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 Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

TurboTax Articles

Are You Exempt From Health Care Coverage?

The Affordable Care Act, or Obamacare, is an individual mandate that requires all eligible Americans to have some form of basic health coverage by 2014. Those without insurance will receive a penalty when they file their tax returns ? that is, unless they have an exemption. TurboTax's Exemption Check can help you find out whether or not you qualify for an exemption.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

Mortgage Refinance Tax Deductions

When refinancing a mortgage to get a lower interest rate or obtain more favorable loan terms, you're really just taking out a new loan and using the money to pay off your existing home loan. In general, the same tax deductions are available when you're refinancing a mortgage as when you're taking out a mortgage to buy a home.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

Rental Property Deductions You Can Take at Tax Time

Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture. If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.

Add a Comment

*0 / 3000 Character Maximum