The end goal is to kill the beast. This was a trial balloon to see how much progress they've made with the public in getting them to buy into the "crisis" mantra. The idea of a crisis and "big gubbermint" stealing your money has been swallowed hook, line and sinker. BeelzeBush has actually been quite successful in his role.
http://www.truthout.org/docs_2005/020705F.shtmlsnip>
Influenced by Ferrera, Cato published a second paper in 1983 that served as a political manifesto for turning over at least some of Social Security to the private sector.
It recommended:
- Consistent criticism of Social Security to undermine confidence in it.
- Building a coalition of supporters for private accounts, including banks and other financial institutions that would benefit from them.
- Assuring "those already retired or nearing retirement that their benefits will be paid in full."
- Legislation making private savings plans such as individual retirement accounts more available and thus more familiar.
Making it easier for more Americans to set up accounts, authors Stuart Butler and Peter Germanis said, would make "it in practice a small-scale, private Social Security system that can supplement the federal system ... we will meet the next financial crisis in Social Security with a private alternative ready in the wings, an alternative with which the public is familiar and comfortable and one that has the backing of a powerful political force."
At another point, they said that expanding the IRA accounts "is purely political. Expanding the IRA system in this way would make it a private prototype of Social Security."
One thing they couldn't plan, but which benefited them greatly, was the bull market of the `80s and `90s. Soaring stock prices drew more people into the markets and made investing very attractive. In the 20 years after 1983, the percentage of eligible employees investing in private 401(k) retirement accounts soared from 38 percent to 75 percent, according to the Profit Sharing/401(k) Council of America.
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And I won't bee so sure that bull market wasn't "planned". Greenspan and his nurturing of liquidity through margins and derivatives did play quite a role in that bull market and the "new economy" mantra. The following article is from 2000.
http://www.epinet.org/content.cfm/Issuebriefs_Ib136snip>
Much of the recent overvaluation of U.S. stock markets has been fueled by excessive credit. The share of "margin debt" to the capitalization of the stock market is now at or above the heights reached just before the 1987 market crash. The ratio of margin debt to the gross domestic product (GDP) is now double what it was at that time.
A number of market observers, including financier George Soros and Stanley Fischer, deputy director at the International Monetary Fund, have recently advocated that the Fed let the air out of this credit boom by raising margin requirements. But Alan Greenspan has consistently refused. When asked about this at his confirmation hearing before the U.S. Senate Banking Committee, Greenspan said that he did not want to discriminate against individuals who were not wealthy enough to have other assets against which to borrow in order to play the stock market. Given that people who use margin leverage to buy stock are typically wealthy by any reasonable standard, this is a rather weak rationale for favoring higher interest rate policies whose costs will largely be felt by lower- and middle-income working people.
To the extent that Greenspan is concerned about irrational exuberance in the stock market, raising margin requirements should certainly be the weapon of choice.
Wages - the Fed's real target
Given the absence of inflationary signals, the lack of historical precedent, and the Fed's disinclination to target the stock market bubble directly, it does not appear that preventing an outbreak of inflation - at least as most Americans would understand the term - is the root motivation behind the Fed's recent interest rate increases. Rather, it seems to be aiming at preventing wage increases.
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They are just planting another seed in the public's mind. While I'm sure they would have loved to have the idea of piratizing SS take off, it's no major set-back to their ultimate goal. I'm sure 401Ks and IRAs will again be tinkered with to allow more money to be invested by those who can afford it. Down the road there will probably be some sort of means testing as to who will get SS payments and how much. When working folks find they won't be getting what they thought they had coming from putting into the system all those years they'll scream for it's end.