Friday, January 15, 2010

At PJM: Substituting Government Annuities for Your 401(k)?

Here's my latest column for Pajamas Media. A sample:

The left has always hated private retirement accounts. First of all, they’re, you know, private, meaning the government doesn’t control them, and we can’t have that. Worse still, people with individual accounts aren’t beholden to a union for their retirement — although what good that does anybody who worked for a company that’s gone broke, for instance Pan Am, is a question never really answered by old-fashioned pension advocates.

From the perspective of politicians, a private account also means you can’t scare people by saying, “If you don’t vote for me, those evil Republicans will take away your monthly check.” The power to hold that (empty) threat over the heads of seniors is among the most beloved in the Democratic Party’s bag of electoral tricks, and the prospect of a populace with its own retirement money clearly drove many Democratic politicians nuts.

But above and beyond those issues, the governmental class really hates IRAs and 401(k) accounts because in their eyes such accounts take all that glorious tax money away from the U.S. Treasury. Billions upon billions, deferred for decades — or given up completely in the case of Roth accounts — money that they could be spending to buy votes. It’s unconscionable! Who do all those little people think they are?

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