The Unsuccessful British Privatization Experiment.

[reprehensor]

Don't use Britain as model for Social Security, official warns

The man in charge of recommending changes to Great Britain's retirement system offers Americans a warning: Beware of changes to Social Security such as those President Bush is urging.

Nearly 20 years ago, Britain adopted a form of personal investment accounts much like the one Bush proposes. Britain also changed the way it calculates retirement benefits to adjust for inflation, keying them to consumer prices rather than wages, as Bush and others are considering for Social Security.

The result: "We have created the most complicated pension system in the world," said Adair Turner, a Merrill Lynch vice president and the chairman of the United Kingdom Pension Commission.

Moreover, Turner said, contrary to the benefits promised when the British changed their system, their new approach isn't increasing national savings, isn't fostering an "ownership society" and workers are retiring poorer than they did before.

[Warpy]

1. Sounds just like what happened in Chile

The only "successes" were among people who would have had a comfortable retirement no matter what happened.

In Chile, the service charges were half of what they were in the UK, but that 15% still ate up enough of the principal that people of modest means were paying into the system as to kill them financially at retirement. Now the choice is to work until they drop, live with relatives, or try to beg their way onto another dole to supplement an inadequate income.

This is exactly what Fuckwit seems to want for us.

[Nite Owl]

2. And they had the

benefit of a good stock market so this time it could be even worse here.

[bemildred]

3. Privatization is an inherently stupid idea, flat-earth economics.

Governments were instituted for a reason and they have a proper
role to play, and social insurance is one of those proper roles.
You cannot simultaneously seek to maximize private profit and the
public good.