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 »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

TurboTax Articles

Know The Key Dates For Health Care Reform

"Open enrollment periods for the health insurance marketplace under the Affordable Care Act are limited" says Mac Schneider, a retired certified public accountant from Albion, Michigan. ?Avoiding tax penalties requires awareness of important dates that may vary year-to-year.? As well as key dates, there are time cycles and coverage gap allowances important to health insurance coverage under provisions of health care reform.

Deducting Mortgage Interest FAQs

If you're a homeowner, you probably qualify for a deduction on your home mortgage interest. The tax deduction also applies if you pay interest on a condominium, cooperative, mobile home, boat or recreational vehicle used as a residence.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Add a Comment

*0 / 3000 Character Maximum