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Taxation in spite of representation

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Oct 15, 2008 10:35 pm

I’m taking a quick break from working on my latest prospecting seminar “Ultrashort: The New Value Play” to come back around to this tax question thing, and maybe broaden it out a little bit.

  With my aluminum foil cap firmly in place on my fevered brow, and my stacks of one ounce American Eagles surrounding me as I sit Indian style in my darkened office, here's what I'm remembering....   I read a book about 16 or so years ago by Larry Burkett titled "Surviving the 90's Economy."  Not a survivalist rant or economic apocalypse prophesy book, but what I thought was a pretty common sense approach easy read.  Mostly get out of debt, live within your means, save some, invest some type stuff.  Pretty much an early version of what you hear from Dave Ramsey, etc. on the radio.  Some of the stuff is kind of dated now, but a couple of things really stand out in stark relief against our current headlines.  One, if banks continue on their current path (this was pre Glass-Steagall repeal, remember) they will eventually fall victim to their own bloated growth and increasingly aggressive lending practices.  Ok, interesting.....   Here's the one which is making the hair on the back of my neck stand up right now, however.  Due to the debt load continuing to grow at the Federal level (!), new and exciting sources of tax revenue will be needed, and Uncle Sugar will begin casting longing glances at all the tax deferred assets sitting in accounts which have been as yet untouched by the tax man's gentle caress.  In order to convince the citizenry that it's a good thing, some sort of inducement will be offered to encourage conversion of these assets into some sort of Turbo Social Security Fund controlled at the Federal level.  Maybe a .50 on the dollar pop at conversion, to be taken out only as an annuitized stream.  Prediction was that the conversion will be initially voluntary, then transition to less voluntary, kind of like, say, mandatory withholding of income taxes.   So, did anyone else catch the quick blurb on CNBC a couple of days ago when some Congressman was floating the idea that, in light of this huge stock market crash and Main Street's retirement dreams going up in smoke, maybe the Federal Gov't needs to be able to "secure" the "broken" 401k and defined contribution model, and some sort of "guaranteed" alternative may be in the best interest of all of us?  Two of us at work were watching this guy talk on the tube and we looked at each other and both said, "Did he just say what I think he said?"     Should I tighten down the elastic on my tin foil beanie?
Oct 23, 2008 2:05 am

On a related note, what do you think about the news today about Argentina “nationalizing” the private retirement balances in that country?  You know what they say, “As goes Argentina, so goes…Uruguay.”  I’m issuing tin foil beanies to all my clients for Christmas presents this year.