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    Government Workers Don't Trust Government! Own Your IRA or 401k

    08/19/2013
    Personal Freedom and Prosperity 102: Acquiring and Possessing Property

    That all Men are born equally free and independent, and have certain inherent natural Right…; among which are the Enjoyment of Life and Liberty, with the Means of acquiring and possessing Property, and pursuing and obtaining Happiness and Safety. —Virginia Declaration of Rights (1776)

    Indispensable to personal freedom is the liberty for each person to choose how to allocate and invest their time, labor and money as well as to own the gains made by these investments.

    Government Workers Don't Trust Government!  Own Your IRA or 401k

    The Salon headline says it all:  Don’t take my pension!: The looming public worker nightmare  

    Adam Levitin. a professor of Law at Georgetown University, reviews the history and legal rulings concerning bankruptcy and public employees' pensions.  In a nut shell, the courts have yet to definitively rule on the rights of retired government workers.  It is probable, however, that secured creditors could prevail over the nonsecured pensions, and public employees could end up being the big losers in this mess.  Additionally, there exists no federal insurance for government workers. Professor Levitin explains that municipal governments deliberately lobbied against being part of a federally mandated insurance system for pensions.  The logic was municipal governments could always pay their promised pensions by increasing taxes.  Levitin explains:

    The logic was simple: Outside of bankruptcy, the Contracts Clause of the federal Constitution and frequently state constitutional provisions or other state laws prohibit municipalities from reducing their pension obligations, and real municipalities never filed for bankruptcy. Ergo, municipal pensions were safe.

    However, the logic was wrong and many cities, counties and states have enormous pension obligations that they cannot honor – they are bankrupt.  Levitin strongly urges the federal government to retroactively include the government pensioners into the Pension Benefit Guaranty Corp. (PBGC). 

    The PBGC has funding requirements and taxes private pension plans to partially guarantee defunct privately, defined benefit pension plans.  Levitin claims adding municipal employees would cost very little.  Most likely, this is wrong.  The Pew Report  finds approximately 90 major municipalities are severely underfunded.  Thus, government would be shifting the cost retroactively to private business...again.  Which, of course, is a horrible breach of the Rule of Law.

    Each municipal bankruptcy must follow the law and proceed through the bankruptcy process.  Our court system will apply the law to the facts, and determine the rights and obligations of all those impacted by the bankruptcy.  The law must prevail and not the arbitrary and retroactive rules of the law makers – i.e. Congress and the President.  [Read: Personal Freedom and Prosperity]

    Most importantly, our government needs to allow and encourage every worker to own their retirement.  Remember, three, Texas counties opted-out of Social Security and set up private accounts.  The government retirees of these counties have secure accounts with much higher benefits than Social Security payouts.  Everyone must own their retirement.  The benefits promised by government and business cannot be trusted.  [Read: Three Texas Counties Opted Out of Social Security

    Only an IRA or  401k pension plan will stop the terrible and immoral governance we have recently witnessed.  Only when a worker - government, private or self employed - owns and controls his or her pension will government stop raiding and manipulating the promised benefits made to employees.  Ownership of pensions is absolutely essential.  Nobody cares more about their money than the person who made, saved and invested.

    As stated in my previous post:

    A saving and investing system has enormous benefits to all Americans, and ownership stops immoral and corrupt governance because investors protect and preserve their property as well as that of their fellow workers.  However, what's most important to every American is saving and investing provides seed money which propels commerce and industry.

    Personal accounts for retirement is absolutely essential for personal freedom and a vibrant society.  America’s critical task is to end our corrupt political system and create personal accounts.