The Texas 18th District Blog

 so I went to the Wall St Journal and here it is.  Click on blue heading for entire item and “Workforce Management” for more.

Are 401(k)s safe from congressional Democrats? 

If you have a 401(k) or equivalent retirement plan, you’ve probably been watching nervously the past few weeks as your nest egg has shrunken owing to the current turmoil in the markets.

Well, it could be worse. But don’t take heart, for what we mean is it could get worse. The market turmoil has some politicians on Capitol Hill eyeing the end of the 401(k) as we know it. Workforce Management reports on a hearing of the House Education and Labor Committee earlier this month:

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. . . .

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

Ghilarducci outlined her plan last year in a paper for the left-liberal Economic Policy Institute, in which she acknowledges that her plan would amount to a tax increase on workers making more than $75,000–considerably less than the $250,000 Barack Obama has said would be his tax-hike cutoff. In addition, workers would be able to pass on only half of their account balances to their heirs; presumably the government would seize the remaining half. (Under current law, 401(k) balances are fully heritable, although they are subject to the income tax.)

Sounds pretty unappealing, doesn’t it? But in her congressional testimony, Ghilarducci offered a sweetener:

Short-term I propose . . . that the Congress allow workers to swap out their 401(k) assets, perhaps at August levels, for a guaranteed retirement account–just a one-time swap. . . .

How would this work? You go back to your districts and meet up with a 55-year-old who had had $50,000 in his account last month and now has $40,000 in the account. He can swap out that $50,000, valued in August, for that guarantee of what would become, if he retires at 62, a $500 a month addition to Social Security.

A 55-year-old who lost 20% of his 401(k) because of the recent stock market decline was investing more aggressively than he should have, given his age. Ghilarducci proposes to reward this imprudence in exchange for dramatically limiting everyone’s ability to take risks (and enjoy the corresponding rewards) and for greatly increasing government control of Americans’ retirement funds.

If you want to vote against it you have until November 4.

You think my title doesn’t make sense or worse is insane.  I have been listening to TV all day hearing that bankers are not going to be making loans.  If banks don’t make loans they have no income.  With no income they can’t pay bonuses to their management nor any actual necessary business expenses such as electricity and rent.  They have to make loans.  Their business is attracting deposits by paying interest to you to let your money sit at their bank.  Then they lend it to others at a higher interest rate.  The difference in the two interest rates provies their money for business expenses.

 Back around the 1970’s banks needed money to lend.  They didn’t want to be locked in to an above normal interest rate so they offered premiums.  Literally you were offered bed sheets, coffee pots, towels etc to get you in there to open an account.

Political Cartoons by Steve Kelley

Tuesday, October 07, 2008

People didn’t trust banks.  The Federal Reserve just just raised the insured level to $250,000 to get you to put your money in banks.

Bailout comments by Walter Williams

Who will get America back on its feet?  Who will impose the socialism from which the Europeans and South Americans are struggling to rid themselves?  European view of Socialism.

Thomas Sowell - The Real Obama Part II

A Summation of Birds of a Feather

Let’s work together to put John Faulk in office. We need to elect members of Congress with strong financial backgrounds instead of lawyers who put us in this situation like Sheila Jackson Lee.

Don’t we send them there and pay them to represent us.  Sheila Jackson Lee constantly reminds us that she is on the Homeland Security Committee among others. 

As Hurricane Gustav aims for the Mississippi, Louisiana and Texas coastlines we once again worry (if not panic) about the effects.  Remember it wasn’t a direct hit from Hurricane Katrina that flooded New Orleans and caused the devastation it.  It was the failure of the levees on Lake Ponchartrain.  I remember on Sunday evening seeing Mayor Nagin and Governor Blanco telling everyone that the hurricane passed over and everything was fine.  They said they had contacted FEMA and told them officially the same.  I also remember the next day  the anxiety waiting to know if the levees would hold as the water in the lake rose from  the drainage of rain water.  They didn’t.  So 24 hours after the hurricane passed over the damage began.  Why?

Congress, the courts  and other government bodies long before Katrina made decisions that the bugs, fish and wild life were more important than the people of New Orleans. 

