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Proposed Legislation Would Put U.S. Treasury In Control of Retirement Investments: Yikes

State Mandates Regulatory Updates

Key Takeaways

  • The private capital markets are meant to be separate from political and legislative risk, whereby the government does not interfere with the free market.
  • The newly proposed federal retirement program would replace any hope of Social Security reform.
  • The proposed federal retirement fund would not require regulatory oversight from the IRS, SEC, EBSA, or DOL; it would also not require that the fund's managers be registered with the regulatory agencies, or have shown an adequate understanding of securities- as it requires of every other financial industry professional that manages assets for others.

At one of our webinars we had a client ask us directly, "are the Auto-IRA programs the start of the end of Social Security?"

We wouldn't want to speculate on something that would be as detrimental to retirees, seniors, and the overall American economy as ending Social Security. That said...

The federal government should stop playing "dress-up", as financial professionals, least of all fiduciaries; the Feds only concern should be regulation- Congress cannot even trade stocks efficiently without the Hill's "gossip", or insider information/ a felony as industry folks refer to it.

The proposed U.S. Treasury managed and held fund would not have to adhere to ERISA, nor the IRS codes, wouldn't have to report to the SEC, and its political appointees need not be registered investment advisor representatives... bold of Colorado's own John Hickenlooper to put forward such a nescient bill, devoid of any financial sense and oversight- "isn't one looming disaster enough?"

The private sector has been successfully managing (much more successfully than government-run pension programs) the retirement investments of Americans for more than half a century. Worst case scenario, the Feds want the ability to access Americans' capital, to reap the interest by taxing/ charging private capital further and more easily, in a time when the federal government is irrefutably BROKE... yet spending billions in the hopes that capital will pour into Treasury bonds, like it has in previous war-times. How else are the Feds, and Congress specifically, going to keep funding their overspending, with little to no ROI?

More than 100 million, or two-thirds of Americans, have a financial stake in the current retirement financial system- or $37.8 trillion. This is primarily because defined benefit and pension programs backed by the government have failed hundreds of thousands of Americans over the last century. Currently, Chicago's pension program is still underwater, the necessary funding has not been given to Social Security, New Jersey's pension system is set to fail in >20 years, meanwhile American "allies" are shedding billions of dollars in Treasury bonds.

To put the government's overreaching even further into perspective, nearly half a million Americans work in cannabis meaning even though they are reputable businesses practicing legally under their state legislatures- they are excluded from the banking and therefore the financial system almost entirely. Far be it wise for their industry to sign over their assets, more importantly their employees' assets, to governmental entities that have long excluded them in the first place. Whether or not the government sponsored retirement programs are on the state level, or God forbid on the federal level, Americans need to know that their assets are secure and free from political party influence and regulatory corruption.

American lives quite literally depend on the separation of federal government and private capital. It is therefore necessary to keep our capitalist financial system laissez-faire, and in no way owned or operated by the government. Full stop.

A great article by Lee Zeldin

And another by Mark Schoeff Jr. at Investment News:

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