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Pushing Aside 401(k)’s for Mandatory Savings Plans

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Pushing Aside 401(k)’s for Mandatory Savings Plans

Tony James and Teresa Ghilarducci are unlikely allies. He is president of Blackstone, the giant private equity firm; she’s a labor economist who has long advocated replacing 401(k)’s with a universal, federally managed saving plan.

But the two have teamed up to push what they are calling Guaranteed Retirement Accounts, a government-sponsored plan that would require participation and contributions from any employer without its own 401(k). They both view the 401(k) defined contribution retirement system as a faulty experiment that covers too few workers, generates inadequate savings and replaces too little income in retirement.

“There’s really no alternative,” Mr. James argues. “It needs to be mandated.”

More at the link

It warms my heart to know the president of Blackstone is looking out for us.

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Teresa Ghilarducci has been looking for a way to federalize and control the $20 Trillion in US retirement assets for a long, long time. BlackRock is on board, because they can manage the "accounts" and take home a nice fee on the assets. And that's a lot of assets under management, even if they only get half of it. Ghilarducci needs BlackRock to lend credibility to her plan to steal people's money. It's pretty much that simple.

And when they control your retirement funds, they dictate how they are invested. How's about a boatload of US treasuries for you, young man. Uncle Sam needs you to buy some t-bills, he's good for it. Full faith and credit on the backs of your working neighbor and children, son.

I look forward to the day when people like this are permanently affixed to a lamppost. Perhaps bronzed, so it can last forever in memorium.

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"federally managed saving plan"

Not sure what this means but the government will screw it up.

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"federally managed saving plan"

Not sure what this means but the government will screw it up.

Furthermore, where does the government get the Constitutional authority to mandate that people have to save money towards retirement?

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Furthermore, where does the government get the Constitutional authority to mandate that people have to save money towards retirement?

It's a tax, man. Everything is a tax, if they want it to be. And they claim unlimited power to tax you into slavery.

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I read a letter tonight from a well known insurance company (this is auto) telling the client to get the new app and save 5 percent (just for that - wow!). Because they can track how much you drive and get you discounts. Oh, goody.

"They" are going to take care of us, just allow them. WTF. All of they.

How can they take care of us when they dick it up faster than they can figure out a new way to dick it up even further.

FUBAR :-)

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This could go in Screwballs thread about how difficult it is to start a business.

This would be another large expense for us.

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Because the government has handled the social security trust fund so well ...

Oh hell no.

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Because the government has handled the social security trust fund so well ...

Oh hell no.

No, that's fine. There is this box somewhere with all this money in it so when they need it they just unlock the box and money flies out. It's magic. :-)

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No, that's fine. There is this box somewhere with all this money in it so when they need it they just unlock the box and money flies out. It's magic. :-)

I can't see the big financial firms going along with this scheme. It diverts too much cash away from their control.

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I can't see the big financial firms going along with this scheme. It diverts too much cash away from their control.

I think the opposite. I think they would line up to get a bite of that apple.

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I can't see the big financial firms going along with this scheme. It diverts too much cash away from their control.

They will find a way to get a (bigger) piece of it. They will anyway as all transactions have to go through one of the 21 (or 22) broker-dealers; which are the big firms anyway (bonds or whatever instruments they use will trade through the markets). Also, given the potential size, they can throw all that in a dark pool for the high frequency trading guys to pillage, while they charge them to steal our money.

Win, win. :-(

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I think the opposite. I think they would line up to get a bite of that apple.

They are probably behind it now. They truly rule the world.

Doing "God's work" as Lloyd Blankfein would say.

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Yeah, these firms will charge the government a few points to manage the funds. It wont be a huge amount at first. But after 20-30 years you will be talking about hundreds of billions, possibly a trillion dollars. I would take 1% of that every year.

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I think the opposite. I think they would line up to get a bite of that apple.

Like Obamacare where we pay "taxes" directly to private companies primarily for their profit? Probably right. Ugh.

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Like Obamacare where we pay "taxes" directly to private companies primarily for their profit? Probably right. Ugh.

Absolutely.

Requiring everyone to save for retirement would increase the amount of money being invested significantly.

Even if firms charge less to manage the funds than they currently do, they will make more if they are managing 5x or 10x more money

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The first red flag should be the name; Guaranteed Retirement Account.

Nothing is guaranteed. Each and every investment (worth considering) has the disclaimer:

“Past performance does not guarantee future results.”

How many underfunded retirement accounts do we have now (for those who don't know - A LOT)?

And personally, I don't want a hedge fund anywhere near my money. Especially this one.

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Like Obamacare where we pay "taxes" directly to private companies primarily for their profit? Probably right. Ugh.

Oh, no, not at all (the last line of the article):

“I think we can sell it because it’s not a tax,” he said. “The G.O.P. does like the idea of people taking responsibility for themselves and not relying on the government.”

Dummy us. ;-)

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