European Nations Start Confiscating Private Retirement Plans!

What happens when the welfare state begins to collapse, and the government can no longer print its way out of fiscal irresponsibility? Well, in the case of five European nations, you start confiscating the citizens’ savings!

Apparently, the politicians in Hungary, Poland, Bulgaria, Ireland and France view private savings accounts as their own personal piggy banks. I can’t begin to express how disgusting (and frightening) I think this is.

In Hungry, the government is resulting to extortion to gain access to over $14 billion in individual retirement savings:

“The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). “

In Bulgaria, the government seized $60 million in private accounts. The Polish government wants to transfer a “1/3 of future contributions from individual retirement accounts to thestate-run social security system.” Ireland and France are a bit less dramatic in that they have thusfar only raided the public pension funds to bail out the rest of the government, and not yet confiscated any current savings plans.

Beside the outrage of outright theft of private property (i.e. retirement savings) of the Bulgarian, Hungarian and Polish people, even the Irish and French governments raid on public pension plans must lead its citizenry to wonder if there is even any point in saving or planning for the future.

Once the people lose hope and the ability to plan their own destiny, the system collapses.

Could this happen in the United States?

It probably won’t reach the level of depravity of the Hungarian and Bulgarian governments, but the current administration and the 111th Congress racked up record deficits and created the largest new entitlement (heathcare) in generations.. And some have already hinted at back door methods of the kind of confiscation seen in Bulgarian (see how George Miller, Teresa Ghilarducci and the End of Your 401k. ) . And the Social Security “trust fund” has long since been raided, resulting in the system we have today – people paying into the program are essentially supporting those collecting from it today.

I would argue that this is no different than forcing people to pay into the system even though they are not going to benefit from it when they retire. This is likely true for younger generations of worker, though no public official would dare to state this.

Source

Related Posts:

• Don’t Sabotage Your Retirement (Like Kris)!
• Ending America Saves Week With Advice on Saving.
• How to Save for Retirement When Your 401(k) Plan Sucks.
• Generation Y slacking on Savings?
• Up Next: A Social Security Bailout?

Up Next: A Social Security Bailout?

Yes, you read that right. The U.S. taxpayer could be on the hook yet again for another bailout in the next year or so – this time for Social Security! This according to an article by Allan Sloan (Fortune magazine’s senior editor at large).

It’s long been common knowledge that the Social Security system is deeply mismanaged, and headed for bankruptcy some time in the future, but it looks like the future may be now. A report from the Congressional Budget Office (CBO) shows that Social Security is taking in less in taxes than it is spending on benefits for the first time in 25 years.

According to Sloan’s analysis of the CBO report, the Social Security program will be $28 billion in the hole this fiscal year, which ends Sept. 30.

The current revision of the date at which the SS program begins it’s transition from surplus to perpetual deficit is the result of the recent recession, but it’s the spending in Washington D.C. that further compound the issue.

When the fund ran into the red 25 years ago, the last time the country experienced a recession of this magnitude, the problem was “fixed” by a combination of benefit cuts and tax hikes. That essentially led to a short term surplus that has now run dry.

As with some much in Washington these days, the problem is a lack of leadership. Instead of fixing the problem when they had the chance, our elected officials saw fit to use that Social Security surplus to fund other – unrelated – government spending. And now the surplus has run dry, leaving us with an under funded retirement program, and other programs un-funded since they were paid for by the surplus!

With trillion dollar deficits for the foreseeable future, a record number of Americans without jobs and a greater number of Americans forced into early retirement and newly dependent on the Social Security program, it’s hard to imagine where the money is going to come from; and quite frankly I shudder to think of the possibilities.

Time will tell if our current crop of leaders have what it takes to actually fix the problem, but given the recent spate of bailouts, reckless spending, and hikes to the debt ceiling by congress, the prospect looks dim indeed.

Related Posts:

• Is the Recession Racist?
• 70 Year Old Free Spirit Offers Lessons on Retirement Planning.
• Is Your House More Important Than Your Family?
• European Nations Start Confiscating Private Retirement Plans!
• Should I Borrow From My 401K?