively easy heist to accomplish because for decades the SS tax far exceeded the cash outlays to SS recipients. Now, Congress is in an absolute panic because the SS Trust Fund is fully plundered and the SS taxes collected are not sufficient to pay the benefits. In recent years the government has been using general revenues to cover annual shortfalls in the $30-70 billion range and that number will only explode as the Baby Boomers retire.

The idea of the government seizing private retirement accounts is nothing new and Congress held formal meetings on the issue back in 2010.

NEW LAME DUCK THREAT TO BAILOUT UNION PENSIONS

10/8/2010
Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.

Initially, the scheme to seize private pensions was based on a wealth transfer to bailout public sector pensions.  But now that the public sector pension mess ($4 trillion shortfall in funding) has mushroomed into an even bigger financial catastrophe and a plundered SS Trust Fund combined with a bankrupt federal Pension Benefit Guaranty Corp that insures private pensions have entered the picture, I predict that the government will accelerate its scheme to plunder private sector pensions.

America Really is DEBT MAN WALKING, Fedzilla Spends $114,253 Per Second on Revenues of $73,043 Per Second

Drudge had a big ominous headline today.

Federal Deficit Highest Since 1940s

The federal deficit is higher than it has been since the 1940s, in the years immediately after World War II.

A new visual from the "Face the Facts USA," a non-partisan election project from George Washington University, shows the federal deficit has risen significantly under President Barack Obama, and that the government is increasingly spending money it doesn't have.

In every second of 2011, for example, the government spent $114,253—even though it was only taking in $73,043 in revenue. According to Face the Facts, that means the federal government spent $41,210 every second that it didn't actually have.

For the most part, Americans remain clueless relative to the significance of this incredible fact (America being broke and bankrupt) and that's largely because Americans perceive the government as the perpetual cornucopia of plenty that has an infinite capacity to keep them in a style to which they have become accustomed. The massively unsustainable entitlement state absolutely will burst at the seams and fail, just as it has in Greece, Spain and other European nations.

Just how broke is America? We are currently spending about $3.8 trillion on tax revenues of about 2.3 trillion. The debt is over $15 trillion and climbing. Bush and the Republicans exploded the national debt in 8 years by $5 trillion. Obama has already increased the debt by another $5 trillion and counting in about 3 years. No effort is being made to rein in the spending. The government believes that it can literally spend its way out of national bankruptcy and economic ruin.

Think about the cuts that would be required to live within our means ($2.3 trillion in tax receipts). Well, the federal government doesn’t actually have $2.3 million to spend because Social Security receipts fly right out the window in benefits.

The interest on the national debt in 2011 was a staggering $454 billion, according to the Treasury's own website, here.  Of the $2.3 billion in 2011 federal revenues, $1.3 billion came from income taxes and $800 billion came from Social Security taxes, money that is supposed to be untouchable and not spent by Congress but the Social Security Trust Fund is routinely plundered.

Yes My Fellow Americans, Congress Really Did Steal Your Social Security

The White House budget reported that $780 billion was disbursed to SS recipients in 2011. USA Today reported that Medicare and Medicaid totaled a staggering $992 billion in 2011 ($554 billion for Medicare and $438 billion for Medicaid), here. At least 58% of the American people are dependent on government funded healthcare. There are other big entitlement programs like housing, food stamps and unemployment compensation, to name a few.

With Medicare and Medicaid eating up nearly $1 trillion of the $2.3 trillion in federal tax receipts, it's been reported that all federal entitlements now exceed total federal revenue.

Government Cash Handouts Now Top Tax Revenues

U.S. households are now getting more in cash handouts from the government than they are paying in taxes for the first time since the Great Depression.

Households received $2.3 trillion in some kind of government support in 2010. That includes expanded unemployment benefits, as well as payments for Social Security, Medicare, Medicaid, and stimulus spending, among other things.


But that’s more than the $2.2 trillion households paid in taxes, an amount that has slumped largely due to the recession, according to an analysis by the Fiscal Times.

This cannot end well.  In fact, it will end very, very badly for the American people.  The day will dawn when they wake-up and discover that the government really wasn't the cornucopia of plenty as their fictitious standard of living gets nuked by their own delusions and they are blasted back to an era that few Americans are prepared for, namely, living on what they produce and without mountains of fiat debt and government entitlements.