Reply With QuoteThat's highly unlikely that FDR would have intended SS to ever be a personal retirement system. SS certainly isn't set up for transition.
I can't cite the source since I was listening and not watching (and paying close attention) to some news show, but someone said that in his memoirs, FDR said he envisioned SS to be a private investment program (like Chile's I guess) once it got going.
WRT Bush's plan, its sounding like a real rip off. I heard from Bill Maher that the government could invest this money on our behalf and write the rules so brokerage houses dont screw people, but as payback to them Bush will try to make these accounts "personal and private" so that we can get gouged. And then I just heard the accounts won't really be ours (they wouldn't be anyway, they're government mandated), but that accounts that make too much money will have profits diverted back to the government. In other words, we can take a loss but the state gets rewarded if we make too much.
Anyone else know about this stuff, is it true?
That's highly unlikely that FDR would have intended SS to ever be a personal retirement system. SS certainly isn't set up for transition.
We must be concerned not merely about who murdered them, but about the system, the way of life, the philosophy which produced these murderers. - Martin Luther King Jr. Eulogy for the Martyred Children (1963)
I am greatly concerned about the coming debate. Let's hope for wisdom from all on this one. This could be the most important debate of our generation.
"I am sick and tired of people who say that if you debate and you disagree with this administration somehow you're not patriotic. We should stand up and say we are Americans and we have a right to debate and disagree with any administration." - Hillary Clinton, 2003
Bush's plan looks something like this to me.
Current Social Security works fine for the time being and people like it. However, since people get more out of than they pay in it can't work forever. Old people vote. Baby boomers vote (and their is alot of them). Ok don't mess with them. Young people don't vote. Ok let's screw them by cutting benefits (which I think has to happen). Though simply cutting benefits sounds really bad. People like the idea of getting rich quick off of the stock market, so lets promise the young people that we know we're screwing the overstated oppertunity of a lifetime! Stock markets + benefit cuts + less progessiveness in the distributions (i picked that up from a slate article) = personal accounts = ownership society = freedom!!!!!
I wonder what the fees for all of this will end up costing the america tax payer? To me it seems like they could set up a tiered system where they buy like enough bonds to cover the outlays for the next three years and just dump the rest of the money into a giant index fun run by the government and not have any broker fees at all. Over time (like 30 years from now) the fees Wall Street charged the government seems like they would have to add up to some mindnumbingly large number if they do it the way Bush implied he wanted it done.
It was in his daySS certainly isn't set up for transition.
Why do you say that?Originally posted by Berzerker
It was in his day
We must be concerned not merely about who murdered them, but about the system, the way of life, the philosophy which produced these murderers. - Martin Luther King Jr. Eulogy for the Martyred Children (1963)
From the WaPo:
Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.
The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement.
"You'll be able to pass along the money that accumulates in your personal account, if you wish, to your children . . . or grandchildren," Bush said last night. "And best of all, the money in the account is yours, and the government can never take it away."
The plan is more complicated. Under the proposal, workers could invest as much as 4 percent of their wages subject to Social Security taxation in a limited assortment of stock, bond and mixed-investment funds. But the government would keep and administer that money. Upon retirement, workers would then be given any money that exceeded inflation-adjusted gains over 3 percent.
That money would augment a guaranteed Social Security benefit that would be reduced by a still-undetermined amount from the currently promised benefit.
In effect, the accounts would work more like a loan from the government, to be paid back upon retirement at an inflation-adjusted 3 percent interest rate -- the interest the money would have earned if it had been invested in Treasury bonds, said Peter R. Orszag, a Social Security analyst at the Brookings Institution and a former Clinton White House economist.
"I believe you should be able to set aside part of that money in your own retirement account so you can build a nest egg for your own future," Bush said in his speech.
Orszag retorted: "It's not a nest egg. It's a loan."
Under the system, the gains may be minimal. The Social Security Administration, in projecting benefits under a partially privatized system, assumes a 4.6 percent rate of return above inflation. The Congressional Budget Office, Capitol Hill's official scorekeeper, assumes 3.3 percent gains.
If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's.
http://www.washingtonpost.com/ac2/wp...nguage=printer
"Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way. "
-Bokonon
So the plan is to increase the deficit just to give individuals loans. And all we get out of it is about 21k each when we retire.
We must be concerned not merely about who murdered them, but about the system, the way of life, the philosophy which produced these murderers. - Martin Luther King Jr. Eulogy for the Martyred Children (1963)
What's the point in doing this if the politicians get the interest? Just more middleman with their hands and bribes out...Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.
Because the system wasn't trillions in debt.Why do you say that?
A loan from the government? They're taking income out of paychecks, not giving us money to be paid back later. They just want to put some of that money they take into the market and not give us the profits. I'd think the Democrats would love this, its another tax.In effect, the accounts would work more like a loan from the government, to be paid back upon retirement at an inflation-adjusted 3 percent interest rate -- the interest the money would have earned if it had been invested in Treasury bonds, said Peter R. Orszag, a Social Security analyst at the Brookings Institution and a former Clinton White House economist.
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