If you’re poor, you’re going to stay that way.
Cyprus has agreed to shrink its bloated financial industry and tap big depositors at its two leading banks for billions of euros, clearing the way for a €10 billion European Union bailout the island nation needs to avoid collapse.
The deal with the EU was struck early Monday after days of frantic negotiations that followed the rejection by Cypriot lawmakers of Plan A. That proposal, unveiled little over a week ago, would have imposed a tax on all account holders to raise funds to recapitalize the failing banks.
Now the new bailout plan will protect all deposits of less than €100,000 euros but is likely to mean much bigger losses for account holders with more than €100,000 at the two biggest banks — the Bank of Cyprus and Popular Bank of Cyprus.
Popular Bank will be broken up immediately. Its viable assets will be integrated into the Bank of Cyprus, and its non-performing loans will be moved into a “bad bank” to be wound down.
The “haircut” for Popular Bank depositors will raise about €4.2 billion, while shareholders and bondholders are likely to be wiped out. The scale of depositors’ contribution to the restructuring of Bank of Cyprus has yet to be fixed.
“Haircut”, “wiped out”. Sounds like a plan!
But then, don’t all have to pay their “fair share”? How else can they “spread the wealth”? Actually, Cyprus sounds like that old Somerset Maugham description of “a sunny place for shady people”, so WTF do I care what happens to them? If Detroit were an island nation, it would be Cyprus.
What I do f-ing care about is my money, and if you think Cyprus can’t happen here, then you think you can keep your own doctor:
Retirement is an American’s reasonable expectation. We put money into investment plans so that our work today funds our hard-earned leisure of tomorrow.
But many in Washington see our investment accounts not as the expressions of well-planned, disciplined decisions but as untapped reservoirs of wealth they can drain to fix the problems that they caused.
The tax protection that 401(k)s have now can be wiped out by grasping politicians who refuse to do what’s right, which is to severely cut spending.
The war on retirement, particularly 401(k)s, is quiet now. But that’s because it’s a cold war.
And like the postwar tensions between the East and West, it could erupt at any time into a hot war.
One group of retirement plan professionals is warning that the hostilities might be closer than many of us think. The American Society of Pension Professionals and Actuaries launched on Monday, according to Reuters, “a media campaign intended to educate U.S. employers and workers that the federal government might consider changing the tax benefits of retirement savings accounts.”
A website set up by the ASPPA advises account holders to tell lawmakers to “keep their hands off your retirement savings” and explains that “Congress needs to reduce the deficit, and part of deficit reduction will most likely be ‘tax reform’ that increases tax revenue” — the strong suggestion being that Washington is coming after Americans’ 401(k)s.
If the ASPPA were alone in issuing its warnings, it could be written off as the hyperbole of an isolated group. But Washington’s lust for Americans’ retirement investments is well documented.
President Obama’s National Commission on Fiscal Responsibility and Reform, for instance, proposed lowering the cap on the amount workers could place in their 401(k)s without incurring taxes.
And nearly three years ago, Newt Gingrich and Peter Ferrara wrote on these pages about the Treasury and Labor departments “asking for public comment on ‘the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams.’”
“In plain English,” said Gingrich and Ferrara, “the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.”
Where have we heard that before?
If health care decisions are beyond the average American’s ability, as liberals believe, why shouldn’t retirement also be? And if the government’s going to be responsible for your senescence, it’s going to need your money to pay for it. And for those “less fortunate” than you. (Don’t you love that phrase? You successful people were merely “fortunate”. Life’s piñata just spilled open at your feet. Now, we’re going to make you “share”, by any means necessary, with or without your cooperation.)
How great is this?
Russian prime minister Dmitry Medvedev has reacted furiously to the bailout deal, saying:
In my view, the stealing of what has already been stolen continues.