House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."
Study history a bit. The reason Social Security is hosed, is because #1, it's a Ponsi - anyone else wanting to do this would be arrested. (remember back in the 80's the "airplanes"?) But it's also hosed because the government saw fit to raid the social security "lock box" whenever they saw fit - and never has a nickle been paid back to it.
So now the dem's are actually wanting to seize our hard earned 401K's to do the same thing? With the promise of 3 friggin percent?? I think not.