In a move to help the government make current debt payments, Argentina's President Cristina Fernandez de Kirchner is proposing to "nationalize" the country's private pension system. Translation? The government wants to take away the money its citizens have saved for retirement.

As many countries around the world feel the pain from the credit crunch, Argentina is in an even worse position. The country defaulted on its debts in 2001, and has trouble getting credit in the world markets. Another default (which is very close) would devastate Argentina's economy. The government is looking for any way it can to gather up cash to make the debt payments.

But why take away the money that rightfully belongs to citizens? The private pension system was started in 1994 as an alternative to government pension. Three million citizens voluntarily contribute to the private system, and much like U.S. 401(k) accounts, they can decide how and where to invest their money. This private pension system is attractive to government officials in Argentina, as it currently has about $30 billion in assets. Yet this temporary fix to budget problems will certainly have a massive long-term effect if it goes through, as the government will be forced to replace those assets with retirement benefits in the future.
And then there's the issue of the government seizing private property. Governments do this daily with taxing structures that take away the privately earned and owned money of consumers, and redistribute it as the government sees fit. What does such seizure and distribution do? It reduces incentives for individuals to save, invest, and work hard. Why work to create a life for yourself when the government can come in at any moment and take things away from you?

Do you think such a thing could never happen in America? Think again. It's not such a far cry to think that our government could take away our retirement accounts if it believes it's in the best interest of the country. It could easily promise increased Social Security retirement benefits to everyone in exchange for taking away their private retirement accounts.

And this concept isn't limited to retirement funds. A nationalized health care system would "take away" my ability to purchase the health insurance that I choose and replace it with a government-run program that would likely cost me more and offer me less in the way of benefits.

A plan like this is a slippery slope, and Americans need to keep an eye on these things so that our government doesn't go down the path of doing something similar. Our country was founded on free enterprise and the ability to control one's own financial future. Don't let our government take away our right to choose how to spend our own hard-earned money.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

TurboTax Articles

Video: Tax Guidelines About Gifting

Note: Some of the content of this video applies only to taxes prepared prior to 2012. It is included here for reference only. Find out the tax guidelines about gifting with help from TurboTax in this video on tax tips.

Video: What are Income Tax Rates?

Note: The content of this video applies only to taxes prepared for 2010. It is included here for reference only. Income tax rates change depending on both the amount of money you make and how you made it. Find out about income tax rates with help from TurboTax in this video on tax tips.

Video: How To Reduce Errors on Your Tax Return

Did you know that errors on your tax return can affect the amount of your tax bill and the amount of time it takes to get a refund? Fortunately, TurboTax helps you avoid errors AND be sure you're getting all the tax deductions and credits you deserve.

Does Your Company Need to File Form 1095-B?

A company is responsible for filing IRS Form 1095-B only if two conditions apply: It offers health coverage to its employees, and it is "self-insured." This means that the company itself pays its employees' medical bills, rather than an insurance company. A company that doesn't meet both conditions won't have to deal with Form 1095-B. Its employees might still receive a 1095-B, but from their insurer, not the employer.

Video: Who Qualifies for an Affordable Care Act Exemption (Obamacare)?

The Affordable Care Act requires all Americans to have health insurance or pay a tax penalty. But, who qualifies for an Affordable Care Act exemption? Find out more about who qualifies for an exemption from the Affordable Care Act tax penalty, how to claim an exemption on your tax return and how the Affordable Care Act may affect your taxes with this video from TurboTax.

Add a Comment

*0 / 3000 Character Maximum