Forbes: If you were wondering how the federal government is going to unload those trillions of dollars in long-term Treasury bonds it’s been buying for the past five or so years—quantitative easing is the technical term—President Obama dropped an anvil hint in his State of the Union address last week. You’re going to buy them, with the retirement savings you’ll be putting in the President’s new MyRA program.
If ever there was a misnamed initiative this one ranks near the top. It’s a mash-up of My and IRA. It implies a greater level of possession than the familiar Individual Retirement Account, which came into being forty years ago during another retirement crisis—the 1970s, when a deep, stubborn recession drove corporate defined-benefit pension plans into the ditch.
This time, a deep, stubborn recession triggered by the Wall Street institutions that also sell IRAs drove a lot of individual retirement plans into the ditch. The fix was the Federal Reserve’s buying up a staggering amount of Treasury bonds to keep interest rates low and hopefully encourage investment and economic recovery.
Those bonds that our government now owns are yielding low rates at a time when most experts are predicting that rates will be rising again. When rates rise, the value of a bond falls. So U.S. Treasury bonds have become so unpopular not even China wants them.
That means the federal government is stuck with a lot of unpopular bonds and one sure-fire way to get rid of them is to sell them to the American public as a retirement savings vehicle. It’s a wolf in sheep’s clothing.
The piece also concludes with a disturbing prediction: "It wouldn’t surprise me at all if at some point in the near future there was a proposal in Washington to require a percentage of all IRA funds to be invested in debt of the U.S. government."
