Down south of the border, way down south in a once prosperous but now broke country named Argentina, they’re continuing to struggle with an unsustainable government revenue model after decades of corruption and mismanagement. In this article by Ambrose Evans-Pritchard, we have news that Argentina is trying to breathe life into their failed government by co-opting pensions. The title of the piece isn’t an answer, but a question: Argentina seizes pension funds to pay debts. Who’s next?
In Business week we seem to have an answer: Retiree Annuities May Be Promoted by Obama Aides. The article makes the proposal seem innocuous, because its all optional, and presented as a benefit to retirees (an annuity instead of an investment portfolio), but there’s a more jaded take on it here:
401k/IRA Screw Job Coming? Now this is a guaranteed rape job.
The potential for bait-and-switch to mandatory participation may be irresistible for a government addicted to spending like none other in history. This money, of course, won’t be available for private investment, thus forestalling recovery, and digging an even deeper hole.
But they may not have a choice. The Chinese are many things, but stupid isn’t one of them. When the government can’t sell their junk to them, or to the Saudis, or to so many other “friends”, this may be the only option on the table.
But when you retire, will these investments be worth more than Monopoly money?
Update: At the request of Formercorpsman, I’ll repeat a comment here:
Rodan, bankrupting the country is a prerequisite. It’s like the gambler who “borrows” money from one friend, and that friend cuts him off, and then he “borrows” money from another friend, and that friend cuts him off, and so on. As long as there are “friends” to borrow from, he’ll gambling the money away. These annuities are a way for the government to lock IRA and 401k money up and only have to make monthly payments – it allows them to build up a Ponzi scheme that eventually must collapse.
Something else to consider – once they have your savings, and are on the hook for monthly payments for life, and they’re responsible for your health care, now it’s in their interest for you to die young.
Tags: Argentina
