For decades, liberal politicians, both Republicans and Democrats have been eyeing the massive amounts of money in personal retirement accounts.  Most politicians think that money belongs to the government and thinks it is unwise to allow the people to control so much money.  Politicians and bureaucrats think that they can handle your money better then you, so they take (tax) your money and then fund a benefit for you with their control, instead of allowing you to keep your money and provide for yourself.    
Some politicians have thought of a sneaky way to control and take your retirerment or investment money.  Using fiduciary responsibility laws, bureaucrats are trying to force more retirement funds into government bonds.  Quite simply, bureaucrats have the power to decide what is responsible or what is irresponsible retirement planning.  Misusing this power is corruption, however corruption happens until someone stops it
If the treasury department is having a hard time finding buyers of new or rolling federal debt (over $19 trillion: March 2016), they could just inform money managers and pension plans that are fiduciaries, that a certain percentage of the money they manage needs to be in federal government bonds. To keep their certification or qualification as a fiduciary, they will need to push (nudge) their clients’ money in the direction of government debt.     
Bureaucrats also can use a host of legal options as well.  They could give ammunition for clients to sue their money managers in class action or bring federal criminal charges themselves.  The options of bureaucrat thuggery are numerous and always trying to stay one step ahead of the people they are trying to control. 

It does not need to be a good investment for the government to claim that it is.  Many people will wrongly conclude that reason and common sense would rule out and they could prove that they could have a responsible financial portfolio without federal government bonds.  Sorry, that is not how government bureaucrats work, they do not need to use common sense or prove their point, they are government, thus smarter and wiser by definition.    
So, what is the big deal if more of someone’s money is in government bonds, is that not a good investment?  First, that is not liberty and the people do not have to follow government edict unless they can explain why they should not.  There are numbers, stats and other data that people could show that US debt bonds are secure and a good investment, however the opposite can be concluded and demonstrated as well.  This is not a decision that belongs to politicians or bureaucrats, this a liberty issue. 
First, control: if government forces people to ‘invest’ a higher percentage of their money in government, they have control of that money.  They decide how that money is used, thus control.  If they just use it for debt, they are creating a very bad economic situation where they need to take (tax) money from people to give them their money back.  This holds all the negative disincentives the Laffer Curve, just to repay the debt.
Second, stealing: government through the Federal Reserve is stealing massive amounts of wealth from the dollars in your pocket, in your investments, in your bonds, in your pensions, in your contracts, in your salary or anything delineated in dollars.  By adding more dollars and not adding assets to match, the FED is diluting the worth of your dollars.  This is done by QE and by interest rates that are below natural balances.   
Reducing the available capital for capitalism is another great concern.  When money that is saved by the people, is taken for government debt, that money is not available for investing in homes, cars, businesses, or otherwise available as a base of capital in capitalism.   Capital is needed for capitalism and government debt taking a percentage of that capital is deleterious.   

The Lara-Murphy show is two financial professional.  While not talking directly to this point.  They do give some very relevant information that reinforces the points in this blog.    

 


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Bill Haley
06/16/2016 7:57pm

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    Bill Haley

    Bill Haley started Haley2024 in the spring of 2013 in an effort to do his part in restoring freedom to America

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