Can someone explain Bush's social security plan?

[Dracon II]

Is he trying to privatise social social security?

[Space05us]

I dont know, but I can say this thread wont get any replies.

[Dracon II]

Yeah... I guess this thing's been debated before. I just didn't know what it was all about...

[Admiral]

Ok, the short version. Bush is expected to propose that four percent of social security funds be put into personal retirement accounts, to be managed by the payees. This would not effect people over 55. So, his plan won't include the overall privatization of social security, but if this plan succeeds, he will assuredly try to privatize the rest of it.

[Zkribbler]

Re: Can someone explain Bush's social security plan?

Don't forget, Bush has announced this plan is now on the back burner.

Originally posted by Dracon II
Is he trying to privatise social social security?

"Privatize" no. That's just a buzz word that get a lot of negative reaction, so opponent toss it around.

Admiral's version is pretty accurate.

One of the problems with it is that it is supposed to "save" Social Security. But it'll make the problem worse. By permitting funds to be diverted into personal retirement accounts, less money will go into the pot which is designed to pay future retirees. Thus, Social Security will go broke faster.

Bush postulates that, in the future, people retiring with personal retirement accounts will have more money because their investments will do better that regular social security returns. However, Britain and Chile already have such plans, and many of their retirees don't have enough to live on.

[Dinner]

If the goal is to "save social security" (it doesn't need saving according to the Congressional Budget Office for at least the next half century) and if the belief is that a higher average return could be found in the stockmarket or the bond market (this is true as long as you don't flood the market with a ton of money chasing a few blue chip stocks in which case you'd just create a bubble) then it would be best to simply allow SSI to invest a portion of its income stream into the financial markets.

Republicans seem to e against this and I'm not sure why unless they believe it will weaken their attempts to privitize Social Security.

[KrazyHorse]

Originally posted by Oerdin
If the goal is to "save social security" (it doesn't need saving according to the Congressional Budget Office for at least the next half century) and if the belief is that a higher average return could be found in the stockmarket or the bond market (this is true as long as you don't flood the market with a ton of money chasing a few blue chip stocks in which case you'd just create a bubble) then it would be best to simply allow SSI to invest a portion of its income stream into the financial markets.

DUH

I don't know why you guys are letting the politicians use your SS money to buy low-interest government debt.

Our social insurance scheme (CPP) is run in the way you describe. As a matter of fact, there's a legal limit on how much government debt the CPP is allowed to buy to prevent the politicians using it the way Washington uses SS. The investment panel is an independent body which makes regular public declarations of holdings and returns.

[Dinner]

There was a push to do this is the 1980's when SSI taxes were increased to "save social security" but Republicans were dead set against the idea claiming it would lead to the government controlling major American companies and interfering with their opporation for political gain. They actually had a real point but one which could be addressed with a Chinese firewall just as government pensions currently invest in stocks & bonds without Washington Politicians telling GM or Microsoft how to run their business.

[KrazyHorse]

That's why you set up an independent investment panel like I described...

[Dinner]

The politicians in Washington like how Social Security has to use its money to buy T-Bills because it means Washington essentialy gets extremely low interest rate loans instead of having to pay market rates for its binge spending.

[KrazyHorse]

I know. I just can't understand why you've put up with it for so long.

[Frankychan]

Here....Bush's SS plan.

Insert SS money: A----->into----->Private Business pocket: B.

[BeBMan]

Can't Bush explain his social security plan?

[Frankychan]

I don't think using crayons and stickers would help his case any.

[Dracon II]

Tying social security to the stock market doesn't sound too secure to me...