The New York Times spells it out for you today; here's highlights from the lead editorial.
What you deposit into your private account would be subtracted from your regular benefits: "Your Social Security benefit would be reduced, dollar for dollar, by the amount of money you deposit into your private account and an additional charge amounting to 3 percent plus the rate of inflation. All the money that is drained off would presumably go to pay for the enormous upfront government borrowing - $4.5 trillion over the next 20 years - that privatization would require."
Your account would have to grow at 3% over inflation to do what Bush promises: "People whose private accounts steadily earned three percentage points over inflation throughout their working lives would wind up with exactly what they would have gotten if Social Security remained untouched. Anyone who earned less than that would end up with less than is offered by the current system."
It doesn't solve the problem: "Establishing private accounts does nothing to solve the long-term shortfall in the system."
Privatization will require drastic benefit cuts: "All in all, they would leave the average worker with a government benefit worth only about 10 percent of his or her preretirement earnings. (Currently, Social Security replaces about 35 percent, on average.)"
Necessary safeguards will stifle growth: "Mr. Bush assured listeners that the government would prevent people from making bad decisions by restricting their investments to a conservative mix of stocks and bonds. But the more restrictions there are, the harder it would be for people to achieve the outsized returns that the administration has generally promoted to sell the public on private accounts."
Your heirs will only inherit a portion of your account, unless you die before you retire: "That works entirely only if you die before you retire. Under a scheme that is going to take a while for the public to digest, the White House wants to require new retirees to use their private accounts to buy annuities large enough to keep them above the poverty line for the rest of their lives. The most they could leave to heirs, then, would be what is left over after the annuities are purchased."
Bush has never given us a reason to trust him. Now is no time to start.
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6 comments:
but he said it's MY money, weren't you listening?
Mike, if it ain't broke, don't fix it. Social Security is just fine. Raising the tax cap from $90,000 will pay for the shortfall, or rolling back Bush's tax cuts on the top 1% of earners will also cover it; or possibly we could combine those two options with a benefit cut.
What you seem to think is one of Social Security's flaws is actually its greatest strength: there is no permanent fix, and there shouldn't be. The program is already 60 years old and we've undergone a dramatic demographics shift in this country. The figures we're talking about now are based on 75 year projections. What if the projections are wrong? Bush's "plan," which won't work any way you slice it, will lock us into a hole we can't get out of. Tinkering with Social Security every decade or so, making little adjustments here and there, is a completely legitimate idea, and far more pragmatic.
You must completely misunderstand what Bush is trying to do. He is not fixing social security. He's fundamentally changing the program and eliminating its most important aspect, which is a guaranteed amount of money that taxpayers can count on when they retire. He's getting rid of that guarantee! It's craziness. Plus, all his plans are based on ridiculously rosy assumptions of economic growth. He's going to bankrupt millions of people. Contrary to your statement, he's actually ripping the "security" out of the program.
I don't intend necessarily to defend the current Democratic congressional leadership, but if you don't think progressive leaders out there haven't been coming out with easy, sure-thing, inexpensive solutions to the problem, then you just haven't been paying attention. And since you think Bush has a plan that will work, it pretty much confirms that suspicion.
you suck
Furthermore, no one can give me a reason why Democrats would object if Bush's numbers were actually right and if this were a good idea. This should not, actually, be a partisan issue, but I guess it's become one.
If Bush gets his way, the finance industry reaps billions, and he'll go a long way toward achieving the conservative desire to end "entitlement" programs.
Let's say for the sake of argument that he's right. (He's not.) Do you honestly think that Democrats -- and many Republicans, as well -- would oppose him simply for the sake of obstructionism? Why? What good would it do?
Social Security is OUR program. If Bush was right, that it was heading for financial disaster, we would be setting up our important constituents for an enormous fraud. There's no points to be had for opposing Bush when he's right. (Fortunately, he never is.)
People keep telling me Paul Krugman lies. For God's sake, why? What does he stand to gain by lying about Social Security and saying it's in a better position than Bush says it is? You people make no sense sometimes.
To hell with social security. When I am old I am going to shoplift to survive because, hey, who locks up crazy old men?
Well, it wouldn't be a scam if Bush said he thinks reform is necessary because he's opposed to the idea of tax-payer funded welfare for the elderly; if he said that it was your responsibility to plan for your own retirement instead of saying he was creating an opportunity to do better than SS; if he said it was a great boon to the finance industry which needs all the help it can get after all those crippling corporate scandals which have sent as many as 3 people to jail; if he admitted that it will actually cost taxpayers more in the long run to do this than to leave it as is.
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