Social Security Reform Unveiled in Senate

[mpsteve]

Here we go again, folks. Senator Lindsay Graham now.

http://biz.yahoo.com/rf/031118/congress_retirement_1.html

Via privatization, if each American opts to invest 2% of their FICA taxes into a personal retirement account and relinquish approximately 55% of the benefit due to them when they reach age 67, each of their private accounts will not be capitalized with the 2% that they had been paying into the system thus far! Upon implementation of private accounts, each person (with their newly created SS investment account) will probably start at $0 and the 2% that each of them had been paying up until the eve of the implementation of privatization will be GONE forever. In other words, their money will have been stolen!!!

I have paid thousands and thousands of dollars thus far into SS, which means I am entitled to a certain amount of benefit when I reach 67. If I opt to put 2% into a private account I will have to give up approximately 55% of the benefit due to me at 67. Therefore, I am concerned that the 2% I have been paying into the system thus far will be flushed down the toilet for lack of a better way of expressing my anger. My private account won't start with the thousands I paid so far. It will probably start at $0. Thus, I will have in effect given my money to Washington for NOTHING in return.

Be very wary of these privatization advocates, people!

[Frodo]

1. Where are your numbers from ?

The article doesn't mention any of the figures you give. It talks about 4% into a private account and does not list what percentage of your benefit you would sacrifice.

As you give the equation (2% exchanged for 55% of benefits) it doesn't make sense for anyone. But 4% vs... say... 40% of benefits? That would make economic sense for lots of younger workers. If I didn't give up the diasbility benefit now, I would make that trade (from an economic standpoint, not a public policy one).

[Clovis Sangrail]

2. you are suprised?

I also have put thousands into SS, and have ALWAYS been mad as hell about it... because I've NEVER believed that there will be a Social Security for me when I retire. (At least nothing beyond a token)

That belief is reinforced on a regular basis.

The only way anybody under 30 or so is going to see any of the SS money that is taken out of their paychecks is if they become disabled NOW.

[Frodo]

4. Actually, you make their argument for them in some ways

Younger voters often feel the way you do.

I often ask these questions of the audience in retirement planning seminars for the 25-40 crowd:

1) How many of you believe that we will eventually put a man (woman) on Mars?

2) How many of you think we will find life on Mars when we get there?

3) How many of you think Social Security will provide a substantial portion (or any) of your retirement income when you retire?

Question one gets about 2/3-3/4 of the audience raising their hands. Question two gets maybe 1/4-1/3. Question three might get a couple hands.

"Moral of the story? More people beleive in small green men from Mars than have faith in Social Security"


It isn't "true", but it "rings true" to many younger voters. Would they trade a big chunk of a future benefit they don't expect for a cash balance retirement account now? Sure! And it's an issue that may cost us next year. The question is whether there are more 55-60 year olds voting worried about the benefit they were going to get in a few years than 25-40 year olds voting the other way.

[xxqqqzme]

13. disability my ass

it took me 5 years and I had 2 get an attorney B4 I got my SS disability

[jbutsz]

15. My brother

Took him and an attorney - and trips to the psych ward courtesy of Workman's Comp Ins people taunting him (refusing to pay for his meds every month) - to get his SS disability, too. :grr:

[Cha]

3. This is the Very reason I got into politics in 2000

..Social Security! I wanted to be sure it's there for me and others who really need it. I figured I'd better be willing to work for it's availability. Well, it's so much more than Social Security now but I still will need it along with Millions of others.
What? They think we won't notice that they are trying to bilk us?

[pansypoo53219]

5. just the right time

for another stock market crash

[quaker bill]

6. Very wary

What most people don't get about this proposal is that it is a way to federally mandate investment in the stock market. If you understand the market, there is a real problem in this concept.

I invest in the market personally. I do not have a 401K or an IRA. I choose to pay taxes on my money first.
Why?

Because this is the way the big boys play. Not that I am all that wealthy personally, but because like the rich, this choice gives me the option to move quickly into or out of an investment. Big money does not stay in the market in bad times, it moves to other forms of investment.

