Thursday, November 6, 2008

Retirement Plans

The government will target the money in Individual Retirement Accounts. They have already started doing this with education savings accounts:

“Give us your money and we’ll give it back in fifteen years. We promise. We have the backing of the full faith and credit of the government, you see.” Smile.

The next shoe to drop will be the IRAs. The funds will either be nationalized in some form, with the money backing social security, or the tax rates on withdrawals will become confiscatory. A Fifth Amendment case could be made arguing that this amounts to the taking of private property for public use without just compensation, but would probably fail with the new round of Supreme Court justices.

Nationalization of IRAs would cause the stock market to crash as demand for stock in private companies would plummet.

America-2008 is neither more informed nor more responsible than Germany-1920s. Germany had war reparations, we have entitlement programs. Germany had industry and farms. We’ve still got the farms at least.

Wikipedia seems to have a good write-up on the Weimar Republic. My impression is that Germany acted far more responsibly then than we are now. Germany did not seem to have any ethnocentric pressure groups at the time. Should be an interesting century.

Think about paying that early withdrawal penalty. Tangibles.

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