Bush Soc. Sec. Plan to Allow Investment

[Newsjock]

http://www.guardian.co.uk/uslatest/story/0,1282,-4711173,00.html

By LEIGH STROPE
Associated Press Writer

WASHINGTON (AP) - The Bush administration is focusing on a Social Security proposal that would allow younger workers to invest up to 4 percent of their payroll taxes in private accounts, with contributions limited to about $1,000 to $1,300 a year, an official said Tuesday.

A final plan is expected to be unveiled in late February.

The official, who spoke on condition of anonymity, said the size of the private accounts could be similar to a proposal by Sen. Lindsey Graham, R-S.C., and a plan from President Bush's 2001 Social Security commission.

Both would let workers divert 4 percent of their payroll taxes into accounts, while the remaining 2.4 percent they pay would continue going into the current system. The federal 12.4 percent payroll tax is split between workers and employers.

more

THE AP IS USING FAULTY MATH. It's 4 percentage points. 4 points out 6.4 points of employee-paid tax is 62.5 PERCENT of the employee-paid tax being shifted to private accounts.

[girl gone mad]

1. When did it become 4 points?

I thought Bush was pushing for 2.

[Florida_Geek]

4. Also in the Lindsey plan

was the Government makes $$$$ off your investments plan.

Under that part of the Lindsey plan the "Govt" will decide how much profit you get to kept in the plan for your retirement.

Say they say a 20yo only needs 2% gain to have a retirement nest egg, and the stock market of your stocks does 10% in one year.... Bushie takes 8% for the "Govt".

[Vitruvius]

17. If you win big, Bushie takes the "excess"; if you lose, tough luck.

All upside for Bushie; all downside for us.

Another Bu$h swindle...

[muriel_volestrangler]

19. Have you a link for that?

Because publicising that would kill the idea of social security privatization stone dead.

[Florida_Geek]

31. here for one example

http://slate.msn.com/id/2096337/

he Free-Lunch Bunch
The Bush team's secret plan to "reform" Social Security.
By Ron Suskind
Posted Friday, Feb. 27, 2004, at 4:27 PM PT

..cut

Larry Lindsey, Bush's tutor on economics during the campaign and later chairman of the White House's National Economic Council, devised a scheme based on creative accounting principles. Essentially, it proposed that the government would issue substantial new debt to sustain old-style benefits. This debt would be serviced and paid down by confiscating revenues from the higher returns from those opting for new-style personal accounts.

[muriel_volestrangler]

36. I saw that before, but could never find where the confiscation

was mentioned in the memo or presentation (though with the presentation posted sideways, it's east to miss something in it). Is there anything more than Suskind's interpretation of what Lindsey was proposing?

[papau]

48. I don't believe that is in Plan - but media does ignore the items below

Per Michael Tanner, director of the Cato Institute's Project on Social Security Choice, the plan will allow younger workers to invest nearly $2 of every $3 from payroll taxes in private accounts, up to $1,000 to $1,300 annually, as it cuts traditional benefits for younger workers (Bush Commission cuts were 0.9% to 45.9%, but Bush has no numbers now) hoping but not guaranteeing great returns will cover the difference (they have not even shown how great those returns must be to break even!), and as $2 trillion over 10 years is found for "transition costs. Add in the move from wage growth adjustment to benefits to CPI adjustment and a worker retiring in 2075 will see a cut of 45.9% percent in benefits - With SS private accounts maybe paying a large fraction of the difference - all this to fix a system that is not broken.

IF THEY WANT VOLUNTARY ADD ON PRIVATE ACCOUNTS via the payroll tax system, why not - heck Clinton was promoting these 401k like options. But this carve out by Bush is just a cover for not paying back the Social Security Surplus that was stolen to finance the tax cut for the rich(meaning avoiding redeeming the SSTrust fund Bonds in 2018-2042 period)

Expenses are expected to increase by 30% of the amount set aside-but what the hey-you will have "choice" - of index funds

The problem of poor performing private accounts - the penniless private account problem - has hit the Brits - and they are increasing welfare - so dignified retirement becomes begging the Gov for handout.