Your SS privatized account will be obligated to the market. Most proposals for this indicate that you will have limited choices within the market and limitations on the number of asset reallocactions during the year. You will not be allowed to cash out this account when times are bad.

These accounts will be the equivalent of fattened cash cows tied to a post and prepared for slaughter at the hands of speculators. There is nothing market speculators want more than to have 4 percent of the national payroll consistently invested for their grazing pleasure. The proposal obligates the taxpayer to be the much desired 'greater fool' who will just buy and buy even more every two weeks. This is an enormous financial catastrophe in the making being marketed on fear and greed.

What is it about Enron and the dot bombs that people don't get? Does anyone think this was a first and could never happen again? Sorry, it was not a first and no reform has occurred that would prevent it from happening again.

The bottom line is, if the market falls in the months before you turn 67, you are toast. The government will bear no responsibility for your fate. It is the hallmark of republican governance to abdicate the responsibility to govern at any and all costs.

Social Security, with minor adjustments is easily financially sound until 2075 and perhaps beyond. The myth that people now in their thirties cannot count on this system is a lie. We can afford it for the indefinite future with leadership that has the spine to make it happen.

[Upfront]

7. Thank You Bill

I have never had brains enough to look at it that way. I think you are correct.

[54anickel]

9. Amen! Very well put. That's my biggest problem with 401Ks!

[VolcanoJen]

14. Bill, you need to go on Crossfire!!

Thank you for explaining this issue in a way we non-savvy consumers can appreciate and understand.

Brilliant writing, and you should be commended for your ability to take such a complicated proposal and apply the real-world effect to it.

[jpgray]

8. Don't forget the AARP is already leaning towards endorsement of this pap

It's really incredible that an organization representing those who fought in WWII would actually help destroy the New Deal.

[Cha]

10. Wouldn't I know an organization I belong to

for auto insurance purposes is stealth repugnant organization?

This makes me sick and I want out. I will look for cheaper car insurance.

[jpgray]

11. Don't forget their wholehearted support for the presc. drug bill

That bill will destroy Medicare as we know it, and they are backing the bill with 7 million dollars in the form of a rigorous ad campaign. AARP has truly stabbed its members in the back.

[SharonAnn]

12. I doubt that Mr. Novelli served inh WWII

And he probably "has the AARP seniors in the bag for the GOP".

Like he does for the Prescription Drug bill

--------------------------------
"Mr. Novelli claims he has his AARP seniors in the bag for the GOP."

http://www.buzzflash.com/buzzscripts/buzz.dll/quote

Former Ad Agency Exec Who Heads AARP Wrote Preface To Gingrich Book On Healthcare: Novelli Lavishly Praised Healthcare Ideas Of Discredited Former House Speaker And Favorite Wing Nut
A BUZZFLASH NEWS ANALYSIS

Seniors and Democrats were stunned when the AARP announced its support of the Trojan Horse Republican Medicare bill.
The AARP message board is burning up with rage against the AARP and its CEO, William D. Novelli, the former public relations whiz kid. Seniors appear to be canceling their memberships and calling for heads to roll at AARP headquarters.

But Novelli defiantly dismissed membership outrage at his alliance with the Republicans, who see the proposed Medicare bill as the first step in the privatization and dismantling of the senior health insurance program.

In response to Senator Tom Daschle's tart prediction that he would face a revolt within his organization over this bill, Novelli said, "There's not going to be a revolt within AARP. There's going to be a problem if Congress fails to pass this legislation."

Mr. Novelli claims he has his AARP seniors in the bag for the GOP. But is being an enthusiastic supporter of Newt Gingrich's wing nut healthcare plan for America doing the best for seniors?

Novelli is such a fan of Gingrich that he wrote a preface to Newt's babbling right wing treatise on how to destroy the healthcare safety net for seniors and other Americans: "Saving Lives & Saving Money." This is what Novelli said in praise of Gingrich's book: "Newt's ideas are influencing how we at AARP are thinking about our national role in health promotion and disease prevention and in our advocating for system change."

See the rest at http://www.buzzflash.com/buzzscripts/buzz.dll/quote