Audacity: Democrats Want to Destroy Your 401K

They're going to make changes that will very likely mean that your employer will not be offering a 401K plan. And that have the audacity to start forming the plan even before their elected.

If you're hung up and worried about the "Audacity of Hope", you're falling way behind the fast moving liberal Democrats. They have already moved on to the "Audacity of Audacity". Their latest target is the savings and investments of hard working Americans. They have developed the basis of a plan that will destroy the best opportunity that middle class America has for financial wealth and security in retirement; tax deferred, employer assisted 401K plans.

House Democrats Contemplate Abolishing 401k Tax Breaks

Participation in 401K and IRA plans is voluntary. However, financial common sense would indicate that it is foolish to opt out of such a plan -- but Republicans are for freedom, even the freedom to pass up a good deal. Hey, if you don't believe me, remember . . . 401K participation is voluntary . . . you're free to not participate.

But the Demonrats want to do away with the current 401K plan which gives you the choice to participate, and which produces a savings account that you own. They instead are proposing a mandatory "contribution" plan where your money will be thrown in the Social Security pool, owned and operated by the government.

Sounds like more taxes to me. Gee, who would have thought that the Demonrats were for higher taxes?

Here's what an employer assisted 401K plan means for an average hard working American:

• A volunatary contribution of 5%, matched by 2.5% employer, for 7.5% of $50K which means $3,750 per year.
  


• If you work from age 20 to age 65, for 45 years, then contributions total $168,750.


• Assuming very conservative investing strategy and very conservative return figures

50% stocks, 50% bonds

stocks return 8% per year, bonds return 3% per year

net return is 5.5% per year

• . . . the value of your account at age 65 is $690,447
  


• At age 65, your hard work and savings is generating nearly $38,000 per year

Here's what the new Democratic plan means for the average hard working American:

• A mandatory contribution (ie taxes) 5% contribution of your $50K income, plus the $600 subsidy comes to $3,100 each year.


• If you work from age 20 to age 65, that is for 45 years, then total contributions and interest from the 3% bonds comes to $287,432.


• At 3% yield, on $287,432 -- your hard work and mandatory savings is now generating $8,623 per year.


• Do you get the $8,623 per year during your retirment years? You might hope so, but the plan doesn't make any statement with regard to payout. This isn't a private account -- so quite possibly you'll get a fixed amount determined to be "fair" by some liberal bureaucrat somewhere.


• Who knows what your payout will be? Social Security may not even be solvent.


• Do you get to pass the $8,623 in principal onto your children? Are you kidding? This is a Democrat's plan. You don't have any right at all to the money that you earned.

Do you work hard and wish to retire someday on your hard earned savings?

Vote Democrat if you want to work hard all your life just so that you can hope to receive your share of $8,623 per year from the US government.

Vote Republican if you would like to live on $38,000 a year -- $38,000 directly from your private 401K account -- $38,000 that you have every right to, because you did the work to earn it. And, by the way, $38,000 without touching the $690K principal amount, which you could leave to your children -- if it weren't for the Democrat's Death Tax.

Informed Citizens Make Better Voters

Informed citizens make better voters. Uninformed citizens will get the government that they deserve. There is no free lunch.

More citizens should take the time to do their own research. It's easy. And you can find websites that are not biased in either direction . . . if you really want to. Here's one . . . .

Library of Congress www.thomas.gov

I have stated in an earlier post that Senator McCain attempted to push regulatory reform for Fannie Mae and Freddie Mac through Congress. As part of this effort, he warned that Fannie and Freddie posed a serious threat to our financial systems. But don't read about it here -- take the time to use the Library of Congress link and go read it for yourself. Become involved.

If you want to verify my claim, go to the LoC "Thomas" website.

In the section titled "Find More Legislation", click the link "Search Multiple, Previous Congresses"

When the new page is displayed, enter these search words, "GSE Freddie Mortgage".

To reduce the number of hits, make sure that the only box selected is the one to search the 109th congressional session. [x] 109 109th Congress

When you get the list of results, look for:
Federal Housing Enterprise Regulatory Reform Act of 2005 (Introduced in Senate)[S.190.IS]



If you continue to look, you will find additional proof that Republicans tried to push through regulation of Fannie and Freddie. Here are some hints.

2/29/2000
H.R.3703 Sponsor: Rep Baker, Richard H.

