Retirement accounts such as 401k plans are meant to help people save money for retirement. So why do democrats want to do away with them?

Teresa Ghilarducci.

Does this name sound familiar to you?

She is a Professor of Economics at the New School for Social Research in New York City.

She is also out of her damn mind.

Why do I make such a claim? Because Teresa Ghilarducci has been speaking at committee hearings held by House Democrats regarding her views to de-privatize 401k retirement plans, and make them government programs. Let that just sink in for a second: she wants to do away with 401k plans geared towards Americans saving their income away for retirement and make them Government sponsored entities.

Sounds logical enough, right? Barney Frank did such a great job with Fannie and Freddie, he's exactly the type of person I want in charge with my retirement. Let me say this right off the bat - the federal government is the last group of people I want touching my retirement accounts.

To get into it, let's cover the basics: a 401k is a retirement account, typically sponsored by an employer. It is what is called a defined contributions account, meaning that the participant in the plan makes contributions to the plan from his/her paycheck before taxes. It is up to the participant how much money they want to contribute, and in most cases, the employer will match a certain amount. Employers may differ in what they match or when an employee is vested - in other words, they are eligible to receive a certain amount of that money from the employer upon withdrawal. For example, if an employer matches 100% of the first 6% an employee contributes on what is called a tiered vesting schedule of 5 years, that means that while the employee is contributing, they are eligible for a percentage of that money from the employer each year until they are fully vested at the end of 5 years. This means that withdrawal after 1 year would leave the participant eligible for their contributions, their earnings, and 20% of the employer's contributions. After 2 years it would be the same, only 40% of employer contributions, and so on...until after five years, when the employee would be fully vested.

It is up to an individual how aggressive they want their 401k portfolio to be - they can invest in high risk mutual funds such as those centered around stocks, or low risk funds, such as those that invest in a money market or bonds. The idea is that the account grows over time, and rises and falls with the reflective changes in the market. A typical mutual fund in a money market will have a rate of return on 6-9% on someone's investments. This is the value of the market. The account grows over time, and when the participant is ready to take their money out, they can pay any taxes up front on their earnings (since the money is deducted out of the pay check pre-tax) and then have the money for retirement. It should be noted that some plans do allow money to be taken out after taxes on a paycheck, but the traditional 401k plan has money taken out pre-tax.

There, now you have your history. Remember the original point of this blog? That's right, it was to call out Teresa Ghilarducci.

Once again, let's look at what this woman wants to do. I cannot stress this enough, because it needs to be beaten into people's heads until they understand. Teresa Ghilarducci wants to eliminate 401k plans under the private investment sector (all of you who work for mutual fund companies can kiss your jobs goodbye if this happens), and make them a government entity. She wants to take the money set aside by hard working Americans and trust it to the Federal Government - The same federal government that was in charge of Fannie Mae and Freddie Mac - which just had to undergo a 700 billion dollar bailout.

According to an interview with Ms. Ghilarducci, the rich are contributing 20 thousand dollars to their 401k plans a year, and this is unfair, because not everyone can contribute such an amount. The first problem with this statement is that it is quite simply wrong. There is a thing called the 402g limit. The 402g limit is a maximum amount that someone can contribute to his or her 401k plan. The 402g limit in 2008 is the same as it was in 2007 - $15,500 dollars. Therefore, Dr. Ghilarducci - no one can contribute 20k to a plan - it's illegal. No investment firm will allow you contribute over the 402g limit. They get fined, and the plans are set up to contribute over time, or to just simply stop once the limit is reached.

Second fallacy - according to Theresa Ghilarducci, the "middle class" is getting screwed since they can't contribute as much. Wrong. There are plenty of people who make let's say 70,000 a year (yes, this is part of the middle class) who give the maximum contribution pre-tax. I can honestly say this because I have worked in the industry and the average person contributing to a plan does not make loads of money. Many people just believe in the power of a free market or desire better retirement and contribute all they can.

Ironically, those making large 6 figure salaries are typically deemed ineligible for investing in 401k plans. They must open up an IRA or a brokerage account. You heard me right, they cannot even have a 401k. That means the vast majority of these people who are investing in 401k accounts are not millionaires, they are not the uber-rich, they are not the top 1% of the country, they are middle class Americans.

Why are these idiots so quick to try and place blame on people who have succeeded and made money for themselves?

Theresa Ghilarducci, your idiocricy continues to just baffle me.

The logic just gets more twisted. Under her proposal, the maximum contribution per participant would be 5,000 dollars. This is 10,500 dollars less than the maximum contribution per year under the current 402g limit. However, it's okay according to Dr. Ghilarducci, because those contributing that much "don't need it" anyway.