Read this.  New Orleans: A Green Genocide 

“As radical environmentalists continue to blame the ferocity of Hurricane Katrina’s devastation on President Bush’s ecological policies, a mainstream Louisiana media outlet inadvertently disclosed a shocking fact: Environmentalist activists were responsible for spiking a plan that may have saved New Orleans. Decades ago, the Green Left – pursuing its agenda of valuing wetlands and topographical “diversity” over human life – sued to prevent the Army Corps of Engineers from building floodgates that would have prevented significant flooding that resulted from Hurricane Katrina.”

And

 Greens vs. Levees
 ”With all that has happened in the state, it’s understandable that the Louisiana chapter of the Sierra Club may not have updated its website. But when its members get around to it, they may want to change the wording of one item in particular. The site brags that the group is “working to keep the Atchafalaya Basin,” which adjoins the Mississippi River not far from New Orleans, “wet and wild.”

“These words may seem especially inappropriate after the breaking of the levee that caused the tragic events in New Orleans last week. But “wet and wild” has a larger significance in light of those events, and so does the group using the phrase. The national Sierra Club was one of several environmental groups who sued the Army Corps of Engineers to stop a 1996 plan to raise and fortify Mississippi River levees.

The Army Corps was planning to upgrade 303 miles of levees along the river in Louisiana, Mississippi, and Arkansas. This was needed, a Corps spokesman told the Baton Rouge, La., newspaper The Advocate, because “a failure could wreak catastrophic consequences on Louisiana and Mississippi which the states would be decades in overcoming, if they overcame them at all.” “

I heard on the TV today that since Katrina, the Army corps of Engineers has reinforced the levee bases and they are expected to hold.  I believe them.  I hope I am not wrong.

Thomas Sowell’s Random Thoughts

“Now that the Senator with the furthest left voting record in the Senate and the Senator with the third furthest left voting are the Democrats’ nominees for President and Vice President, there will be great expressions of indignation over being “negative” if anyone dares call them “liberals.” Actually, leftists would be more accurate. ”

I have been drafting another post but when I read this I had to share it with you.  The guy is just so insightful and wise.  Its a breath of fresh air.

Here’s more:

“Although you can block unwanted phone calls from commercial sources, you cannot block automated phone calls from politicians, which will be inundating us this election year. Apparently the courts think that the right of “free speech” includes the right to impose that speech on an unwilling audience. Maybe we need a new Constitutional Amendment, guaranteeing “freedom from speech.” ”

“There are countries in Europe that would love to have their unemployment rate fall to the 5.7 percent unemployment rate to which ours has risen. Yet those who seem to want us to imitate European economic and social policies never seem to want to consider the actual consequences of those policies. “Unacceptable” is one of the big weasel words of our time– almost always said when the person who says it has no intention of doing anything, and so is accepting what is called “unacceptable.”"

Let’s hope we can have change, too.

Many Americans have been affected by food poison from fresh tomatoes this spring. It seems like there’s always another food contaminant we have to worry about, off our grocer’s shelves. The last big scare was spinach.

This year we decided to grow our own vegetables and I’m glad we did. We are currently pulling around 20lbs of fresh organically grown vegetables (including tomatoes) out of our garden every day.

This time the CDC (Center for Disease Control) and the FDA (Food and Drug Administration) have been involved and they seem to be no closer to finding the source (Florida or Mexico). Maybe the Federal Government doesn’t want to implicate either migrant farm works (mostly illegal aliens) or they don’t want to implicate lack of controls on the North American Free Trade Agreement if Mexico turns out to be the source.

On the other hand the FDA has repeatedly said they are understaffed and under funded. It seems like the safety of American food supply might come to the attention of NSA (National Security Agency) at some point. Our government officials finally decided to go with additional funding for the FDA, just last week. While they are pointing fingers, Americans are getting sick, restaurants are losing business, more people are growing their own gardens and the American consumer is growing more wary of products in our grocery stores, toy stores and more.

You can keep up with all the latest health, consumer and product safety information at “Government Direct” right here on John Faulk’s website:

Health

Ken