The proposed USA accounts will divert money from Social Security.

[madfloridian]

I am most concerned that the USA (Universal Savings Accounts) proposed by Clinton will destroy the system...even though the DLC emphasizes the "in addition to" aspect. Money will be diverted from those on the traditional program...and that would be inexcusable.

DLC | New Dem Daily | April 23, 1999
Idea of the Week: Retirement Savings for Low Income Americans
http://www.ndol.org/ndol_ci.cfm?contentid=695&kaid=131&...

"President Clinton did not embrace the carve-out approach in announcing his proposal for extending the solvency of the Social Security system early this year. Rather, the President's proposal for private savings, Universal Savings Account (USA), would be an add-on to Social Security. It would give all lower- and most middle-income families an annual $600 federal tax credit to seed a tax-free personal retirement savings account. Most importantly, the federal government (through a refundable tax credit) would match private savings up to $700 per year per couple for low-to-moderate income families. That means an eligible household where the husband and wife each saved $350 per year would wind up with $2,000 a year placed in their USA account. "

Convince me this does not just profit Wall Street, and eventually close the program down. I am open-minded...convince me.

[GOPFighter]

1. Yeah, I don't like this

At first reading it sounds too much like another "feel good" program that will reduce tax revenue and benefit Wall Street. I don't see anyting wrong with the current system of investing in IRA programs to supplement Social Secutriy for retirement.

[girl gone mad]

2. It depends on what you mead when you say Wall Street will benefit.

The brokerage firms will make significant amounts of money off of the fees. Money managers in general should do well. Wealthy investors will also benefit. Stock market returns in general, however, will probably suffer.

Go look at Microsoft's stock chart (MSFT). I think we can expect to see a lot more stocks trading like Microsoft once that money starts flowing into the market. That is to say, there will be far less wealth created in the stock market.

[madfloridian]

3. I guess I mean the people won't benefit.

We will get screwed sooner more likely than later.

[madfloridian]

4. A little bump for this.

Dropped quickly.