Really? Who is Theresa Ghilarducci to decide what Americans should do with their money? Who the hell is she to decide how much money someone does or doesn't need? Isn't this money that people are putting away for their retirement?

So let me get this straight - if you are making too much money, you don't need to contribute because you make too much or have saved too much anyway. Let's make it a government sponsored entity, and restrict the amount of money you can put in your 401k plan.

What's the term Barry Obama liked to use? "Spreading the weath?" This sure sounds like a clear cut example of it to me.

If you won't say it, then I will: SOCIALIST, SOCIALIST, SOCIALIST.

Now, stay with me here...when you look at the average of the stock market over the long term, the typical rate of return is (as noted before) 6-9%. To be safe, let's just go with 7%. Under her plan, she would offer an across the board rate of return of 3 percent. Without even having to do the math, let's just think about this...if you have seven thousand dollars growing at a rate of 3 percent a year for 30 years, or seven thousand dollars growing at a rate of 7 percent a year for 30 years, which earns more? Once again, this wouldn't even be possible under her plan, as the max contribution per participant would be 5 thousand dollars.

I fail to see the logic in this plan.

I understand that the market is at a down turn. However, the market has ups and downs. Any investor will tell you this. The point of playing the market is to stay with it, through large highs and lows...because in the end, the average rate of return will still be good enough to put you in the positive.

These huge evil tax breaks for 401k plans that Dr. G speaks of are not huge evil tax breaks at all. There are fees associated with plans, and yes - they do go to the people at the investment firm. But they aren't all rich because of it. Since it is a defined contributions employer sponsored plan and not a brokerage account, there is no commission, no huge benefit for those people.

Not to mention if we make it a government entity, someone still has to manage it, and someone still has to watch the plan. This idea that government knows best over the private sector is absolutely absurd.

There's no such thing as a free lunch, people. Your socialist meal tastes stale and moldy, and I want no part of it.

So let's review: under this idea the investor cannot invest as much, the government has more control over the normal citizen's life (yes, the average middle class American), and people who work for investment firms will be left looking for new jobs (over thousands suffering job loss). Yet, we are one more step to government control and a socialist country. In addition, millions upon millions of dollars that could have been earned by the normal honest investor will never see the light of day, because they have never had a chance to grow in a free market economy. They will be swept up in a whirlwind of government control.

No thank you. My hope is that ordinary Americans will wake up, and realize these theories proposed by people are destroying ordinary Americans, not helping them.

My advice to Teresa Ghilarducci? Leave my country the hell alone. You are a socialist, and I am not surprised you are supporting Barry Obama. You are doing more harm than good. Stop trying to hurt this country, just leave it the hell alone.

Wow - turns out the rocker knows a thing or two. Go figure.

-The Rocker-

A perfect example of people hearing only what they want to hear...

I think sometimes people should think before they type things. I am constantly amused by the absurdity of people who only hear what they want to hear. What I am saying is this: when you have something to say, consider all the facts. Supporters of Barack Obama more than supporters of any other candidate in the history of Presidential elections seem so willing to jump on anything without question.

Before I get into it, a buddy of mine had a usual one sided blog post on the internet today. I also love the cuteness of his language, as he calls the McCain campaign the "McSame" campaign. Clever. I hope he stayed up all night thinking about that. Anyway, here is the post, which I will riff on in a moment:

The McSame campagin has accused Obama of palling around with terrorists and therfore questioning his charachter and ability to lead... desperate, I know.

Now let's have a look at the man that McCain picked to be his presidential transition chief. The person charged with planning the McCain administration, William Timmons, lobbied for Saddam Hussein in an effort to get the international community off his back.

http://www. huffingtonpost. com/2008/10/14/mccain-transition-chief-a_n_134595. html

Okay, so let's take a moment to think about what we are reading here. Now, the article states that William Timmons, the Transition Chief of Mr. McCain has worked closely with two lobbyists who helped "ease sanctions against Saddam Hussein's political regime."

Okay, so this is unfortunate, and clearly not something that is favorable. I will be just as critical of John McCain as I will be of Barry Obama.

So, that being said - let's look at this article. This article appears in a completely partisan "news" source - you won't find a single article that ever says Obama, Pelosi, Reid, or any of the lot has done anything negative. So first problem - if you are going to cite a news source, please cite one that is not of questionable character or does not have a partisan bias. Flaw #1.

Now, the association of William Timmons to Saddam Husssein is as I mentioned, not desirable. Should McCain maybe consider someone else for the job as a result? Sure. There is not conclusive evidence to support that Timmons is guilty of anything, but it certainly couldn't hurt McCain to get another Transition Chief. I can admit to that.

