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"It's a lateral transfer" -- George W. Bush, 43rd President of the United States
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Saturday, December 11, 2004

Pied Piper?

There are those who say that privatizing Social Security may be beneficial -- remember that SS nowadays doesn't even give you a return at the same level of inflation.

That's not to mention all the problems it will have in the future. Reducing benefits and pushing up the retirement age are the painful, but inevitable solutions we'll have to one day come to terms with. Perhaps putting some of that money into the stock market could generate better returns in order to help relieve the squeeze. Some believe it could solve the problem entirely.

And some folks believe that the President's scheme to privatize a portion of SS is just a red herring, designed to start us on the slow roll to abolishing social security altogether.

Yesterday, Josh Marshall made this claim.

He says:

It wouldn't be abolished overnight, of course, but phased out over time. So any oldsters collecting benefits now wouldn't need to worry. And the same would probably go for pre-fogies too ... say, anyone over 55.

But that's the essence of it: abolishing Social Security or not.

So here are some questions:

Should we abolish Social Security and replace it with a system of loosely-federally-regulated 401ks, or not? Why?

Don't you suspect that a number of representatives in the federal government might see this as a goal? How many do you think in the House? The Senate?

In other words:
With the conservative wing of the Republican Party controlling the party, couldn't it just be possible that this is what they have up their sleeve?

Or could Bush ever manage such a feat? Getting it past the public would be a challenge.

But if it happens slowly ...

Should we follow President Bush down the road to privatizing social security, hoping he won't drive us off the cliff? Or are you confident that we can slam on the breaks, even with him in the drivers' seat?

On Mr Bush's irresponsible plan to accomplish SS privatization, please see yesterday's Bull Moose.


Anonymous Anonymous said...

Understanding how the market works long term, having people invest in the market vs in Social Security makes much more sense to me. The rates of return are significantly better. In the current system, the rates of return are so low that they do not keep up with inflation. Therefore, the current system is acutally losing money (in terms of buying power)! However, there are some caveats that need to be included. First, as I understand the current proposal, only a portion of the Social Security taxes would be available for investment. That is a good idea in that Social Security covers many more programs than retirement. Those other programs will either need to be eliminated (which is not part of the current debate nor have I heard of any suggestions that such a thought should be part of the debate) or continue to be funded. Second, the choices that would be included are fairly conservative. Conservative investing is not the best place for a young person to be, but what is proposed will still bring significantly better rates of return than the system currently realizes. Finally, I think that a basic education on money and how it works should be required in high school. Most people, at least according to my experience, do not understand money, insurance, mortgages, credit cards, nor stocks, bonds, mutual funds, and the market in general. In fact, there are alot of misunderstandings and, as a result, greed and fear tend to control how people react to the market. This situation is totally unnecessary. If such an education were available, it would help solve many of the retirement problems we are expecting to face. - Chuck

12/11/2004 05:45:00 PM  

Blogger Gustav said...

All that sounds great Chuck.

[A]s I understand the current proposal, only a portion of the Social Security taxes would be available for investment. But do you trust them?-- with congress already spending "like a drunken sailor," getting rid of a lumbering beast like SS has got to look attractive. Check out who's on the panel.

This blogger also finds it hard to believe that they'll stop at "a portion."

I think that a basic education on money and how it works should be required in high school.They can't even afford music, arts, or sports programs in the high schools anymore. And now they want to give public school money to the private schools. There's an education in money for you.

12/15/2004 01:04:00 AM  

Blogger Gustav said...

I double-entered and it still ran the citations into the answers. I'm working on it, I promise.

12/15/2004 01:06:00 AM  

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