A group of labor union advocates want to nationalize every 401(k) account in the country:
U.S. lawmakers should reform retirement plans after 401(k) and Individual Retirement Accounts lost more than $2 trillion in value since October 2007, a group of consumer and labor groups said.
The new consumer-labor group, “Retirement USA,” backed by the Pension Rights Center, the Service Employees International Union and the Economic Policy Institute, said the flagging economy has highlighted the inadequacies of 401(k) plans and increased the need for alternatives such as government-managed funds run with professional oversight.
“We may not be able to help the people hurting right now, but we should set up something for the future that will make people more secure,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “It’s been shown clearly that individuals make a lot of mistakes.”
“America’s promise of a secure retirement is central to our nation’s ideals,” Karen Ferguson, director of the Pension Rights Center, said in Washington March 10. “But for too many Americans, that promise is unfulfilled. We need a new system.”
We heard rumors of a similar proposal back in October when some Congressional Democrats talked about eliminating private retirement accounts in favor of a Social Security-like stipend and it’s fairly clear that the reasoning behind it boils down to a very simple idea:
That’s right. The American public is too stupid to manage their own money so let’s have politicians be in charge of it. Wonderful idea.
Even with the drop in mutual fund values over the past year, I can’t imagine this proposal going anywhere. Surely, there would be a public backlash against the idea that people aren’t smart enough to plan for their own futures, right ?
Then again, a year ago I couldn’t have imagined that we’d give $ 700 billion to the financial industry, give uncounted, and unaccountable, trillions in addition to that, and bailout the auto industry.
So, you know, who knows what’s going to happen next.