Now, let's take another moment to think of the man's job - he is the Transition Chief for John McCain. That is his only job. He is not a foreign policy advisor, he is not an economic advisor, he will be the Transition Chief.

More importantly, the bulletin post I copied links McCain indirectly to Saddam. So, here's the problem - did McCain's Transition Chief possibly work with lobbyists who had a connection to Saddam? Yes. Did John McCain? No. So it is tied to William Timmons, not John McCain.

Now, let's look at the way the first sentence of the bulletin post is phrased, and I quote: "The McSame campagin has accused Obama of palling around with terrorists and therfore questioning his charachter and ability to lead... desperate, I know."

Now, McCain was never my top choice for the ticket. In fact, he was not even the man I voted for in the primary. He does things that I agree with, but does and says some other things that I disagree with - he is certainly not my ideal politician. However, should John McCain question Barack Obama's associations? Absolutely. The problem with the bulletin post is that Barack Obama is directly linked to people such as Bill Ayers and Jeremiah Wright. Directly linked. Yet, somehow these associations are dismissed by people like my friend posting the bulletin. He is not at all critical of his own party - meaning he will do or agree with anything they place on the table. That is not keeping an open mind, that is not being objective, it's absurd. It's absurd to think any particular party will do things that you 100 percent agree with. It's perfectly okay to disagree with your party from time to time.

So let's look at some of these outstanding people - Bill Ayers. The founder and member of the Weather Underground group - who is responsible for bombing the following: The New York City Police Headquarters, The United States Capitol Building, and The Pentagon. This is a man who has served on committees with Barack Obama (The Woods Fund of Chicago) and if you notice - Obama's associations with Ayers have changed over the years. He has gone from just a guy who lived in the neighborhood of Senator Obama to a guy who has served on committees of, etc etc. Why does this keep changing? Is this a person I want a politician directly linked to? A person who shows no remorse and says he did not do enough damage years ago? No. Absolutely not.

Then there's Rev. Jeremiah Wright. The Barry Obama "spiritual advisor" for 20 years. The man who is on camera saying things such as "...not god bless America, God damn America." The man who has plenty of off color remarks from the very halls of the church that Barack Obama has sat.

And that's not even getting into Obama using Saul Alinksy's theories from Rules for Radicals into his every day use, his marxist and socialist overtones, his ties to Tony Rezko, and his relationships with Fannie and Freddie constituents.

So my advice to my buddy is this: question John McCain. Question him to your heart's content. He is a man, and moreover he is a politician. Chances are, there are things you can pin on him that you will not agree with. But, if you are going to do that, you had better question Barack Obama and his associations. Because I promise you in the end, you will find them far more demeaning than anything you have found on John McCain. If you are going to make such a link to McCain but then dismiss any of Barck Obama's questionable associations, you are in the wrong.

-The Rocker-

An interesting conversation at the merch table.

Last night we played a show, and I was hanging out at the merch table after our set. A guy came up to me and was really enthusiastic about the set, which always means the most to me. Anyway, we got to talking and he mentioned how he has served time in Iraq and that he wants to bring some of his Army buddies to a show because he thought they would totally dig the music.

Whenever someone tells me that they have served for this country, especially having the bravery to go overseas, I make it a point to thank them for their service, and to let them know that we appreciate everything our troops in the armed forces do for us.

I did that, and he looked me in the eye and said "it's perfectly okay. You're welcome, and we do it for you."

That absolutely made my night. That man is a patriot, and that is a clear cut example of the American spirit. It means a lot to hear things like that, and to think of the wonderful sacrifices the men and women of the armed forces make for our country every day - and then when I thank them to take such a selfless stance is just amazing. He may of thanked me for the show, but my show is not possible without he and others like him serving this country - so thank you, soldier. Thank you indeed.

-The Rocker-

Respect in politics, and the lack thereof

The following is a message sent from one friend to another. Because it is so destructive in nature and is an example of the problem with this election, I will spend some time looking at it.

"Lol, Chris I admire your will but I pity your motive and lack of unity. I didn't say anything about vote for Obama, I just had a link. I rather have someone having the ability to vote rather then regretting it later. I don't care who you vote for as long as you are an educated voter. But hey, I guess when you have a sorry party, a sorry candidate, and VP pick, all you can do is get mad and try to make this about personal issues. Like I said, I pity this and all I can do is laugh, say good luck, stay above, and look forward."

To clarify, the link being discussed is a site promoting voter registration that is paid for by Obama for America and is obviously a pro-Obama site. The name and setup of the site are undeniably intertwined with the Obama campaign. Chris was making the point that it is not right to promote someone to vote in a non-partisan manner and then direct them to a site run by the Obama campaign.

