J. D. Heyes
Friday, December 9, 2011
There is a saying that epitomizes the dangers of surrendering too much of your independence: “Those who giveth can also taketh away.” With that in mind, it should come as no surprise that in Portugal – and, most likely, a number of other nations in the months and years to come – state-provided pension funds are no longer safe from the government’s all-powerful reach.
As the country continues to drown in a sea of red ink caused by generations of politicians pandering to generations of over-demanding citizens punch-drunk from too many trips to the public winery,the Portuguese Cabinet agreed this weekto transfer the assets from four of the country’s biggest banks to the government treasury, in order to “bridge” a yawning budget gap that threatens to bankrupt the nation.
Portuguese government officials “assured” the European Union that the transfer of the life savings of Portuguese citizens would only be a one-time occurrence, but in saying so they ignored the fact that, in 2010, they balanced the government’s books “by shifting three pension plans from Portugal Telecom on to the public social security system” and are liabilities that “don’t count yet.”
Some of the people’s advocates have already begun to speak out. “This can’t be seen as a future revenue stream in any way,” said Raoul Ruperal from Open Europe.
As bad as it sounds for Portugal – and raiding the retirement funds of millions of Portugueseisbad, that couldn’t happen in the U.S., right?
But it has already happened.
Do you remember last summerwhen lawmakers were haggling over whether or not to raise the debt ceiling? While lawmakers dithered over how much more hock to put the country into, the Obama administration authorized Treasury in May to “tap federal retiree programs to help fund operations,” one report said.
In a letter to congressional leaders, Treasury Secretary Timothy Geithner said he would place “new investments in both the Civil Service Retirement and Disability Fund (CSRDF) and the Thrift Savings Plan G Fund, which is invested in federal securities.” He said retirees would be “unaffected” by the transfer of their pension funds. A news search for stories reporting that Treasury had paid back those funds found nothing, by the way.