Why is Trump putting limits on 401Ks?
There are a couple of ways this is great for the 1% and horrible for you. The 401K plan was originally created to encourage skilled workers to join a company and stay with them.
Now, because of automation and the collapse of the job market, full time, long term, skilled workers are more of a liability than an asset in most cases.
Companies like to turn over workers and replace them with someone cheaper on a regular basis. You want to keep them long enough that the cost of training a replacement isn’t too high but not so long they get a decent wage.
Once your employee reaches a certain cost threshold it’s just cheaper to replace them.
Unfortunately for the employer the 401K plan has become a staple of employment in most industries and those companies are expected to pitch in and at least partially match the money that the employee puts into the 401K.
To people like Trump this is paying for “company loyalty” that they don’t really want or need any more. They would rather not have to pay anything other than wages and if you would work for free they would love that even more.
Beyond this money the company considers itself “wasting” on a “disposable” employee there is larger picture. The money that goes into your 401K is actually put into a mutual fund and gambled on the stock market. These funds are regulated so that the risk is low. Stock brokers don’t make as much money on low risk stocks.
That is the reasons that the 2008 stock market crash wiped out so many people’s retirement funds. Investing in mortgages was considered to be one of the “Safe bets”. A lot of 401K had unknowingly invested in toxic assets thinking they were safe.
This cap on 401K investing is not only designed to save employers money it’s also also encouraging you to put more of your money in the bank.
You’re going to hear a lot from Republicans about “Retirement Savings” and “Health Savings Accounts” where you put your money into the bank and save it for an emergency.
Both the 401K cap and the cuts to healthcare as designed to motivate you to put your money in the bank and “Save for your future”.
To understand why, you need to look at what the Clintons did by deregulating banking. At one point the banks were not allowed to gamble on the stock market with your money. They were only allowed to gamble with the money they made from fees and overdraft charges.
The DNC and the Clintons worked hard to make sure that changed. Now there is no difference between your money and the bank’s money as far as the banks are concerned.
That is why when the banks failed Obama had to bail them out. They didn’t just lose their money in the 2008 crash, they lost everyone’s money.
Side note: There is a very good movie every adult should watch called “The Big Short”. It explains the 2008 crash and a lot about how the market works.
Nothing has really changed since that time. They just started doing the same thing all over again and we are going to see the same results only much, much worse.
As Trump likes to point out quite often, the stock market is breaking records every day. The 1% are getting wealthier than any human ever imagined would be possible.
There are people making so much money that they make what the middle class pulls down in a year, in one hour and they aren’t doing anything to earn it.
The modern stock market is ran by computers. No people need apply. Transactions happen so fast that humans can’t even keep up. All they know is that the more they feed the market, the more money the market rewards them with.
No real value is being created, it’s all imaginary. Nothing real is being created, no service is being rendered, it’s just computers talking back and forth. Purely fictional money.
It’s all a lie that the wealthy people agree is true and they are going to keep acting like it’s real until the bubble finally explodes and the economy evaporates.
That my friend, is where you come in. They need your money to feed the beast and keep the cycle going! Do your part to keep the lie alive! Stop investing in those nice, stable, 401Ks and instead feed your money to the banking beast so the super-rich can get richer!
If you work very hard, and save your money, when the market collapses you’ll have the comforting knowledge that while you knife fight over the last can of beans, the 1% will be living on their private islands with gold toilets, underage hookers and mountains of cocaine, thanks to you.
In the end, isn’t that really what the American dream is all about?
PS: If any of you have a 401K or any stock accounts, liquidating 25% of your assets to something that can survive an economic crash like gold, silver, or land is a really, really good idea. The U.S. Dollar is going to be in full collapse by 2020. Mark my words. Global. Economic. Melt-down. 2020.
Don’t say I didn’t warn you.