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Subject: 401k Seizure rss

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Poll
If the government seized 401k's to pay for debt would you support it?
Yes, and I have a 401k.
Yes, and I do NOT have a 401k.
No, and I have a 401k.
No, and I do NOT have a 401k.
      57 answers
Poll created by TheDashi
 
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Born To Lose, Live To Win
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As a result of a Bankruptcy filing? Yes, I think so, without giving it too much thought. I'm open to other thoughts though. This my my gut decision.
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Josh
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Who's 401k for what debt?
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Shadrach wrote:
Who's 401k for what debt?


YOUR 401k for the Federal debt.
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TheDashi wrote:
Shadrach wrote:
Who's 401k for what debt?


YOUR 401k for the Federal debt.
Oh, then no. Unless you didn't pay your taxes, then yes.
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Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?
Before this poorly written poll I had never heard of it. Sounds like political suicide, what possible justification could there be for it? At least with the stupid property forfeiture politicians try to justify it with wrongdoing.
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Oliver Dienz
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TheDashi wrote:
Shadrach wrote:
Who's 401k for what debt?


YOUR 401k for the Federal debt.


Nonsense scenario. First, no one can force the US government to pay back its back. Second, the government is the currency issuer and can pay any US$ denominated debt in any amount without seizing anything. Third, the debt is a liability of the government to the holders of US-treasuries which you will find for example in many 401K accounts. Thus, you would be taking the money that you will be giving back to mostly the same people.

I am still waiting for the day when people realize that this whole debt discussion is just a huge distraction from the things that really matter. Saving money does not prepare us for the future!

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Fears of this happening are ridiculous though.

People in both major political parties contribute to a 401k and know people who do as well.

If they performed this, they'd never be elected again and likely their own families would despise them. It is not going to happen.

The only thing that could possibly ever happen is for some type of change to occur with social security and retirement savings (ie 401k) that changes how new contributions are made to them.

I'm more prepared for an alien landing than I am of my 401k being seized (other than through the currently on the books methods of seizure through IRS lien or other legal judgment).

When people trot out this rhetoric about one party or the other, I know they've gone doubled down on conspiracy and paranoia.

You may here one person or another advocate it, but one person doesn't make change unless we put them into power or convince an entire nation that it's a good idea. And for the reasons I stated, that's not going to happen.
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Josh
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Well governments alrewdy raid pension accounts, and businesses scour 401k and pensions at their leisure...

But seriously, none of the above is okay.
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TheChin! wrote:
TheDashi wrote:
Shadrach wrote:
Who's 401k for what debt?


YOUR 401k for the Federal debt.
Oh, then no. Unless you didn't pay your taxes, then yes.


Actually since 401Ks are replacing Pensions, than NO they shouldn't be able to seize them EVEN for back taxes!!

They maybe should be able to garnish the payouts once you are retired, on the same basis that they garnish wages, but to just hit the principle should be clearly off limits. They cannot/could not hit your companies pension funds, for your taxes, for a host of good reasons. They similarly shouldn't be able to tap into pension replacement funds.

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Xuzu Horror
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As from any significant number of party members, I've only heard this from an opposing party trying to make the other party paranoid.

And, I'm never up for misleading statements so when I hear this from a candidate, I stop listening since it means they've gone full <insert expletive>.

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Just to be fully clear, as to tax liens - 401(k) is covered under the Employee Retirement Income Security Act.

So, any plan meeting IRS qualification belongs to the employer and not you (though there are protections to make sure they do not take it away either).

So, if you have language in your plan that prohibits transfer to third parties, the plan administrators could refuse to comply with the IRS lien. It just means they can though and I have no idea how often they actually do in reality.
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Shadrach wrote:
Well governments alrewdy raid pension accounts, and businesses scour 401k and pensions at their leisure...

But seriously, none of the above is okay.


What?

You seriously believe this? Do you have proof? If you do, then I highly suggest that you provide a list to the Department of Labor, because this is a serious breach of ERISA. If you think IRS audits are onerous, the DoL guys will go so deep you can see the probe coming out the other end!
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Kelsey Rinella
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TheChin! wrote:
Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?
Before this poorly written poll I had never heard of it. Sounds like political suicide, what possible justification could there be for it? At least with the stupid property forfeiture politicians try to justify it with wrongdoing.


