Following in the footsteps of Hungary takes from the prudent savers to give to the spendthrifts.
The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
The Bulgarian government has come up with a similar idea. $300m of private early retirement savings was supposed to be transferred to the state pension scheme. The government gave way after trade unions protested and finally only about 20% of the original plans were implemented.
Following in the footsteps of the perfidious Cristina Kirchner of Argentina an assortment of European countries is draining pension money to pay for current deficits. Poland, France, and Ireland are all, in a variety of ways, taking from either individual retirees or large retirement funds.
Even though the US government has crossed the Bernholz warming limit on deficit spending and huge deficits stretch out for years I do not expect the US government will seize personal retirement accounts. More likely it will reduce the size of tax deductions for contributions to such accounts. So you are better off putting as much into such accounts until retirement account contribution limits get lowered.
What I want to know: Once the US sovereign debt crisis develops to an acute crisis stage will most of the account balancing be done by tax increases, spending cuts, or inflation?
By applying an old theory that has been used to explain water flow through soil and the spread of forest fires, researchers may have an answer to a perplexing ecological and evolutionary problem: why locusts switch from an innocuous, solitary lifestyle to form massive swarms that can devastate crops and strip fields bare. Their report, published online on December 18th in Current Biology, a Cell Press publication, concludes that once the insects' ranks grow to a certain threshold size, banding together prevents predators from moving from one patch of insects to the next and easily picking the bugs off one by one.
"A predator can only move continually across a landscape, consuming locusts as it goes, if there is a landscape-spanning pathway of connected, high-yielding patches containing locusts in abundance," said Andy Reynolds of Rothamsted Research. "If the locusts were to remain dispersed when their numbers become sufficiently high, then such predator-sustaining pathways would always exist. By grouping together, locusts can reduce the number of connections between patches, and there is a significant probability that the predator will locate too few locusts to sustain itself."
If the most productive are too thinly spread then the majority and a corrupt elite can feed on them. Highly productive people need to be able to form their own governments and basically exclude predators and parasites. Concentrate together where predators can't feed and control the borders. Too late for the United States.