Relentless Pursuit of Wisdom and Liberty

The weblog companion of, dedicated to pondering, "If Patrick Henry could see us now..."

Wednesday, January 26, 2005

More spin on Social Security personal accounts

It's amazing the lengths to which the opponents of reform will go to cast a negative light on Social Security privatization:
A less-noticed element in most major Social Security proposals, including all three recommended by Bush's study commission in 2001, would impose another reduction for those who choose investment accounts. Retirees would not be allowed to receive both their full Social Security benefit and the entire proceeds of their private accounts.

Instead, at retirement, guaranteed benefits for workers with investment accounts would be reduced based on the amount of taxes used to set up the private accounts. The deduction would be made regardless of how a retiree's investments had fared.
Well, duh! No one anywhere has even hinted at the suggestion that people should be able to divert some of their contributions to a private account, to be owned outright, and then still receive the full Social Security benefit, financed by taxing future generations. Not to mention the continued use of the term "guaranteed benefits" when they are anything but guaranteed, being at all times subject to change at the whim of the legislature (this has been ruled on by a couple different Supreme Court decisions). This is blatant spin-doctoring and hopefully those of us who know better can overcome the attempt to influence those who don't.

From the same article, this is even scarier:
Some proposals take a bigger and more direct bite. Under a proposal by Rep. Clay Shaw, R-Fla., 95% of the accumulated balance in each worker's private account would be transferred at retirement to the Social Security Trust Fund, where it would fund traditional benefits. The retiree would keep only 5% of his account.
Holy cow. So now we have a proposal - by a Republican, no less - to allow people to divert some of their taxes to what he calls "private accounts", to be invested in a choice of a few mutual funds approved by the government, the bulk value of which upon retirement would just go back into the SS Trust Fund. Oh, he'd throw the investor a bone of 5% - for his trouble. Give me a break. I'm shocked that this Republican hasn't yet "gotten" the fact that Social Security reform and private accounts aren't primarily about how much money is in the trust fund - it's about theivery vs. ownership, and about giving people who want nothing to do with Social Security the chance to opt out. In 1999 Rasmussen Research found that over a third of the younger workers it polled would opt completely out of SS, given the chance - even if they didn't get back a cent of the payroll taxes they'd already contributed. They didn't ask me, but you know by now what answer I would have given.


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