WP prints the truth: "Bush’s Social Security plan akin to a loan"

[Bush_Eats_Beef]

Bush’s Social Security plan akin to a loan
Participants would forfeit part of accounts' profits
By Jonathan Weisman
Updated: 5:31 a.m. ET Feb. 3, 2005

http://www.msnbc.msn.com/id/6903404/

WASHINGTON - Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.

The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement. "You'll be able to pass along the money that accumulates in your personal account, if you wish, to your children . . . or grandchildren," Bush said last night. "And best of all, the money in the account is yours, and the government can never take it away."

The plan is more complicated. Under the proposal, workers could invest as much as 4 percent of their wages subject to Social Security taxation in a limited assortment of stock, bond and mixed-investment funds. But the government would keep and administer that money. Upon retirement, workers would then be given any money that exceeded inflation-adjusted gains over 3 percent.

In effect, the accounts would work more like a loan from the government, to be paid back upon retirement at an inflation-adjusted 3 percent interest rate — the interest the money would have earned if it had been invested in Treasury bonds, said Peter R. Orszag, a Social Security analyst at the Brookings Institution and a former Clinton White House economist.

[journalist3072]

1. Survivor's Benefits

Does the idiot not realize there are already survivor's benefits as part of social security?

His argument to the Black community about SS has basically been 'You all die at an earlier age, so why would you pay into a system that is inherently unfair to you?'

What he doesn't understand is that if a Black man at 60 yrs old, who's been paying into SS all these years, dies today, that mans spouse and/or children get survivor's benefits.

So his SS argument is hogwash.

[Walt Starr]

2. It's a BROKER Security Plan, not a Social secuirty plan! n/t

[sabra]

3. I hope enough people will read this article!

[SammyWinstonJack]

11. Print it out and pass it around, email it to everyone you know.

Leave fliers where ever you go. Make people aware because the Media Whores who won't have to rely on SS benefits sure won't inform the American public about the truth behind bush**'s PONZI SCHEME!

[Skinner]

4. Ewww.

That's even worse than I thought.

[Just Me]

24. Rather than dependent benefits, our survivors would receive a pittance.

This S-U-C-K-S!!!!

I am so sick of these plans that enrich the wealthy and create a larger pot of abject poverty in America.

It's disgusting and an outrage.

Since when are the wealthy few so much more valuable as human beings than 95% of the rest of us?

How come the wealthy are being granted so much favor rather than expected to pay an equitable sacrifice for being the ones who most benefit living in a corporate/capitalist nation?

I hate this shit. I really do.

[Al-CIAda]

5. They;ve STOLEN the SS money and now don't want to put it back.

[EVDebs]

20. And what's worse, in order to pay for the Bush tax cuts to the wealthiest

1 and 1/2 % according to David Cay Johnston's "Perfectly Legal".

[Roland99]

6. Rather clear article into what this plan entails.

Certainly has me concerned.

[Skinner]

7. Here's the killer

From the article:

If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's.

If the Democrats can't capitalize on this, we are completely inept. "Congratulations, your Private Social Security account is worth $100,000! Here's exactly $21K for you!"

[Walt Starr]

12. I'm with ya, Skinner. Only bumbling morons could lose on this one!

Seriously, they need to frame this thing and do it NOW! It's a BROKER Security Plan!

[flpoljunkie]

8. Anyone who signs onto Dubya's "personal accounts" is a fool. Check it out.

Under the system, the gains may be minimal. The Social Security Administration, in projecting benefits under a partially privatized system, assumes a 4.6 percent rate of return above inflation. The Congressional Budget Office, Capitol Hill's official scorekeeper, assumes 3.3 percent gains.

If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's.

http://www.msnbc.msn.com/id/6903404 /

[Skinner]

9. Exactly.

Democrats should be repeating this statistic 24/7 to anyone who will listen. It's a disgrace.

And check this out:

With a 4.6 percent average gain over inflation, the government keeps more than 70 percent. With the CBO's 3.3 percent rate, the worker is left with nothing but the guaranteed benefit.

Nothing! You put away a thousand dollars a year, and 40 years later you get... NOTHING?

