by John Galt
November 30, 2012 05:00 ET
IF anyone within the sound of my voice, the view of my pages, or with even the most remote of memories about the past five years, today’s Rush Limbaugh show will provide a stunning flashback into what I was warning about in 2007 and 2008 along with the “Talkmaster,” one Neal Boortz out of Atlanta via his syndicated radio program. More on the background later, first a brief video of the “economist” who created a plan for a mandatory national retirement program, one Teresa Ghilarducci via YouTube from May 11, 2009:
Bad enough? Nah, she’s the lightweight and irrelevant one regarding this discussion. For a true understanding of the idea behind nationalizing everyone’s retirement account unless they are a member of a union pension program, a brief historical review of the circumstances which created the impetus for this proposal.
In late 2007 the evidence of an impending economic collapse was about the most obvious event on the horizon for everyone except the blind, ignorant, or willfully born with the stupid DNA as part of their genetic heritage. Beyond the obvious signals such as distress within the real estate industry unseen since the 1930’s and structural deterioration of the financial industry, politicians were observing a futile effort by the Federal Reserve to preserve asset prices in the face of a massive deflationary tsunami and those attempts were not only failing on a monthly basis, but by mid 2008, an almost hour by hour deterioration and collapse of various programs to stem the crisis de jour. Needless to say every effort ended up a complete failure culminating with a massive stock and commodity crash which wiped out trillions of dollars of America’s wealth.
During this crisis, the Democratic Party Caucus concocted an idea which involved the nationalization of 401K’s, IRA’s, and other retirement instruments. The idea was purely political to seize control of the assets to “bail out” Social Security and provide a guaranteed return for all American citizens in their golden years, even if the retirement age is eventually extended to one hundred and two. The initial program was concocted by a tax evading Congressman from New York, one Charles Rangel and the Botox Queen of California, Nancy Pelosi. The idea was to provide a guaranteed return of 3% plus the official Bureau of Labor Statistics Consumer Price Index calculation for that year. The idea was to exploit the declining stock market and unpopularity of the Bush administration by offering a “reset” which put everyone who voluntarily participated in the program (eventually to become mandatory) a pass by setting the valuation of the participant’s account back to the original value on the selected date (i.e., December 31, 2008).
The proposal was shelved however, once it became apparent just how impotent the G.O.P. was and the incompetence of their Presidential nominee during the summer and autumn time period of 2008 as the crisis accelerated. By saving this idea for a later time, the Democrats would simply accelerate and encourage the Republicans to continue on their path of self-immolation until “their man” was President of the United States.
Fast forward to the past few days and articles which suddenly started to appear as the political elites banter about the “fiscal cliff” and perceived crisis which would follow:
Does Government Want To Drain Americans’ 401(k) Plan? - Investor’s Business Daily
The 401(k) Is a $240 Billion Waste – The Atlantic
Fiscal Cliff: Why Congress Might Have to Mess with the 401(k) – Time Magazine
And finally, Rush Limbaugh’s take during his ratio program from his website:
The final story provides a little enlightenment as to why Professor Teresa Ghilarducci is now being used as cover for the proposal; if Pelosi’s or Rangel’s name were attached to such an idea it would immediately become radioactive and create a firestorm of opposition. The Democrats and Progressives have learned the methodology known as the “Chicago Way” from the Obama regime and now understand that using their propaganda arm, the media, to soften the beaches for such a drastic proposal is a necessary evil for the dumbed-down masses.
Thus the socialized healthcare approach has begun with the “oh the poor have no real retirement” and “it is not fair that the wealthy have a good retirement and the middle class gets the crumbs,” and other such tripe. The initial softening is not enough to raise the ire of the population at this time and the drastic final curtain call must come down in my opinion to implement the nationalization of American citizen’s retirement accounts.
At this very moment, President Obama is grinning like the proverbial Cheshire cat. By carefully manipulating the ignorant and cowardly Republican leadership into an agreement to raise the debt ceiling, he created the fiscal cliff opportunity just when it was needed after his re-election. The President can ignore the pleas of the GOP and hold steady to his demand for higher taxes on the wealthy only while refusing to cut any spending other than in the Defense Department. Thus odds are better than 75-25 that the GOP will hold firm, receive the blame for the nation going over the fiscal cliff of their own design and the resulting economic downturn.
Yes, as in massive recession.
Starting in January 2013, de facto capital controls will be in place (see If You Can Get out of the United States, I would suggest you GET OUT NOW), payroll and numerous other taxes will increase on wage earners, and the upper income brackets will endure a 44.8% effective tax rate which does not include state taxes, increases in the estate tax rate, and proposed fees to be imposed on investment vehicles still winding their way through the bureaucracy. After two months of pain from the increased witholding from paychecks and a rapid decline in equity prices that I project will be 18-34% from current levels the American public will freak out demanding action to save their retirement and stop the economic contraction.
This is the only opening that the Democrats will need to strong arm the Republicans into an absurd piece of legislation which will encompass everything from guarantees for union and government pension programs to expansion of Social Security benefits. In the end, no matter what is said or done, the Republicans will cave as they have done with Obamacare funding and fail to prevent their weak progressive arm of the party from following the Democratic leadership like lemmings off the cliff. The myth that the Obama legacy will be impacted needs a rapid refresher to the reader as can anyone reading this piece remember any actions Obama took in March of 2009? The majority of Americans do not and could care less as long as their retirements are made whole, their paychecks restored to healthier levels, and the price of iThings is affordable or can be financed with Federal Reserve funny money.
Amazingly enough, unlike the reaction of the citizens of Argentina where they started bombing Citibank ATM’s in retaliation, most Americans will bleat like sheeple as long as their television schedule is unimpeded and their iPad WiFi connections are still free.
The question then becomes one of managing the trillions of dollars of investment instruments the government seizes and what rate of compensation those firms would receive. To find out the most likely participants in such an arrangement, simply look up the Wall Street firms which donated to the Obama campaign and who just happen to be Primary Dealers for the Federal Reserve Bank of New York. The deal is too sweet for the Fed as their firms can now boost their balance sheets and launder more bad debt by simply labeling it as AAA paper and putting into the massive government retirement pools. After all, who within the U.S. Treasury would dare to question the viability of a $14 trillion account managed for the government by Wall Street’s best and brightest?
As far-fetched as this idea is, five years ago, socialized healthcare in America was considered laughable. If one takes a moment to review how nationalizing all of the retirement programs could cure several problems at once, it becomes a logical and potentially nightmarish scenario:
1. Cures the solvency issues of major financial institutions.
2. Provides the illusion of solvency for the Social Security program.
3. Gives American citizens the false perception that they will have a solvent and safe retirement vehicle with no taxation or management concerns as the government takes care of everything.
The unforeseen final benefit for those in power, especially those at the Federal Reserve and central banks around the world is that by seizing these assets, America will appear to be stable enough to take a leadership role in the establishment of an I.T.U. (International Trade Unit); also known as a single world currency.
Of course, once you have a single world currency for nations to participate in, a one world government to manage it must follow.