Monday, October 27, 2008

Who is Teresa Ghilarducci?

Although unknown to most Americans, Teresa Ghilarducci is the intellectual godmother for the Democrats' plans to radically change how Americans save for retirement. Ms. Ghilarducci, an economist at The New School for Social Research, called for the abolition of the tax breaks given to employers for 401k plans and instead proposed the mandatory enrollment of American employees in Government Retirement Accounts (GRA's) that are funded by a 5% mandatory payroll deduction in her book, When I'm 64: The Plot Against Pensions and the Plan to Save Them, published last year.

Ms. Ghilarducci outlined her proposals in a briefing paper nearly a year ago:
"The plan calls for all workers not enrolled in an equivalent or better defined-benefit pension to enroll in a GRA, a plan that borrows the best features of defined-benefit and defined-contribution plans, including guaranteed retirement benefits that last a lifetime, low administrative costs, and steady contributions. With GRAs, workers will accumulate savings in investment funds that earn a rate of return guaranteed by the federal government. These funds will be converted to life annuities upon retirement. Along with Social Security benefits, these will replace approximately 70% of pre-retirement earnings for the typical retiree.

Guaranteed Retirement Accounts eliminate the regulatory and tax law favoritism that not only gives 401(k)-type plans wide discretion and little scrutiny, but does so at the expense of the defined-benefit system.....

Guaranteed Retirement Accounts are like universal 401(k) plans except that the government, as befits a large and enduring institution, will invest and manage the pooled savings.

Contributions equal to 5% of earnings are deducted along with payroll taxes and credited to individual accounts administered by the Social Security Administration. The cost of contributions is split equally between employer and employee. Mandatory contributions are deducted only on earnings up to the Social Security earnings cap....

The pooled funds are conservatively invested in financial markets. However, participants earn a fixed 3% rate of return adjusted for inflation, guaranteed by the federal government.....
Participants who die before retiring can bequeath half their account balances to heirs; those who die after retiring can bequeath half their final account balance minus benefits received... "
Briefing Paper on Proposed New Government Retirement System

The rest of her plan is more of the same as the esteemed professor calls tax breaks for 401k plans a wasteful expense, claiming they cost the government $80 billion a year in tax revenue. She considers $80 billion in a $2 TRILLION budget "extravagant" while ignoring the fact these plans ARE taxed upon withdrawal of funds.

One benefit of 401k plans she seeks to change is ownership of the retirement funds. Currently 401k funds are the property of the employee (after becoming fully vested). If he dies, his heirs receive ALL of his money saved for retirement, minus any taxes. Under Ms. Ghilarducci's plan, surviving family members only get HALF of what remains in the account with the rest going back to the government. Consider this example: an American works for 40 years, builds up a nest egg in his GRA of $100,000 and suddenly dies from a heart attack. His wife will only receive $50,000 as the government will seize the money he earned and contributed to his retirement under this plan while the detached ivory-tower thinking of Ghilarducci and government-first philosophy of the Democrats consider such thievery to be "fair".

Unfortunately, Ms. Ghilarducci ignores the the effect her plan will have on financial markets when such a massive amount of 401k funds are transferred to the federal government. The current crisis in our markets will seem mild as they collapse from such a withdrawal of capital. Instead of addressing this very serious concern, she blithely says any injury caused to the worker can be prevented with a tax credit and says the government "conservatively invest" the money contributed to GRA's. One can only imagine the mischief this will create as it gives government further control over the markets and private businesses.

Democrats will seize upon this opportunity to impose conditions on funds receiving government investments as it does for corporations doing business with the federal government: Labor conditions. Environmental regulations. In what countries and types of business does a fund invest its money? Preferred investments and projects by favored political pals (Teamsters pension fund ring a bell?) will be a tempting target. Diversity guidelines. The list goes on as GRA's will inject the government into the economy in ways unimaginable only a few years ago.

Such a scenario is not far-fetched as House Democrats are currently discussing enacting legislation doing exactly what this liberal economist proposes: forcing the involuntary transfer of 401k retirement funds into government coffers. Investment news reported they recently held a hearing to examine "proposals to overhaul the nation's $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute
" Earlier Post on Democrats Seizing 401k Plans

Mr. Miller had his own comments for the 401k tax breaks: "“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings..." Another Kingfish Post on Dem's Seizing 401k Plans.

The playbook is familiar: Democrats will use the worn out mantra about stopping tax breaks for the rich, protecting the little man on the street, etc., then fast-track legislation effectively abolishing private retirement accounts, moving most private retirement funds into the government cookie jar. The victims will receive no right to their money but instead an IOU from the government for an annuity as the government does the same for Social Security and FDIC. Meanwhile, liberals will celebrate, proclaiming they succeeded in protecting the middle class when in reality they reached their goal of enslaving everyone.

This is their idea of change.

Note: Listened to Mark Levin tonight who oddly enough, interviewed Dr. Ghilarducci. She said she wanted to "nationalize" 401k plans. No spin, no out of context, she said that was exactly what she wanted to do.

Related Post:
Are Your 401k Plans Safe From the Democrats?

Additional reading:
Ghilarducci NY Times Essay
Money Magazine Article
Washington Post Article on Ending 401k Plans

Additional note: Believe it or not, Limbaugh actually nailed the essential elements of her plan on the radio today. As I've read her policy paper, I can confirm that everything Limbaugh wrote about her plan is true. Nice to see he caught up with The Kingfish Limbaugh Analysis

3 comments:

Grumpy Old Man said...

Right on brother, I agree

Anonymous said...

She lays out her government-run plan in this video... it takes her 20 minutes!!!

Sandie said...

Is this the type of 'tyranical government' that our 2nd Amendment is supposed to help us to protect ourselves from? Things are creeping up at a never ending insidious pace that will confiscate all that our forefathers fought for, and we will have allowed it to happen because we couldn't detect the imperceptible changes. We were not vigilant, and got complacent in protecting our freedoms. People! We can't let this happen! Get with a TEA Party group - organize in your communities! We must fight this! Spread the word - email this piece to everyone on your email list.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


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Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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