Back in 2008, Argentina nationalized $30 billion worth of assets under the guise of “protecting” the people from the perils of a volatile capitalistic system. Less than two years later, what is the Argentinean government doing with that private money that it has now seized? It is using those nationalized pension funds to finance its current spending. No surprise there.
Portugal then confiscated $7.5 billion of private pension funds Nov. 2, 2011, as a last-ditch effort to meet its deficit targets.
More recently, Poland said in September of this year that it will transfer to the state many of the assets held by private pension funds to slash public debt.
It begs the question, could it happen here?
Although there has been much hype and ballyhoo about such evil plans hatching here, only discussion revolving around the fringes have actually taken place in Washington.
It is thought the rumors lead back to a Nov. 4 report posted by the Carolina Journal, a publication of the John Locke Foundation of Raleigh, N.C. Its headline proclaimed, “Dems Target Private Retirement Accounts: Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs.”
What the headline claims is frightening, but nowhere can I find such radical discussions actually taking place in the ivory halls of Washington.
What this article actually refers to is more of an overhaul of current IRA rules and deduction limits, but no mention of downright confiscation exists. There has been other hearings on revamping some IRS rules on IRAs and 401(k)s but so far most of this, at least on the surface, appears to be fairly benign.
Even President Obama mentioned limiting IRA tax deductions based on a maximum annual annuity yield, and although talk of this sort is disturbing to many Americans, so far there is little bite in the bark.
What are we to make of all of this?
Although no concrete plans or legislation exist today to rob you of your retirement funds, these things have a habit of starting small, then gathering momentum during a crisis.
Americans should remain vigilant to any and all discussions revolving around a forced restructuring of our private funds over which we have full control under the current system.
But take heed, where trillions are, the hands of politicians are sure to follow.
As the financial condition of the U.S. government continues to deteriorate under ballooning deficits, the temptation to tap those funds can only increase.
This article expresses the opinions of Marc Cuniberti. He hosts “Money Matters” on KVMR FM 89.5 and 105.1 FM at noon Thursdays and syndicated on more than 30 radio stations throughout the US. His website is www.moneymanagementradio.com.