YOUNG MICHIGANDERS WILL LOSE $152K EACH IN SOCIAL SECURITY BENEFITS

[Kevin Spidel]

NEW REPORT: YOUNG MICHIGANDERS WILL LOSE $152K EACH IN SOCIAL SECURITY BENEFITS WITH PRIVATIZATION

Rep. Levin Joins Fellow Michiganders to Shed Light on Privatization's Lesser-Known Details Before Presidential Visit Tomorrow

DETROIT, MICH. - A typical 20-year-old Michigan resident will lose $152,000 during retirement if Social Security's guaranteed benefit is replaced with a guaranteed gamble, according to a report released today by the Institute for America's Future. It would also mean a 15 percent cut for a 45-year-old worker today and a 25 percent cut for a 35-year-old worker in Michigan.

Rep. Sander Levin, D-Mich., joined other Michiganders to release the report on a conference call with reporters today, one day before President Bush is expected to visit Detroit to push his plan to replace the trusted Social Security system with a risky investment plan.

Rep. Levin opened the news conference, noting that privatizing Social Security would take away the bedrock of retirement security that has given millions of seniors independence and economic stability.

"Diverting Social Security funds into private accounts means major benefit cuts and massive borrowing," said Rep. Levin. "Far from resolving the long-term challenges facing Social Security in 40 to 50 years, the president's privatization plan would make it worse, and bring about the dismantling of Social Security through benefit cuts and massive borrowing."

Alliance for Retired Americans secretary-treasurer Ruben Burks joined Rep. Levin on the news conference call. Burks noted that President Bush's plan will not only open up the door for corruption, but also for mismanagement of workers' retirement accounts.

"Privatization would only make the close relationship between Washington Republicans and Wall Street cozier," said Burks. "People may think they have safe retirements but find they have invested in fraudulent companies with crooked accountants, like Enron."

Burks also noted that his group, the Alliance for Retired Americans, is working with the Campaign for America's Future, which is promoting the efforts of more than 20 organizations opposing President Bush's privatization plan, including USAction, ACORN, the American Federation of State, County and Municipal Employees and others. The groups unleashed a broad assault on the president's privatization plan in all the cities he visited last week with daily news conferences, grassroots mobilization and advertisements.

Professor Matthew Shapiro, who is the chair of the University of Michigan Department of Economics and formerly served on the Council of Economic Advisors for both the Clinton and Carter White Houses, noted that the President Bush's push for privatizing Social Security benefits could hurt our national savings in the long run.

"It's a matter of macroeconomics," said Prof. Shapiro. "The president's plan to privatize Social Security does not increase savings and it doesn't save Social Security. As a matter of fact, it could create false hopes and lead folks to cut back on much-needed savings for retirement security."

Byron Frazier, 30, also spoke to reporters on the conference call, noting that the market will probably drop sharply when the baby boomers retire and take their money out of investments. Frazier is not prepared to rely on a volatile market for his retirement security.

"Young people already have enough to worry about-how we're going to pay for school, if our friends are going to come back safe from Iraq, if we'll be able to afford health care," said Frazier. "And now Bush wants to jeopardize our future financial security by making us gamble our retirement in the stock market? It's just not right."

There are currently 1.7 million people in Michigan who depend on Social Security's safety net. One million of these beneficiaries are retired after a life of work. A retired worker in Michigan received a Social Security check averaging $895 each month in his or her mailbox in 2003.

The president's privatization plan adds $15 trillion in transition costs over 40 years, according to the House Budget Committee Democratic Staff Review, and according to the National Women's Law Center, the president's plan would cut Michigan income

[leftyandproud]

1. This assumes the personal account will be "lost"

yes, the GUARANTEED benefit may go down 150k but this does not take into account the higher return that could be achieved in a personal account. If you are going to attack the idea, attack it...but be honest about the possible benefits also. Otherwise, you lose credibility.

[buff2]

5. With the markets going up and DOWN......

I think it's a crazy idea. They need to leave Social Security alone. Force the Senate and Congress to skip their yearly pay hikes. But nooooooo.....they can't do that,the selfish greedy asswipes.

[vpigrad]

6. Sigh

Higher return? Just look at what's happening to all of the repuke run companies. They're now work nothing! Why is it a big stretch for you to understand that it could also happen to you? I had several friends that had their life savings in Cendant and Enron that now are penniless. I don't know a single person that's ever made money in the repuke stock market scams. Everyone knows that the little guy loses every time. If SS money goes into the stock market, we will probably lose every single penny of it. That's the way the system is setup.

[leftyandproud]

7. anyone who put their life savings in a single stock

deserves to go broke.

The fact is, the BROAD market...the Wilshire 5000 index (actually around 7000 stocks) has averaged 11.9% over the past 80 years. Investing 50% in this and 50% in inflation indexed bonds would provide a very decent return for workers in their 30's today...much better than what they can expect from social security.

[nodictators]

8. Bush has a One-Two punch for the People

First, there are the private accounts, which do nothing for the SS "crisis." People opting for them forfeit something like $78,000 in future benefits on day one. You have to earn it back. Based on my own on-going analysis, that's dicey.

Second, there's the matter of "fixing" the "crisis." This is what Rep. Levin is apparently talking about. There is a second round of cuts for everyone, except, possibly for those over 55.

Read this:

http://www.startribune.com/stories/1519/5223806.html
Last update: February 5, 2005 at 7:03 PM

Editorial: Young workers/The real victims of Bush's plan
February 6, 2005

There are so many deceptions to discuss in President Bush's plan for dismantling Social Security, and many of them require complex explanations to show just how deceptive they are. For now, let's take on a couple. Please pay attention, young workers, because you get taken to the cleaners by his plan.

The structure of Bush's private accounts isn't new; it was offered as "Plan 2" by the 2004 President's Commission to Strengthen Social Security, so it has been pretty well studied.

In addition to the private accounts, the Bush plan envisions future benefit cuts for everyone. The line being peddled by the White House is that private accounts would more than offset the cuts, leaving younger people better off. That is simply not the case.

BTW, Bush also plans to knee everyone where it hurts with his flat tax.

[NYC]

2. Good article.

Thanks for posting. People need more information.

[buff2]

3. That is why the chimp in thief is "preying".....

on the most vulnerable....the young people. And they are drinking the Kool-Aid like good little boys and girls. :puke:

[Tempest]

4. Montana study came up with the same results

http://www.leftinthewest.com/

The Institute for America's Future has a new report on Montana (pdf)
that finds the average Montanan would lose $151,703.00 with Bush's
privatization.