[flpoljunkie]

14. Yes, and a very much reduced guaranteed benefit, at that-- as much as 40%

In 2000, the average monthly benefit for a disabled worker was $786 per month. If nothing is done under current law, an unlikely scenario, benefits would be reduced approximately 20 percent. A diversion of 2 percent of payroll, which is 16 percent of FICA, as suggested by President Bush during the campaign, would require an approximate reduction in benefits of 40 percent to achieve 75-year solvency. This would mean a reduction of the average disability benefit from $786 per month to $472 per month. Try living on $472 a month and find the money to pay for rent, food, clothing and medicine. As the GAO has said, individual accounts would not make up the difference for people with disabilities.

http://www.ourfuture.org/issues_and_campaigns/socialsecurity/key_issues/bush_soc_sec_commission/readarticle797.cfm

[Bush_Eats_Beef]

15. I wrote Senator Boxer right before I posted this

Hopefully, many other people will take a moment to e-mail their politicians of choice.

Bernie Ward was shaking his head in disbelief last night when he mentioned this article being published today. "You are NOT going to believe what you will read," he said.

Well, it's now in the public view, and I believe it. We need to get past the warm glow of the purple fingers in George W. Bush's base and fight this "proposal."

:toast:

[flpoljunkie]

22. Gets worse. Workers required to buy annuity which could not be passed on!

Plus this kicker:

Workers who decided not to put part of their tax money in personal accounts would presumably be subject to the same benefit reductions as those who participated.

One of the most complicated parts of the proposal involved annuities. As explained by the administration official, a retiree would have to buy an annuity that would have a monthly payment that would make up the difference between what the retiree would receive in traditional Social Security benefits and the official national poverty level.

http://www.nytimes.com/2005/02/03/politics/03social.html?ei=5094&en=cd5916ce33c6185f&hp=&ex=1107493200&partner=homepage&pagewanted=print&position=

[electropop]

10. That's not a loan!

It's a gift to brokers! It's not the gov't loaning out and then getting back money, it's the taxpayer handing over money to the brokers, who split it with everybody _not_ in the plan, then refund a tiny amount of it - if by some miracle the market is doing well at that moment.

[Skinner]

13. And the government manages the account!

But under the Bush system, the government is still choosing the stocks and bonds to be bought with Social Security money, said Jason Furman, a former Clinton administration economist. Individuals would get a limited choice, and the government would still keep most of the returns.

[sabra]

16. But he said we can take control of our nest egg!

[cthrumatrix]

25. it's a lie...govt gets the remaining money when you die

[Bush_Eats_Beef]

17. Another Bernie Ward comment on how the money is "invested"

He said that the money could be used to fund corporations / organizations that feed the GOP beast and elect its candidates. Your "contribution" could go DIRECTLY toward electing, oh...let's just say as an example...Jeb Bush. Your paycheck could become Jebby's "war chest."

This goes way beyond "tinfoil hat."

[pansypoo53219]

18. yet,

snake oil is attractive.
and humans are stoopid.

[Papa]

19. If I understand this correctly, this is kinda like SS stock options right?

You only get the "profit" in your account if it makes money. What a scam!

[Bush_Eats_Beef]

21. Yes, but don't miss the second part...

"You only get the "profit" in your account if it makes money"

AND

the government takes its share out FIRST. As Bernie Ward said last night, if you want to make the 3% that's guaranteed under the current plan, you have to make 6%. The chances of Mr. & Mrs. middle America making an "investment" and hitting a GUARANTEED 6% return are PRETTY SLIM.

:grr:

[Papa]

26. Insanity

"If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's."

This is nuts to me. If I stuck $1,000 under my mattress every year for 40 years, I'd have $40,000 with 0% growth vs $21,000 under Bush's plan with 4% annual growth.

Am I understanding this correctly?

[Bush_Eats_Beef]

27. The math is still fuzzy to me...

...primarily because Bush has not revealed the percentage to which EXISTING benefits will be reduced (because he is not willing to "debate himself in public")

and the percentage that the government will take off the top.

The mattress, at this point, seems like the option with the higher yield.

:grr:

[Nordmadr]

28. Yeah, but the problem is you won't get to choose...

the mattress as an option with that money.

You get "fuck you plan A" or "fuck you plan B".


If you choose not to use the "optional" investment strategy, they will STILL tax you for Social Security AND pay you less benefits.

If you go with putting a portion into "their" investment categories, well I think you get the picture.

Olaf

[unpossibles]

23. thanks!

I was looking for something along these lines defending against some local freeper (who is using the Heritage Foundation's paid propaganda as a source)

[sarcasmo]

29. Wall Street is just licking it's chops over this.

You would only get your return back. Let's say you are twenty right now and invest for forty years. The last year before you retire the market takes a big hit and slam you have very little to retire on. What a bad idea this is all the way around.
In away I hope it passes and all these right wing nut jobs can stand in food lines when they retire and know how the poor really feel.

[Roland99]

30. Which is in more of a crises?

And that's a SS crisis?