You don't have to be a financial wizard to know that Social Security is a lousy investment. Unlike the money you deposit in a bank or salt away in an IRA, you don't own the money you pay into Social Security. You have no legal right to get those dollars back, and when you die you can't pass them on to your heirs. Nor can you use your Social Security account before you retire -- you can't borrow against it and you can't cash it in. You aren't allowed to put the money into a balanced portfolio. You can't even watch as the interest accumulates, since your Social Security nest egg doesn't earn any interest.Add FDR to the list of politicians who'd be Republicans today.
Your nest egg, in fact, doesn't even exist. Because Social Security is financed on a pay-as-you-go system, the dollars withheld from your paycheck today are immediately paid out to retirees. The benefits you receive when you retire will be funded by the payroll taxes then being collected. But because the ratio of workers to retirees is steadily shrinking, Social Security is headed for a crisis.
Within 15 years, the system will be paying out more in benefits than it collects in taxes. Its shortfalls will grow larger and larger. Bankruptcy will loom. To save Social Security, Congress will have no choice but to sharply raise payroll taxes, go even more deeply into debt, or slash the benefits paid to retirees. . .
To many Democrats, such talk is heresy. Letting Americans own some of their Social Security would be too risky, they argue -- another way of saying that Americans are too dumb to be entrusted with their own money. Much better to continue entrusting it all to Washington, which has managed Social Security so skillfully that workers younger than 50 will never get back in benefits what they are paying into the system now. . .
No wonder Social Security is so unpopular among the young. It provides no security for their retirement, while impoverishing them in the present. In exchange for an eighth of their earnings today, it guarantees nothing but higher taxes tomorrow. That there are politicians who defend this arrangement wouldn't have surprised FDR. But how shocked he would be that they call themselves Democrats.
(via Right Wing News)
More:
Progress for America is running an ad supporting Social Security reform. PFA is the group behind the memorable "Ashley's Story" spot last year.
(via Of the Mind)
1 comment:
I disagree on Social Security. It is an important program to keep going. He has saved numerous elderly from poverty. Before social security people achieved their social security for old age by having many children. Now our population growth is zero, with adults having less than 2 children.
One's own investments will be better than social security it is asserted.
THere are two problems with this argument. First securities investments are very uncertain. If the stock market is up when wants to cash in fine. BUt if it is down one could have lost half ones investment. THe most extreme case is Enrons employee retirement account. Some of those people may only have social security to fall back on since their private investment went to zero.
The other part of the problem is that some portion and I suspect a substantial part of the population does not save for retirement and would not if given a break on social security taxation.
If GW and company really wanted to help people achieve better retirement and save social security they would do some planning as has been done in the past when the question of social security solvency has been on front burner.
But GW and company really only want to gut social security and benefit the banking and investment community.
Of course you might say, the investment and banking community is about the only industrial group we have left in the USA. EVERY other has left, with just the corporate offices remaining. But feathering their nest will not assure people of a decent retirement. A strong economy will do more than that will.
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