Continuing our recent peek into the world of government confiscations of citizens’ superannuation, we find that France too is indulging in grand theft.
The move reflects a willingness by governments to use long-term assets to fill short-term deficits, including Ireland’s announcement last week that it would use the country’s €24bn National Pensions Reserve Fund “to support the exchequer’s funding programme” and Hungary’s bid to claw $15bn of private pension funds back to the state system.
Think our government would never resort to stealing your super to pay down its debts?
Think again.
So far we have found that Argentina, Hungary, Bolivia, Poland, Ireland, France, and now the mighty USA have all either confiscated or “borrowed” their citizens’ retirement money to pay for government debt problems.
And our very own Senator Barnaby Joyce has given early warning of the same thing happening right here in Australia:
Think the government of a “strong” economy like ours – running big budget deficits – would never steal some of your superannuation?
Don’t be deceived. This is coming to Australia. Barnaby said so.
Just as Barnaby was right in 2009 when he warned of the possibility of the US defaulting on its debts, there is ever-mounting evidence from around the world that Barnaby is right about this too.
The changes mean that the state-controlled social security and pension fund, ZUS, will now receive 17.22 percent of workers’ salaries, a five percent increase on the previous amount of 12.2 percent.
Critics have said the changes were nothing more than some creative accounting by the government to shore up its budget deficit…
The critics include several respected economists, most notably Leszek Balcerowicz, the former finance minister and National Bank of Poland head.
Krzysztof Rybiński, a former vice president of the NBP, has gone even further and is collecting signatures for a class-action lawsuit against the government for “lost gains as a result of the changes in the pension system.”
Even the constitutionality of the law has been questioned. Jerzy Stępien, former head of the Constitutional Tribunal, said if he was still head of the court, he would question the constitutionality of the reform in its most important points.
Poland is far from being an isolated case.
More and more governments around the world have been enacting “reforms”, to get their hands on their citizens’ private retirement savings.
From Global Pensions:
It appears moving backwards on pension reforms has become the thing to do on both sides of the Atlantic.
Hungary last year moved much of its private pension assets to the state. Last month, new rules came into effect in Poland diverting 5% of the 7.3% of salary going to private pension funds to the state.
In both cases, the changes represented a step back from reforms that led to significant savings on the countries’ balance sheets.
But another recent reversal we’ve seen has come from Latin America. In the 1990s, Bolivia’s decision to move its pension assets from the state to private managers placed it among the most advanced pension systems in the region. However, the current government has decided to nationalise the assets once more claiming it is creating a pension system that is equal for all.
Last week we saw that heavily indebted governments in Argentina, Hungary, and Ireland have also resorted to super-stealing.
The most dramatic example of a government dipping into its citizens’ retirement savings is the once-mighty USA. Just last week, the U.S. Treasury began tapping the retirement savings of federal workers (public servants) to shore up government finances.
Barnaby Joyce has given early warning of the same thing happening right here in Australia:
Further to yesterday’s first instalment in an ongoing series covering governments’ confiscation of retirement savings around the world – and how Barnaby has warned it is coming to Australia (“No Super For You!“).
“During these difficult economic times, we are increasingly seeing 401(k) funds being treated as rainy-day funds,” Senator Herb Kohl, a Wisconsin Democrat, said in a statement obtained by Bloomberg News. “A 401(k) savings account should not be used as a piggy bank for revolving loans.”
As we saw yesterday, the US Government hit its $14.3 Trillion borrowing limit on Monday. It is tapped out.
So the US Treasury has announced that it is now taking Federal workers’ 401K pensions – the equivalent of our super funds – to service the governments’ bills and postpone a debt default. Something that Barnaby Joyce warned could happen, back in late 2009.
It is pretty clear that this latest development has nothing to do with protecting “workers” retirement assets.
It’s about quarantining those funds, so that the US Government can follow the lead of Argentina, Hungary, and Ireland, and begin pilfering non-Federal worker retirement savings too.
If you don’t believe it could happen here, consider Barnaby’s warning last week:
Consider too, that Gillard Labor has already introduced legislation in last week’s budget, aimed at “encouraging” our super funds to “invest” in government “infrastructure”. That is, in Labor-managed spending programs.
Think pink batts. And school halls.
And finally, consider the words of PM-in-waiting and Minister for Superannuation, Bill Shorten:
Labor have their eyes on Australian workers’ $1.3 Trillion in super savings already.
Don’t think it can’t happen here.
UPDATE:
From Sovereign Man:
There are certain times in life when a man is faced with overwhelming adversity… times when he has no reason to adhere to society’s norms anymore. It is in these instances that the true quality of his character comes shining through.
One of these situations is when he’s broke. Dead, flat broke. Some people, even when staring deep into their own financial abyss, still hold to their moral principles, honor their obligations, and keep their word.
For others, the boundaries of morality are quickly blurred into shades of gray, and things like fraud, thievery, and deception become perfectly legitimate tactics in their minds.
Speaking of broke, faced with what is tantamount to the official insolvency of the United States of America, policymakers have opted to seize funds from the retirement accounts of public sector workers in order to keep the government running.
Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.
Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers.
The USA is taking public servants’ pension funds, to pay government bills.
Note that well.
Because last week, Senator Joyce made a very disturbing revelation (below).
Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.
“This is effectively a nationalization of private pension funds,” David Nemeth, an economist at ING Groep NV in Budapest, said in a phone interview. “It’s the nightmare scenario.”
But Argentina and Hungary are not like us, right? That couldn’t ever happen in a mid-level “advanced economy” like ours … right?
Capital city dwelling values fell by a seasonally adjusted 2.1 per cent in the first quarter of the year, according to the latest RP Data-Rismark Home Value Index.
The quarterly change was the steepest since the index series began in June 1999, RP Data research director Tim Lawless said.
And from the Sydney Morning Herald, yesterday:
Australian real estate, long the subject of global concern, bears all the symptoms of a market that simply has run out of puff.
If you think “it could never happen here”, if you think that our government would never take away your super to pay for its massively wasteful spending, then it’s time to think again.
Were you one of those who ridiculed Barnaby’s warning in late 2009, about the possibility of a US debt default?
On Tuesday night’s budget, Labor sneaked in an Amendment of the Commonwealth Inscribed Stock Act 1911. Here is the most telling statement for where our nation is going under this Green-Labor-Independent Alliance. Under Part 5 Section 18 subsection 1 “omitting ‘$75’ and substituting ‘250’ ”.
Now that is in billions ladies and gentlemen and it is real money that really has to be paid back. If we have all this money stashed away under the lower net debt figure that is always quoted by Labor, then why not use some of this mystery money to pay off what we owe to the Chinese and others who we are hocked up to the eyeballs to.
The reason why we can’t is at least $70 billion that makes up ‘net’ debt is tied up in the Future Fund and student loans.
That is exactly what is happening in America. Right now.
And Barnaby is warning that it could happen here too.
The first steps in that direction have already begun.
From Global Custodian (Australia edition), 11 May 2011:
The Gillard government’s 2011-12 budget has proposed a raft of initiatives aimed at encouraging superannuation fund and private investment in infrastructure projects.
In light of the botched “school halls” program, and the stalled white elephant NBN – which so far has only achieved a 12% takeup rate, versus their predicted 58% – would you really trust this government to wisely and prudently invest your super in Government infrastructure?
Others have their doubts.
From The Australian, 12 May 2011:
The government’s plan to use tax incentives to encourage superannuation funds to invest in new infrastructure could be thwarted by inadequate returns on projects and a reluctance by the states to take on project risk, experts say.
First, a little “encouragement” for super funds to invest in government spending programs.
Then, when the costs blow out, or when the government debt becomes unmanageable?
This blog will be following this story of government confiscations of public and private retirement funds in future posts.
A final thought for now.
Yesterday I commented on the proposal that Australia should have an “independent” Carbon Bank (“Our ‘Squeeze Pop’ Carbon Bank“). One that …
…could be allowed to borrow money to invest in renewable energy projects against the future revenue of Labor’s proposed carbon tax and emissions trading scheme.
In other words, a Carbon Bank where the government … meaning taxpayers … becomes the guarantor for any losses made on those “investments”.
Does that prospect concern you?
Can you see where this is all heading?
This is a government that has racked up nearly $200 Billion in gross debt.
Is running a “forecast” $50 Billion annual budget deficit.
And has now moved to raise our debt ceiling by another $50 Billion, to a new record quarter of a Trillion dollars.
This is the same government of completely unqualified economic incompetents behind a string of costly disasters – electrified ceiling insulation, overpriced school halls, “green scheme” rorts, the problem-plagued Nation Bankrupting Network … and now, free set-top boxes.
Do you honestly believe that this government would not end up burying taxpayers with even bigger losses from their carbon dioxide “air tax” scheme too?
Do you honestly believe that this government would never follow the lead of Argentina, Hungary, Ireland, and now the superpower USA … and steal your super to pay for massive debts that they have racked up?
These are just some of the many sound reasons why Senator Joyce has persistently tried to raise public awareness of the real and grave peril of ever-increasing Labor government debt and deficit, in a (supposedly) post-GFC world.
Your retirement savings depend upon your taking notice of his warnings.
Barnaby was right.
Barnaby is right.
UPDATE:
Labor’s PM-in-waiting, the Minister for Financial Services and Superannuation, Bill Shorten, already thinks of your super as a “significant national asset” … a kind of “sovereign wealth fund”.
This week marks 12 months exactly since the government announced plans to take compulsory superannuation from 9 per cent to 12 per cent.
… our superannuation savings place Australia fourth in the world. Its $1.3 trillion in funds under management through superannuation significantly boosts national savings and provides greater retirement security for millions of Australians. Superannuation is also a significant national asset because it strengthens our financial sector.
UPDATE 2:
About the USA’s new edition of Grand Theft Pēnsiō.
From ZeroHedge:
It’s Official: DTS Discloses Total Debt Hit Ceiling Yesterday; Government Draws On $14.3 Billion From Retirement Funds
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Barnaby Is Right 
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