Yesterday The Hill reported that "the White House and congressional Democrats, with the backing of the AARP, will soon put forth a plan to automatically enroll new private-sector employees in investment retirement accounts (IRAs)."
The concept is that this move would encourage savings. The program would have tax benefits, but it is unclear whether they would be typical IRA tax-deferred accounts or Roth-type accounts where the income placed in the accounts is taxed, but there is no withdrawal tax.
I guess my suspicious nature has come into play here. This is the Administration that has taken away the Health Savings Accounts, which were tax-free and saved families money on healthcare. Since the AARP betrayed its members in the healthcare debate, I tend to be suspicious of anything political they may be involved in. I am also aware of what happened in Argentina two years ago.
According to the Wall Street Journal on October 23, 2010:
"Argentine President Cristina Kirchner announced this week that her government intends to nationalize the country's private pension system. If Congress approves this property grab, $30 billion in individually held retirement accounts -- think 401(k)s -- managed by private pension funds will become government property."
We need to be aware that this could happen here. We also need to be aware that after Argentina seized the 401k's, emerging market investors considered Argentina as one of the worst places on the planet to put your money.
At some point, it will become obvious that the Laffer Curve is the answer to our economic woes. I just hope we figure that out before our country is bankrupt.
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