Monday, September 6, 2010

Do We Need a ‘Public Option’ 401(k)?

Grouch: Do you trust the government to be the caretaker of your 401k plan? If a government 401K option were available would you opt into it? Is this just a case of the Nanny state telling you what to do again by mandating 5% of your salary must go into the plan? Is this just another slush fund like Social Security that Congress will use to crank their spending up to even higher levels? Shouldn't people have the right not to save for their retirement and reap the rewards for this type of behavior?

I don't have a problem with the government offering a "public option" 401K plan yielding 3% as long as it is voluntary. Will I put my money into it? No f#&$ing way. I want to keep the plan I have and keep the big nose of government out of my business. These guys are hard up for new money to spend and I'm no sucker.

You may also have read some articles and emails circulating around the Internet warning that the government is planning on confiscating all private IRAs and 401Ks and forcing them into this plan. I can neither confirm or deny those rumors, but the roughly 5 - 6 trillion dollars in these plans would go a long way toward shoring up the nation's finances. Let's hope these rumors are not true, and that the "public option" 401K is not step 1 of the master plan for a massive wealth confiscation by the government.


  1. We will never never see things go right in Washington until the current crew is voted out. This has been the ultimate wake up call to our fellow citizens to never have these liberal types in there again. Not that the republicans are better. They know the way people want government out of our way and pocket.

  2. Interesting discussion. I personally would like to see all workers have access to the TSP plan. It is probably the best designed plan in the nation. I have to say I was surprised to see Dallas Salisbury so positive on 401 (k)s. A lot of them are ripping people off with their high fees and poor choices.
    I also have a problem with anything mandatory from the government.
    Just as a counterfactual exercise I would like to see people's beliefs on what it would be like today if there had never been Social Security.

  3. The proposals I've seen for the "public option" 401k almost exclusively consist of a social security type of fund that earns a low rate of fixed interest (3%) with no option to invest in "risky" assets like stocks and bonds. Of course this will be just another slush fund, like social security, that politicians will use to fund even higher spending and leave investors nothing but IOUs.

    If I could have invested my Social Security contributions and the match by my employers in a balanced fund of 60/40 or 50/50 stocks/bonds, I'd be a rich man instead of just moderately well-off.