Are
Retirement Accounts in Danger?
Are
Retirement Accounts in Danger?
Sam Ghandchi
http://www.ghandchi.com/725-entitlements-watchdog-sec-eng.htm
Are Retirement Accounts in Danger?
http://ir.voanews.com/content/blog/1532395.html
آیا صندوق های بازنشستگی در خطرند
http://www.ghandchi.com/725-entitlements-watchdog-sec.htm
Related Artciles: http://bit.ly/2Zd9Kef
The Great Depression and stock market crash of the 1930s in the United States
was a sobering experience, not only for stock owners but also for the
government. In response to the shock waves of the market collapse, United States
government formed a watchdog regulatory body called the Security and Exchange
Commission (SEC).
SEC will soon be 80 years old and no one doubts its important role in the last
century of its existence. All IPO filings go thru the scrutiny of SEC to make
sure the prices offered match real value in the company that is going public.
Events such as the stock market collapse of the 1930s have since happened in
countries like Kuwait where they did not have such regulatory watchdogs and many
firms listed in their stock exchange turned out not to be worth their reported
value. But in the U.S., thanks to SEC, such disasters have become a rare
occurrence.
Considering the current state of the world economy, especially the crisis of
Europe, one wonders if an institution similar to SEC is needed to monitor the
commitments that governments are making to people for their retirement benefits.
Individuals have contributed to such funds all their lives with the hope of
using these accounts as source of income when not being able to work in their
old age.
For example, the austerity measures in many European countries are wiping out
retirement accounts. The strikes are very understandable in those countries
where people are losing the benefits they had paid for throughout their lives.
The bankruptcy of states such as the Greek government is as devastating for the
people of that country as the stock market collapse of 1930s was for the
American people.
Even in the United States, some cities like Stockton, California have recently
gone bankrupt and many benefits owed by the city government of Stockton to its
residents are now in a precarious status.
Protection of citizens’ entitlement benefits, whether the accounts are private
or government owned, is even more serious than the stock investment accounts
that SEC monitors. In fact, the contributions people make to retirement accounts
is for their essential living during old age, whereas stock investment is mostly
expendable income.
First, we must ask whether it is necessary to form a new regulatory body or
whether currently existing government agencies can adequately address the issues
involved. Next, we need to ask how such a regulatory body could audit checks and
balances of the contributions that have already been made by the citizens,
regardless of whether the entitlements are from the government or through
private firms. Lastly, for such a watchdog, either NGO or state agency, to be
able to monitor obligations owed to citizens by nation states, it would need to
be backed by a global authority like a Worldwide Federal Reserve, which
currently does not exist?
The above may seem like formidable issues to overcome but leaving things in
chaos may be a recipe for disaster in the future, perhaps much worse than the
situation in Greece and Spain that we are witnessing today.
Hoping for a democratic and secular futurist republic in Iran,
http://www.ghandchi.com/index2.html
Oct 25,
2012
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