I've never heard of it, either, and wanted to note that I responded to the poll as though you were asking about personal debt. Even in that case, I'd think there ought to be limits--if we take enough that people will be dependent on government assistance in old age for even the most basic needs, that seems counterproductive.

But I can think of several policies I'd think at least acceptable (if not actually wise or worth pursuing) which could be characterized this way. One would be a change in the tax laws which taxes future contributions to a 401k (or 403b, which is what I actually have, but is essentially the same thing) at a low enough rate that it's still a tax advantage over taking it as income, but less of one. Another would be to make 401k plans non-inheritable by heirs other than spouses, or to tax them at a higher rate or lower threshold than the usual estate tax. I can even imagine just directly taxing someone based on the size of their 401k, if that 401k is very large. The point of the system is security in old age, not providing a tax-free home for investments unrelated to that purpose.

That's probably not even an exhaustive list. But the way the question was posed pushed us to think about this as a purely black-and-white issue, and there are a lot of shades of grey in there.
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chrisnd wrote:
Shadrach wrote:
Well governments alrewdy raid pension accounts, and businesses scour 401k and pensions at their leisure...

But seriously, none of the above is okay.


What?

You seriously believe this? Do you have proof? If you do, then I highly suggest that you provide a list to the Department of Labor, because this is a serious breach of ERISA. If you think IRS audits are onerous, the DoL guys will go so deep you can see the probe coming out the other end!

Yeah, 401k is very different than a pension. Corporations do not touch 401k accounts, ever. They do play accounting rules with pensions, but that is a different thing entirely. A 401k account is owned by the individual, corporations cannot touch them. Now if you are dumb enough to invest your 401k in the stock of the company you work for, well that is your problem if the company goes bankrupt.
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Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?


Link, please?
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chrisnd wrote:
Shadrach wrote:
Well governments alrewdy raid pension accounts, and businesses scour 401k and pensions at their leisure...

But seriously, none of the above is okay.


What?

You seriously believe this? Do you have proof? If you do, then I highly suggest that you provide a list to the Department of Labor, because this is a serious breach of ERISA. If you think IRS audits are onerous, the DoL guys will go so deep you can see the probe coming out the other end!


Yeah I could be entirely wrong on the 401k. I was relating anecdote on that and could have been misinformed. Pensions I'm keenly aware of though.
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wifwendell wrote:
Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?


Link, please?

If you search for "government seize 401k" the first result is Infowars, so I'm sure Drew's got some pretty legit links.
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damiangerous wrote:
wifwendell wrote:
Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?


Link, please?

If you search for "government seize 401k" the first result is Infowars, so I'm sure Drew's got some pretty legit links.


Weird...the very first link I got was from those whack-jobs at Forbes:


http://www.forbes.com/sites/nextavenue/2012/12/29/watch-out-...


That one in particular talks about how various liberal think tanks want to limit the 401K since they "cost" (love that word) the government money.


I can dig up some others from Democrats (and I think a few Republicans, though it's been a while since I saw anything about it) proposing to seize 401Ks if you ask nice though.



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Ferretman wrote:
damiangerous wrote:
wifwendell wrote:
Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon. Are they doing it again?


Link, please?

If you search for "government seize 401k" the first result is Infowars, so I'm sure Drew's got some pretty legit links.


Weird...the very first link I got was from those whack-jobs at Forbes:


http://www.forbes.com/sites/nextavenue/2012/12/29/watch-out-...


That one in particular talks about how various liberal think tanks want to limit the 401K since they "cost" (love that word) the government money.


I can dig up some others from Democrats (and I think a few Republicans, though it's been a while since I saw anything about it) proposing to seize 401Ks if you ask nice though.

The reality is and has always been that if everyone saved enough for retirement no one would have enough money for retirement. From an economic standpoint it makes far more sense to use a tax to transfer money from the workers to the retirees. The only issue is that such a system doesn't work all that well when there is a huge imbalance between the number of workers vs the number of retirees.

Of course, saving/investing doesn't work when there is a huge imbalance between the number of people working and the number that are retired either. The basic idea can easily be demonstrated by giving everyone $2 million. No matter what they do with the money it isn't going to be enough for them to not work as the costs of everything just go up until people run out of money and have to start working. In the end, there always has to be a balance of workers and retirees and there is no magic way to change that.

