Ireland’s government has announced a novel way of paying for government spending by taxing the assets of private pension funds. This appears to be a direct levy on wealth retained by pension funds.
Similar ideas have popped up from time to time here in the U.S. There are trillions of dollars in private pension funds, IRA’s, Kehoes, 401-K’s, etc. Some have suggested that it would make sense for the government to seize these assets in exchange for bonds issued by the Social Security Administration. The argument is that these bonds would guarantee a fixed return thus removing risk from pension investments. It would also have the “benefit” of providing “social justice” by equalizing returns for all retirees. (see this scenario.)
Well, folks, that’s where the money is. So why shouldn’t the government skim off some or all of it to pay its debts and to support important public investments such as economic stimulus packages, financial industry bail-outs, auto-industry union rescues, high speed rail boondoggles, alternative fuel subsidies and other public benefits?
Don’t say it can’t happen here. It very well might, and sooner than you could ever expect.