Parasites to Seize 401(k)s

October 24, 2008 at 8:10 pm 1 comment

I’ve described, at great length and with detail, what is wrong with Social Security. The core issue is inflation brought about by a combination of fiat currency and a government that wants to spend (get power) with taxing (suffering consequences).

The inflation creates a situation where the only way to pay for social security (which would otherwise work just fine) is to have an infinitely expanding tax base. Obviously, this is impossible; and if anything the pool of people being taxed has shrunk over the years until, if Obama’s latest proposals are enacted, the majority of voters will finally draw more from government than they contribute. So in such an environment, and when faced with the prospect of having to repudiate their communist principles in order to set things right, legislators are prone to opt for measures that are even more communistic and draconian than those that already exist.

One thing you can count on is that the commies always wait for an ideal opportunity to strike — and right now, with the market down and people having short memories, they see such an opportunity.

Over the long run, the stock market has been the most worthwhile investment a person can make. If you had invested $1,000 in blue-chip stocks in 1982, despite the ups and downs of the market, you would have over $8,000 today. If you had put that money in a savings account at 3% interest, you would have about $2,200 today. If you had put that money in gold, you’d have around $2,500 today.

In other words, historically, when money is invested for the long term, the single best place a person can put money is in the common stock of solid companies. It’s just that simple.

But most people don’t have a long time horizon. All they know is that their 401k is worth 33% less than it was a year ago. In their mind, they have “lost” that money; which shakes their confidence in the stock market as a whole. This is especially the case for people who are close to retirement age and are much more interested in security. Though, I should point out, well-proven investment strategies have long advocated that the closer you get to retirement age, the less of your money should be in stocks. That’s because, taken on the short term, stocks are quite volatile — they’ll gain or lose 10% in a day. As you get closer to retirement age, the risks of volatility outweigh the benefits of gains, and smart folks move their money from stocks to either bonds or even money market accounts.

Either way, many folks aren’t knowledgeable about that stuff, and are either unnecessarily worried about their current portfolio value or left their money in stocks right up until the time to retire. So, in their minds, they’ve been fleeced — even though, taken over the long range, anyone who has been saving for 30 years via the stock market has had returns more than double the compound rate of even real inflation. (Real inflation is 5% higher than what the government reports.)

So they are ripe for the next attack. That next attack from the commies cuts right to the core of wealth by putting 401Ks under the Social Security Administration and giving back a “guaranteed 3% annual return, adjusted for inflation.” In addition, 401Ks would no longer be tax deductible and when you died, half of it would be seized by the government. No, I’m not kidding. Just look at this article.

When you see the article, the language used by proponents of this plan and their Democrat/Communist partisans should make your blood boil. They talk about the fact that 401K contributions are deductible as being a “government subsidy.” It’s only a subsidy under one condition: that everything I earn belongs to the government by right. And there is only one form of government where this is true: communism.

Let me make it clear to these communist idiots: Hey! Commie Idiot! What I earn is mine! Everything taken from my paycheck subsidizes YOU. You are subsidized by my hard work. Or, to put it another way: I am productive and YOU are a parasite. Letting me keep what I have earned by the sweat of my brow is not a subsidy, it is JUSTICE. And de-funding your miserable existence on the back of hardworking people would likewise be JUSTICE. Be careful how far you push the goose that lays the golden egg.

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Entry filed under: Economics. Tags: , , .

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1 Comment Add your own

  • 1. ???  |  January 19, 2009 at 10:45 pm

    yes, a graduated income tax is one thing the old timers fought so hard against…Any income tax is a communistic ideal going all the way back to Hammurabi ! The old 10% of all grain goes to the state..

    Reply

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