Whether retirement is paid for via intergenerational transfers or paid for by saving/investing it amounts to exactly the same thing, except in the saving/investing method you have a huge amount of inefficiency. In theory 401k or other retirement savings accounts provide capital which can then be used productively, but there is such a massive surplus of capital today that extra savings really aren't economically useful. We are better off just spending our money on consumption which results in increasing the size of the economy instead of saving/investing which does not increase the size of the economy.
 
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sfox wrote:
The reality is and has always been that if everyone saved enough for retirement no one would have enough money for retirement.


I'm afraid I must reject that premise....can you cite some stats for it? How does my saving money for retirement in any way impact your saving for retirement, or 'lessen' your money (or its value, which I think is what you're really saying)?

sfox wrote:

From an economic standpoint it makes far more sense to use a tax to transfer money from the workers to the retirees.


That assertion is dependent on the validity of your first statement, which hasn't been backed up yet as near as I can tell.

sfox wrote:

The only issue is that such a system doesn't work all that well when there is a huge imbalance between the number of workers vs the number of retirees.


This I concur with--it makes sense from a strict numbers sense, not working anything back of the envelope here.

sfox wrote:

Of course, saving/investing doesn't work when there is a huge imbalance between the number of people working and the number that are retired either. The basic idea can easily be demonstrated by giving everyone $2 million. No matter what they do with the money it isn't going to be enough for them to not work as the costs of everything just go up until people run out of money and have to start working.



I don't think there's any particular evidence of that....cite?

sfox wrote:

In the end, there always has to be a balance of workers and retirees and there is no magic way to change that.


This is roughly true, I agree.



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Ferretman wrote:


Weird...the very first link I got was from those whack-jobs at Forbes:


http://www.forbes.com/sites/nextavenue/2012/12/29/watch-out-...


That one in particular talks about how various liberal think tanks want to limit the 401K since they "cost" (love that word) the government money.


Do you understand that "considering limits on tax breaks for 401(k)s" does not equal "seize everybody's 401(k) money bwahaha"?
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wifwendell wrote:
Ferretman wrote:


Weird...the very first link I got was from those whack-jobs at Forbes:


http://www.forbes.com/sites/nextavenue/2012/12/29/watch-out-...


That one in particular talks about how various liberal think tanks want to limit the 401K since they "cost" (love that word) the government money.


Do you understand that "considering limits on tax breaks for 401(k)s" does not equal "seize everybody's 401(k) money bwahaha"?


See, this is why I put it in my list; it seemed like the sort of thing partisans might describe that way when they're willing to lie to make things sound bad.
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Oliver Dienz
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Had just posted it but it also applies in this thread:

At any point in time there is a part of the population working and producing ALL the output that is being consumed. The other part of the population is not working but still consumes SOME part of the produced output. Thus, the workers need to produce a SURPLUS that is then consumed by the non-workers. This relationship can be expressed in a model (e. g. Diamond OLG) in which the workers save some of their income (reducing their consumption) and then live off those savings when retired. What savings means here is that they accumulate claims towards the following generations on their produced output.

That is the way retirement works in a monetary economy. It does not matter whether we talk about public saving (Social Security) or private saving (IRA etc.). It would only not be true when the workers would accumulate durable consumption goods (instead of financial assets) that they would then solely consume when retired.

What matters then is not the total amount of financial assets (= total debt) available in a society but their distribution. That means how much of the output one generation can consume versus another. If a society needs to prepare for a drop in the working population it needs to realize that this is not a financial problem. Instead, it has to ensure that the future workers have a higher productivity that the output will remain the same/increases. To increase productivity investment in labor (e. g. education, healthcare) and real capital (e. g. plants, infrastructure etc.) are required. Saving money (= spending less) is the exact opposite and will therefore exacerbate the problem of a declining workforce.

The biggest fallacy of our time is the thought that we can prepare for the future by saving money. What is true on an individual level falls apart when you look at a society as a whole.
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Drew1365 wrote:
Over the last several years, Democrats have frequently floated this trial balloon.

If this occurred "frequently", I'm sure you have links to back it up?
 
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