This kind of response eerily reminds me of indignant remarks like "what's wrong with Kansas?" (for voting Republican) and "It's not surprising, then, they get bitter, they cling to guns or religion or anti-pathy to people who aren't like them, or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations." It is damning to disagree with someone and then belittling their way of thinking because you don't understand it.

There is nothing to pity about ones motives. The motives of Chris were nothing more than his political beliefs and his respect for democracy. The author of the above response uses the word pity twice to demean the opinions of Chris. It is the use of that kind of language that illustrates the contempt and disrespect that stains what is a great freedom that we have in this nation. To pity someones opinions is a terrible thing the think and an even worse thing to express.

The fact that the author condemns Chris for his "lack of unity" and then goes one to say he pities his beliefs, that the party and candidates Chris supports are "sorry", and then finishes it up by saying all he can do is "laugh" and "stay above" Chris' beliefs, is a phenomenal example of what hypocrisy is all about. Condemning someone for lacking unity because they disagree with you and then talking down to them like an insolent child is amazingly hypocritical and wrong. It is this sort of disrespect that actually makes unity between people of differing opinions so difficult.

I think political debate is great. I think that it is awesome that we live in a country where two friends can disagree about politics but still remain friends. This is possible only because we are supposed to differ in opinion but still remain civil. Having respect for your opponent is honorable and leads to more productive dialogue. Demeaning those with differing opinions is exactly why other countries can not have the open political dialogue we enjoy as Americans. The above response illustrates the disrespectful and demeaning nature in which some would like to take the political debate. Staying above is not about looking down on someone else's opinion, it is about respectfully disagreeing.

As a side note on one comment made, a person's associations are definitely indicators of a person's character. Obama's connection and support of William Ayers is an indicator of his judgement and character. Obama's support and the work he has done for ACORN is an indicator of his judgement and character. The fact that Obama declared Rev. Wright to be is spiritual mentor and close friend is a self assessed condemnation of his judgement or character. Obama had a close relationship, as described by Obama, with Wright for more than twenty years. Either he did not know after all that time what Wright's beliefs were, which is a condemnation of his judgement (and considering that he will be selecting Supreme Court judges, it is a huge deal if he can personally know someone for that long and not know what that person believes), or he knew Wright's beliefs, accepted them, and decided to choose someone of those beliefs as his mentor, which condemns his character. Judgement and character are extremely important issues when choosing a president, especially when a candidate lacks experience. An example of a personal attack is something like attacking someone for having a pregnant 17-year old daughter or saying someone is too old and out of touch because he is not proficient in using a computer. (Even though injuries suffered while a POW are the reason for that lack of proficiency)

-The Banker

The Apparent Double Standard in Telling People to Go Vote.

So I have noticed this sort of mentality lately:

Go Vote! It's your duty! You have to go vote!

We see this sort of thing every four years. Hollywood stars, for example, all come out of the woodwork and read from a script and act like they give a rat's ass. Matt Damon tells you to vote. Jessica Alba tells you to vote. Leonardo DiCaprio tells you that if you don't vote, he no longer knows you.

Sure thing, Leo. I forgot we were such pals.

Anyway, besides the apparent idiot nature of Hollywood pretending to care, normal Americans do this sort of thing as well. That's fine - I have no problem with either of them telling me to be involved. There is this apparent double standard happening though - you are told by many to go vote and to do your duty - only if you vote for the candidate they want you to vote for. I have buddies go on and on about how I should make sure I am voting, and then when they find out I am not voting for the candidate they desire, they throw a hissy fit.

In a matter of seconds, I go (in their eyes) from being a patriot to being a scumbag.

That, my friends, is a double standard.

If you want people to vote, fine. But you then have to understand that they may have different ideals than you, different goals, different aspirations. To some extent, you may have different ideas of what you percieve America to be. Now, don't get me wrong or twist my words, I think that this is one of the many great things about America - that we can have these distinctions. But don't get mad at me just because I don't feel the same way as you. You can't see me as a patriot one moment and praise the civic duty of voting only to call me a bastard because I am not voting for who you wish. Maybe I think your candidate sucks and I wish you weren't voting for him, but I will not knock you for at least taking an active part in voting.

Unless of course, you are voting because Demi Moore and Ashton Kutcher told you to. Then you should just do all of America a favor and show up to the polls a day late, because let's be honest, voting "because GI Jane and her buddy, the guy from Punk'd told me so" means you probably aren't paying attention to world issues in the first place.

-The Rocker-

Barry Obama

This guy is running for President of the United States. And winning.

I felt that this was worth noting.

-The Banker