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The Left's Ongoing Assault on Your 401(k)

BEGIN TRANSCRIPT

RUSH: Here is Lynn in Pittsburgh, and I'm glad you called.  It's great to have you on the program.  Hi.

CALLER:  Hi there, Rush.  So good to talk to you.

RUSH:  Thank you.

CALLER:  Thank you very much --

RUSH:  You bet.

CALLER:  -- for everything you do for us.  I was wondering if you saw the PBS program last night on Frontline, I believe it was referred to as Your Retirement Gamble.

RUSH:  I did not see it.  What was it about?

CALLER:  The sort of voodoo 401(k) and --

RUSH:  Okay, let me play a little game with you, Lynn.  I didn't see it, okay?  You believe me?  I'm not lying to you.

CALLER:  Okay.  I believe you.

RUSH:  I didn't see it.  I'm gonna tell you what it was about.  You tell me if I'm right.

CALLER:  Okay.

RUSH:  The purpose or the theme of the Frontline show on 401(k)s is how they're really not working out the way the government intended and the government is being short changed.  The government is losing money on 401(k)s, it's unfair, and there's a system, there's a plan whereby the government will be able to recoup some of the money they have lost on 401(k)s.  It's gone way beyond what they ever originally intended.  People are shorting the government way too much by taking a lot of money off the top of their salaries and donating that or contributing that to 401(k) tax-free, costing the government a lot of money, and it's unfair, and there are ways now the government's gonna get that money back.  Is it something like that?

CALLER:  Well, that wasn't entirely their slant.  It was more like the government needs to take a good look at this because the 401(k) business puts a lot of fees and charges that you poor, stupid people must have just figured you were gonna get this somebody charging to take care of you.

RUSH:  Oh, so the people that administer the investment portfolio that the 401(k)'s invested in charging --

CALLER:  Are unfair.

RUSH:  Yeah, the fees are so much that whatever's been put away is being eaten up by evil Wall Street people?

CALLER:  Right.  So the only thing you can really do now if you are prudent is to invest in index funds.  That that's the only way to go, and the government really needs to start looking into this or people my age are gonna eat dog food rather than retire.

RUSH:  Right, well, what I told you is not wrong.  They're gonna end up canceling 401(k)s.

BREAK TRANSCRIPT

RUSH:  Okay, so I looked it up.  What Frontline did last night was impugn the entire concept and structure of the 401(k).  They teased it this way:  Retirement is big business in America, but is the system costing workers and retirees more than what they're getting?  And it proceeded to talk about how 401(k)s are a rip-off because the money that you deposit, you contribute to your 401(k), has to be managed by somebody, and they're charging outrageous fees and commissions, eating up ever larger amounts of your 401(k), and so what should you do?  Let the government handle it for you.  Buy government securities, buy savings bonds, buy Treasury bonds and bills and stick with the indexes and let the government do that for you. 

Now, I was wrong about my wild guess of what the show was about, but I do know that there is a plan afoot to eliminate the 401(k) altogether.  But the plan is -- well, it was.  I don't know how it's incrementally changed, but the plan was to buy your 401(k) and give you exactly what it was worth a couple of months or a month before the market crash in 2008, buy everybody's 401(k) at whatever it was worth before the crash and then every year give you one to two, maybe 3% interest on it.  And that's it.  And the reason is that it's costing the government too much money.  Your contributions are tax-free.  You get to donate percentage of your income to your 401(k) before any of your income is taxed.

So it lowers the amount of your income that's actually taxed, that means the government is losing money.  Yes, it's so true.  The government is losing money.  So some babe at New York University or the New School or whatever's got a plan that I just outlined, and it's very popular in Congress and may happen, but Frontline was pushing index funds, which are complicated, but they're supposed to cost less, and they give evil Wall Street bankers less profit.  So the evil Wall Street bankers were the target, the focus of how you are being ripped off by the free market. You're being ripped off by capitalists on Wall Street.  The government can handle it for you much better.

END TRANSCRIPT

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