Sunday a.m discussion of Soc Security "reform" (interesting)

[wellstone_democrat]

At a semi-regular Sunday coffee hour with some friends, one brought up the whole SS "reform" issue and he and another of the six there were *excited*----Non Bush voters too!

Why? Because it turns out that the two of them were convinced that the following was going to happen:
1. the government will issue all of us a check (or authorize a transfer of funds directly to a broker) in the amount of what we have paid into SS over our working life. In his case, the last little form he got in Jan of 2004 was for over 50,000.00.

2. Then, they believe, that they can invest that money just like they were Bill Gates playing "buy and sell" with their individual broker plus, investing whatever they get from this point on from their paychecks that would have gone to SS.

My understanding is that what you paid in already is GONE and you start from zero. Thus, the big push in the court of public opinion toward the youngest workers---not because they believe so hard in the stock market but rather because they also have 30-50 years before retirement is looming.


How that is invested seems to be a mystery no one is talking about but I have never gotten any factual info that indicates that we all are going to get that paid in money back to dabble in the stock market willy nilly.

Have I missed something over the last couple of years? WILL we all be getting "refunds" of paid-in Soc Sec over our working lives to "invest" as we like??????

BTW, my late father would have said "real estate" not stocks---

[Wright Patman]

1. My understanding

is that you are correct and your two friends have been smoking crack along with drinking coffee.

[elehhhhna]

4. yep they're insane.

this is really about securing the retirement of brokers & fund managers everywhere. The opportunities for fees and churning are limitless. It would flood the markets with tax dollars so more Enron style overvaluation could resume. It's one of the WORST ideas they've pushed, yet. Karl Rove told Tim this a.m. that it must be done "for the children".

Time for means testing.

[nothingshocksmeanymore]

2. They are wrong

As I understood the first plan that got floated a few years back, boomers would remain status quo only begin investing in private accounts but receive SS at a greatly reduced value. People under 30 invest in the new program and don't invest in the current one...do the math..that means boomers get screwed.

There was a plan at CATO (haven't reviewed it in a few years) and that is the one Bush was pushing.

[Dirty Hippie]

3. You will not be able to withdraw your funds

if you believe the market is about to tank. Reminds me of ENRON.

[JPJones]

5. They've offered no details, only platitudes

Chuck Hagel left a stain in one of CBS's chairs when Bob Schieffer asked how they were going to pay the $1 trillion dollar cost of private accounts for young workers.

Current retirees will stay the same, except that COLA etc. will be cut (they haven't said this, but how can they avoid it if they divert 2% of payroll taxes to Wall Street?).

Anyone who thinks the Republicans ever offer anything but a shell game needs to have their head examined.

[wellstone_democrat]

6. BTW, this prompted me to call a friend and ask...

someone who is liberal and pays attention to things and who also worked in a brokerage firm in the 1980s....He said that he argues constantly with people about this: "the biggest *assumption* is that we are somehow going to get the money paid in already to invest along with whatever percentage of future earnings are designated for that privitized retirement funds"

He calls it the "secret that will break any public interest in the plan" and suggest that the failure to address that is deliberate and will be hedged until the last moment. He also suggested "maybe that will finally make people take to the streets."

But, yes, he agrees that most people ASSUME their paid-in Soc Sec money over the years is...."coming home to them"

[brainshrub]

7. The real reason this is a big issue with the Cons:

Two reasons:

1) This will be the biggest hand-out to corporate America ever. This is going to make the brokers, CEOs and big-investors so much money that they are walking around Wall Street with erections.

2) After this "reform" happens, the average voters retirement savings will be vested in how well large corporations do. Therefore, they will be loath to support any legislation that might hurt the bottom line of big business.
Say goodbye to what little environmental, worker or workplace regulations are left.

What "ownership society" really means is that corporations will own the us lock, stock and barrel.

[amazona]

8. no one is proposing refunds

This is the most ridiculous idea I ever heard. I don't want to say your friends are on drugs but I'd be checking their medicine cabinet.

No, we are not getting refunds. That is just silly. No one has ever proposed this. It would bankrupt the country.

If Social Security is privatized, you will only be able to invest in a narrow range of investment vehicles, just as you do with IRAs and KEOGHs. Day-trading won't be allowed. It is fairly unlikely that you'll even be able to buy real estate with your fund, although maybe they'll allow REITs. From the sound of it, what they're proposing at the moment is that the private part of Social Security be in mutual funds, perhaps only indexed mutual funds to minimize the chances of an individual stock buyer buying Enrom, WorldCom, or an airline stock and ending up on the public welfare after they go bankrupt.

Your friends are just flat out in fantasy-land. Well, we all get taken by rumors at one time or another, I remember when I believed that Proctor and Gamble was owned by Satanists.

[wellstone_democrat]

10. No, I'm talking about the *assumptions" built into this

each of the four NOT advocating privitization had a number of reasons but all agreed that the language used all along has been of the "you should invest YOUR money!" Amd that this was DELIBERATE on the part of the admin to allow the majority of people to ASSUME that this would be the case

The two who did push this (husband and wife!) were, oddly enough, attorneys whom one would expect to know better but, even they could not recall anyone claiming refunds would be forthcoming but, assumed it because "at 45, how could we save enough or invest enough?"

(that was when the rest of us laughed)

Still, I thought it worth throwing out to see if anyone else noticed this phenomenon---everyone else in the party (Texans all!) knew people who were SURE this would be the case.

[sam sarrha]

9. this is only subdize the stockmarket.. have any of the get rich and retire

early programs ever worked the government has advocated..

first there was Regan IRA, tax free.. retire at 50 with Million dollars. but that got changed real quick right after people bought ito it

then there was the 401K... and the corporations funded it with their own stock.. my brother lost $600,000.. on that one

then there was the mutual funds... my brother lost $300,000 on that one.

now they have tried to meke gambling addicts on the new stock option retirement fund, but the broakers will eat up all the profits as soon as they get ahold of the money

and there was the realestate investment in savings and loans..

wise up

[daa]

11. If you read Paul O'Neils's book

you will find that chimpy's staff has no idea what he means by "privitization of social security."