Are Pension Funds at Risk?
Pension funds in the U.S. may be at risk in a way that most Americans would never imagine: government confiscation.
Governments in other countries have already done this, or planned to do it. Argentina sucked out the money from government pension funds and replaced it with government bonds a few years back. In Cyprus, the government had proposed doing the same in order to get their hands on much-needed money, although to date they haven't done it, far as I know.
I've read stories about how the U.S. government has contingency plans to do the same if they need money and - what's this? - it looks like that's taking place right NOW.
Before we rush to judgement here, let's look at the facts in this specific incident.
It seems the U.S. Treasury faces shortfalls until Congress resolves its budget problems. To keep payments flowing to its many constituents - social security recipients, medicare patients, food assistance program recipients, etc (the list is endless) - it seems the Treasury Department has decided to tap into government pension funds to tide things over. They say that they will repay the money with interest as soon as budget issues are resolved. I have no reason to doubt that they will indeed repay this as promised. However, I believe this is the first time that the government will, in fact, take money out of pension funds for its own use. Is this a precedent setting event or a one-time-only occurrence? Time will tell. But I don't like the precedent.
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Governments in other countries have already done this, or planned to do it. Argentina sucked out the money from government pension funds and replaced it with government bonds a few years back. In Cyprus, the government had proposed doing the same in order to get their hands on much-needed money, although to date they haven't done it, far as I know.
I've read stories about how the U.S. government has contingency plans to do the same if they need money and - what's this? - it looks like that's taking place right NOW.
US Treasury secretary says he has begun tapping federal retiree pension fund to avoid default
It seems the U.S. Treasury faces shortfalls until Congress resolves its budget problems. To keep payments flowing to its many constituents - social security recipients, medicare patients, food assistance program recipients, etc (the list is endless) - it seems the Treasury Department has decided to tap into government pension funds to tide things over. They say that they will repay the money with interest as soon as budget issues are resolved. I have no reason to doubt that they will indeed repay this as promised. However, I believe this is the first time that the government will, in fact, take money out of pension funds for its own use. Is this a precedent setting event or a one-time-only occurrence? Time will tell. But I don't like the precedent.
More...
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