The U.S. Consumer Financial Protection Bureau (CFPB) is weighing whether it should take on a role in ‘helping’ Americans manage the $19.4 trillion they have put into retirement savings.
It’s been discussed for years that at some point, they’ll launch new regulations funneling a substantial portion of US retirement savings to ‘the safety and security of government bonds.’
The excuse for this self-assumed “role in helping” us manage our retirements accounts is that the private sector should not be trusted:
“The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams,” according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.
According to Bloomberg, the retirement savings business in the U.S. is dominated by a group of companies that handle record-keeping and management of investments in tax-advantaged vehicles like 401(k) plans and individual retirement accounts. The group includes Fidelity Investments, JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW) and T. Rowe Price Group Inc. (TROW).” Americans held $19.4 trillion in retirement assets as of Sept. 30, 2012, according to the Investment Company Institute, an industry association; about $3.5 trillion of that was in 401(k) plans.
Well, no one needs to wonder if they have fallen prey to a scam, because there is no reasonable doubt about it—they have! The scam is called Social Security. Another is called Medicare. Yet these people are going to be trusted to protect us from scams?
I don’t think this should be debatable: the group that encourages us to trust in Social Security is not going to protect our interests if they take over the management of our retirement accounts. This is just a new larceny. They’ve tapped out their old ways of pillaging us and are now looking for a new way.
The math is quite simple. The US government is $16.4 trillion in debt, and will be running $1+ trillion deficits for five years in a row. And the pool of retirement savings is irresistible. The obvious concept is that when the government runs out of money, or they face a drying up in interest for its debt, they will come for the $19.4 trillion in American’s retirement accounts. It seems that day may be finally drawing near.
The idea has been bandied about before in Washington, though this is the first time that a sitting agency chief has publicly announced the intention. According to CFPB director Richard Cordray, “[Overseeing retirement accounts] is one of the things we’ve been exploring and are interested in in terms of whether and what authority we have.”
From Argentina to Ireland, seizing pension and retirement accounts has been a popular tactic of insolvent governments since the start of the financial crisis. Why should the world’s largest debtor be any different?
Yes, there are evil men in the world who will occasionally prey on helpless, defenseless people. Yet aside from slipping in the shower, the far more prevalent danger is the consistent threat that an insolvent government poses to our opportunities, our liberties, and our savings.