"Hey bud, have I got a deal for you. Just deposit your money tax free into one of these little 401k plans and you can defer taxes until you are fifty nine and half! Your savings will increase because every one knows that the stock market only goes up. You can't miss. It's like buying a house, pal."
That's what government encouraged us to do. Invest your money and avoid our taxes. What's not to like?
Well, as it turns out- plenty. This is how it panned out for me.
In the summer of 2009 with no jobs in sight, I pulled out a large sum of 401k money. Federal and state taxes cost me 27%. The Feds tacked on a 10% penalty because don't you know- we agreed to keep it in until death do us part or age 59.5 came. The problem with all of that was- nobody anticipated that our government would grease the wheels of the banking elite so that they in turn could bankrupt the world. Thus ruining all of our investments and leaving us with a national debt we will NEVER pay.
It really is criminal negligence. They'll be happy when we are all living in tents. It has been the greatest grand theft of all time. Bankers stealing everything in sight while a President is putting for par on Hawaiian golf courses.
Had I known this, I doubt I would have saved a dime. I remember the narcissist in chief telling us all in 2008 how he was going to let us use our 401k money (Isn't that rich- going to let us use our own money?) penalty free. Yea. I'm still waiting. Here's the recap on that bullshit promise. http://www.politifact.com/truth-o-meter/promises/obameter/promise/508/allow-penalty-free-hardship-withdrawals-from-retir/.
Ok now listen up shylocks, loansharks, and wise guys while we recap how our government operates. See if you can pick up some pointers.
1. Tax the shit out of people. (Extortion or protection)
2. Force people into some investment- tax free- they will stampede in. (Don't tell them it isn't risk free)
3. Then change all of the rules for bankers because they finance campaigns and buy politicians.
4. Let the bankers issue credit to everyone with warm blood. (Give the shoeshine boy a mansion.)
5. Have a bank/stock market collapse. (No more shoeshine boys taking out loans)
6. Then have a housing collapse. ( Nobody saw it coming, it's a mystery.)
7. Steal a couple of trillion to give to bankers and business friends.
8. Charge those two trillion to the public debt- that way the people who lost all of their home equity, all of their 401k money, can also have an enormous debt to pay back.
9. If people have any money leftover after all of that, print more money so that savings and buying power can be inflated away.
10. Make sure none of your cronies gets prosecuted and let them keep all of the money they stole.
Three years later, it is still happening. Jon Corzine took good notes. He went shopping for chateaus. Clearly he wasn't worried about his business going bankrupt and his customers getting stiffed. http://www.vanityfair.com/online/daily/2012/01/february-magazine-jon-corzine-mf-global-chateau-goldman-sachs
This is the sickest thing I have read yet on the whole MFS Global grand theft. http://www.nakedcapitalism.com/2012/01/yes-virginia-brokerage-firms-keeping-client-ripoff-provisions-in-customer-agreements-in-the-wake-of-mf-global.html