How can the GOP plan for privatizing/dropping Social Security possibly work?
October 30, 2011 by Social Marketing Superstar
Filed under social marketing plan
“Mr. Pence has been an ardent supporter of Social Security privatization for years. In 2005, he co-wrote a letter to President Bush with Congressman John Shadegg urging private accounts: “We urge you to continue to pursue personal carve- out accounts as the long run solution for Social Security’s actuarial shortcomings.” [Letter from Mike Pence and John Shadegg to President George W. Bush, 4/15/05]”
“Rep. Eric Cantor of Virginia, the second-ranking Republican in the House, said in an interview this week that he supported a proposal to create private investment accounts within Social Security…”
“Mr. Boehner has repeatedly refused to take Social Security privatization off the table and has described the GOP’s alternative budget proposal – which will privatize Social Security and end Medicare as we know it – as “a pretty good list of options” when it comes to dealing with the deficit.”
Sharron Angle, Republican from Nevada Senate race, stated that Social Security should be “transitioned out” in favor of “free market alternatives.
http://online.wsj.com/article/SB10001424052748703431604575468074166599754.html?KEYWORDS=cantor
http://www.cbo.gov/ftpdocs/108xx/doc10851/01-27-Ryan-Roadmap-Letter.pdf
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020100981_2.html?hpid=topnews&sid=ST2010020100056
http://www.speaker.gov/blog/?p=2891
http://www.americablog.com/2010/06/harry-reids-opponent-sharron-angle.html
http://www.progressohio.org/blog/2010/10/the-real-gop-agenda-privatize-social-security-and-hand-it-over-to-wall-street.html
It isn’t supposed to “work”.
Social Security works- that is their problem.
they will put wall street in charge, who will mess up, and everything bailed out by the government
all Ponzi schemes must end someday.
I don’t understand this uproar. The market has been a solid investment for many, many years. It will never fail and we will never see another 1929, especially after Obama put all these new regulations on Wall Street.
I really hope you are not depending on SS for all of your retirement funds. It will barely pay your utilities.
Social Security isn’t working. Alternatives need to be explored. There are a whole bunch of us here on this board vested in SS who may never see a dime. Will you Democrats wake up and smell the coffee about that?
Here’s an NPR source that says SS is funded through 2037. I’ll be 70.
So you use 3 blogs, which arent sources and 2 liberal news papers as “sources” Riiiiight
It’s really a simple concept but requires that earners take responsibility for their own future and not rely on the government to be the banker for them. I’m all for it but, realistically, I’m dubious about the possibility of some earners being responsible enough to plan ahead. Especially the youth who tend to live for the moment…we all did that right?
It may be too late for our country to move in this direction as our government has been breeding dependence for so many generations.
It cannot, clearly.
Social Security is just another way to collect money so the government can spend it.
The Washington Times reported that the federal government has already spent the social security money and has issued IOU’s back to the SSA.
The government will have to borrow even more money, much of it abroad, to start paying back the IOUs. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion-dollar deficits for years to come.
For more than two decades, regardless of which political party was in power, Congress has been accused of raiding the Social Security trust funds to pay for other programs, masking the size of the budget deficit.
Social Security should be done away with and people should be held accountable for their own retirement savings. I have saved and saved for years and years now I will have the retirement I want without having to rely on the government for a check.
Again, another program invented to buy votes from Americans, in this case its the seniors.
If you ignore the liberal spin and apply some basic financial principles to the issue – you would see that you would be much better off if you simply place the money you pay in SS taxes into a ‘widows and orphans’ stock (stocks that return less but are very stable and safe) than you will ever get back from Social Security.
Just do the math and see what numbers you get:
Assume a person makes an average of $50,000/yr over a working life of 40 years.
Assume that that person invests 6.2% of his income instead of paying into Social Security.
Assume that the employer’s share of this contribution is also invested into this account.
Assume that the money is placed into a ‘widows and orphans’ investment that returns and average of 4% per year
Using the Future Value function from Excel – at age 60 this person would have $589,158 in his retirement account. Assuming that this person will live another 30 years: this will produce a retirement income of $33,897/yr.
Now compare this to the $25,044/yr that you will get if the money goes to Social Security instead.
If left alone SS will become insolvent. Have you seen any insolvent annuities? do you know what one is? The real facts are the private sector does it better. Since it has the Obama administration is calling for nationalization of pension fund to fund insolvent union pensions. The unions have better pension promises than anybody. Union workers pay more into their pension funds than most people do. Could there be something wrong with their pension funds or would it just be mismanagement? Now they want their best friend to rob everyone else’s retirement and pay for their mismanagement. Notice there is no move to get funds for them from SS. There are not enough funds available for that. They have to rob your 401k and your pension plan that you paid into. That is not how the Republican plan works. I used to sell annuities and had a pension from a former employer. At one point I had planned to sell myself an annuity with the money from my pension plan. While investigating this I learned it would pay double what annuity would pay me so I left it where it was. Social Security dosen’t pay as well as the annuity. Annuities are additional and optional. Social Security is mandatory. If you could place your SS tax into an annutiy you would have a better retirement fund. Have you heard of any annuities becoming insolvent and if they did what would happen. I bet not.