Bad Ideas On "Fixing" 401(k) Plans

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The Road To SerfdomLast fall Democratic leaders started pitching ideas about removing the tax benefits for 401(k) plans on the grounds that the tax benefits of 401(k)s go "disproportionately" to high-income earners. According to some estimates, the tax breaks "cost" the government $80 billion in lost tax revenue each year.

Amazingly, some bad ideas continue to live on. Now that we are full-on in the anti-Reagan Revolution, any call for government-run programs are welcomed; personal liberty is at an early 1970s ebb. Consider the plan by Teresa Ghilarducci, an economist; she wants to take your property (in this case, money) and spread it around to others via a "guaranteed retirement account" sponsored by the Federal "gub'ment" (again, please pronunciate in your best Michigan-militia voice). Personal retirement plans would be scrapped and all would be forced into the gub'ment pension plan. The money would be run by the government and would be guaranteed to pay a 3 percent return above inflation.

What made me think of this idea, originally put forth by Ghilarducci's book, When I am Sixty-Four: The Plot Against Pensions and the Plan to Save Them, was a mention this past Sunday in Parade magazine. What annoys me is that the short story about Ghilarducci was put forth without any criticism. As the National Center for Policy Analysis notes, her plan would in effect raise taxes on savers and would allow the gub'ment to control the amount and timing of worker withdrawals. I ask: At what point does the State's interest in my life end? Must we all be made, in effect, wards of the State? How do we make any decisions at all on a day-to-day basis without a government entity directing our choices?

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