Social Security
5 April 2005, late afternoon
As you may or may not know, the current president is no fan of Social Security. Bush-Co want to replace it with some sort “invest your own moneys in the stock market” scheme. Bush wants to dump pension payments directly in to the stock market. It’ll be beautiful he tells the American people. The stock market is where people go to get rich. Everyone will be rich. Frankly, it all sounds foolish to me. Of course, I’m probably over simplyfying his actual plan.
The feature article in Harper’s this month discusses this very issue:
The one sure mark of a con, though, is the promise of free money. In fact, the only way the stock market is going to grow is if we the people put a lot more of our money into it. What Bush seeks to manufacture is a boom—or, more accurately, a bubble—bankrolled by the last safe pile of cash in America today. His plan is a Ponzi scheme, and in that scheme it is Social Security that is being played for the last sucker.
And, you don’t even need to subscribe to the magazine to enjoy the article: The $4.7 Trillion Pyramid
The main goal of any scheme like Social security is collective risk-sharing.
But if some enterprising youngster realizes that he can handle his future today instead of waiting around years after retirement for his benefits to kick in, what’s wrong?
The reality is people are living much longer after retirement and drawing lot more benefits. Population is shrinking. So eventually the monies at some stage will run out. To say that the problem doesn’t exist is pure bullshit. Retirement ages will keep on increasing if the present system continues and hence people have to work longer to get benefits.
So if somebody who has a handle of the stock market / funds, who knows wtf he is doing, understands the added risk, wants to invest some of that, what can be possibly wrong?
But does Bush take it little too far? Yes, but that’s better than being in denial.
Now what I personally feel: shrink benefits. Its a system that promises too much and is often hardpressed to deliver. And scrap personal accounts because it makes a program that is already too big, even bigger.
by Sunny on April 5 2005, 9:55 pm #
You should read The Corporation: The Pathological Pursuit of Profit and Power.
by Ryan on April 6 2005, 1:25 am #
I’m first in line to make fun of Bush.
But, lets not get ahead of ourselves on this one. As Canadians we know what RRSP’s are, this is almost exactly the same. And we’re not crazy lunatics with our money over here.
by Victor on April 6 2005, 1:01 pm #
Victor and Sunny, good points. My interest in the article was more in how it describes the way corporations use pension funds more as a source of revenue than as a trust fund for their workers future.
by ramanan on April 6 2005, 2:50 pm #