7/31/2003
S.1508 Sponsor: Sen Hagel, Chuck [NE] Title: A bill to address regulation of secondary mortgage market enterprises, and for other purposes. TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MACRelated Bills: S.1656

[109th Congress]
**HOUSE**Federal Housing Finance Reform Act of 2005 (Introduced in House)[H.R.1461.IH ]H.R.1461 Title: To reform the regulation of certain housing-related Government-sponsored enterprises, and for other purposes. House Sponsor: Rep Baker, Richard H. [LA-6] (introduced 4/5/2005) Cosponsors (19) Related Bills: H.RES.509 Latest Major Action: 10/31/2005 Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

**SENATE**Federal Housing Enterprise Regulatory Reform Act of 2005 (Introduced in Senate)[S.190.IS]

How Do I Make a Budget?

I suddenly have a problem that I never seemed to have before. I have no idea how to determine if I can afford to make a major purchase of any kind.

It used to be, that I could look at my income, then look at my required monthly expenditures, and determine how much disposable income I had. Then, my wife and I would look at the things we wanted, decide which we wanted the most, check that the price was fair, . . . and then I would argue that we should save or invest the money instead of spending it. Heck, sometimes I even won out on that issue.

But now, it seems, Senator Harry Reid tells me that there's some salesman guy out in the midwest somewhere who has come upon hard times. It seems that his income has dropped (35% ?), and his house value has dropped more than $100,000 in value since he bought it.

Senator Reid assured me, several times, that the saleman's problems were "no fault of his own". So I feel quite confident that this guy must be the best salesman ever, but his employer is a jerk and refuses to pay him what he is worth. Although I can't figure out then, why a good salesman doesn't sell his services to a new employer who will pay for his salesman services. But I'm not supposed to ask, just fork over the taxes.

And I guess that I am also not allowed to ask how much the salesman paid for his house. I'm not allowed to ask if he was smart and got a fixed rate loan so that he was sure he could afford it, or if he got an ARM. Could he have managed with a smaller, less expensive house, so that he could be sure to make the payments, or did he go for the larger more luxurious house? Did he, and the bank, calculate how much house he could afford based on his salary plus (variable) commission? Or did they use a more, uh hem, conservative approach and base his purchase on what he could afford should his income decline somewhat? And what is the big deal anyhow --- the home price goes down, the home price goes up --- what does it matter as long as you can make the payments? Does this salesman want to move, and now he won't get "enough" money for his house??

Now normally, in a polite and civilized society, I wouldn't have any right or business to ask those questions. But now, . . . well, Senator Reid and 73 other US Senators have passed a measure that states that it is I (and you) who must make up for the shortfall between what salesman can afford, and what he actually purchased.

Now, my dilemma only gets worse. My neighbor just bought a shiny new car. Normally, I would be very happy for her. I would say how nice it looked, and ask her how much she likes it, is she excited, those kind of things. Things nice neighbors say to each other.

But now, . . . well, what if she can't make the payments? Then Senator Reid's gonna show up and tell me to cough up some more money. So instead of being happy for her, I am very angry that she bought much more car than she really needed. How dare she. What right does she have to a new car, when her old car ran just fine.

I don't like being angry with my neighbor. But you see, my wife and I haven't been on an actual go-away-from-home vacation in over 10 years. We would dearly like to spend a few thousand and get away for a week. But, how am I supposed to know if I can *afford* to go on vacation???

I am very good at math, but my math skills fail me. You see, the money I earn isn't mine anymore, to spend at my discretion. Instead that money belongs to Senator Reid, to dispose of in the way he best sees fit to save the country.

The only way that I can hope to get my money back from Harry Reid is to come up with a sob story that is sorrier than the salesman's. I must then apply to Harry Reid to see if he agrees that I am a needy case, and that my story is the saddest in all the land. If I had known, I wouldn't have studied to be an electrical engineer. Instead, an actor, a writer, -- somebody who can really tell a sad story and tell it well.

I'm gonna start working on my sob story soon. But right now, I gotta go let the air of my neighbors tires. Otherwise, she's going to drive to the mall and buy more stuff using a credit card. And I have to cut the lines for her cable modem so that her kid can't go online and apply for a college loan. I hate to do these things, but I just don't know if I can afford to spend my, er I mean Senator Reid's, money on those things.