Voluntary is limited - so as to prevent the gaming of the system the "voluntary" option being a one time choice - once you make it - and you must make a choice - you are locked in.

Indeed Bush lower disaster expense (transition) estimates are based on hoping few folks will actually go to private accounts - while he really hopes for 100% and has designed the system to make staying in a very bad choice economicaly for the worker. But if he assumes 100% take private accounts, he as a $2 to 4 trillion transition cost over 10 years to discuss.

So the media let's him lie - repeating the silly $800 billion low ball number that Rove puts out - not realizing that is the price only if very few actually take private accounts.

[The_Casual_Observer]

2. Not really faulty math, simply a different and misleading

way of stating the case. In any case $1000 a year doesn't add up to very much of a retirement, unless, of course, you really are hot at picking your stocks! - reminds me of the big FAFSA college grants -whopping $2000 sums that really put a dent in that tuition bill.

[Florida_Geek]

5. see the above post

you do not get to keep all the gains in your stocks.

[NewYorkerfromMass]

16. Gee, I wonder who does? nt

[hughee99]

43. If the extra $$ were to go into the general pot,

wouldn't this be a potential benefit to the plan? I wouldn't bet on that happening, though.

[lovuian]

3. This is a good way to Lose your retirement money

ask the people who worked for Enron!!!

[newscott]

15. Didn't you know?

The average American is as smart as any investment advisor the gov't might hire to oversee fixing Soc. Sec.

And now the wolves get their hands on our sacrosanct sheep.

[Cobalt Violet]

6. What's a "younger worker"?

[NMDemDist2]

9. that is my question. from everything i hear and read SS is good til

i should be dead (2052 i'll be 97)

i hope i am exempted

[dweller]

21. 40-50yr old?

50-60???

can't retire until what...78yr or something now?

dp

[Robbien]

22. Currently younger worker is anyone under the age of 55

So people in the forties and fifties have to start all over because they no longer get full credit for the twenty to thirty years they have been paying into the system.

[dweller]

28. "no longer get full credit" ????????

for the all the years already in??????????

how many ways can i say FUCK THAT SHIT without getting deleted here??????????????????


what a scam.
dp

[ZR2]

32. I would have to see proof of that

before I buy that line.

[Robbien]

34. No source will come out and say a person 54 years old will have

their governmental benefits cut. What every source says is that people 55 to 65 will retain full retirement benefits. Then the reports say the younger worker will be on this new system with reduced governmental payments. Younger worker is everyone younger than the guaranteed 55 to 65 group.

[Cobalt Violet]

39. So the 40-50 yr. olds will be getting screwed the most. n/t

[Robbien]

7. In private accounts directed by BushCo approved investment managers

with investment income capped on the upside but all downside losses to be eaten by the worker.

Social Security management currently costs 1% of money paid into it. Investment managers will be allowed much higher handling fees, of course taken out of the worker's money.

[Raster]

27. The UK had to go back and cap the comissions and fees at 20%

They had soared much higher. Benefits went down across the board and participants received less so the mangers could skim theirs off the top.

As it is, SS has a HUGE SURPLUS. The government has been borrowing money from the SS fund for years. They just don't want to pay it back. It's a trust, for the people of the United States, not a piggybank for greedy corporations and their political shills.

This is bush*'s payback to his money people.

[gratuitous]

8. And if some sharpie snookers you?

And you're left with less than enough to live on? Do we (that is, you and me, the taxpayers) bail that person out? Does the person suckered have to depend on the kindness of friends, strangers and relatives? Or starve in the street?

This is a real difficult concept for the overrich, for whom losing several thousand dollars is no big thing, but some people live check to check. Scam artists and swindlers operate on big scales (like Enron). When some fast talker impoverishes a thousand old folks or ten thousand old folks, what are we going to do?

The system works pretty well (though it could be better) in keeping that pile of money away from persons who don't have the account holder's best interest at heart. There's no sense changing it, unless you're one of those persons.

[Emboldened Chimp]

10. Does "allow" mean that this is voluntary program?

[Robbien]

11. No, not voluntary. If you don't elect to invest the money individually

your FICA rate stays the same but you only get credit for the 2.4%, you lose credit on the 4%.

[Emboldened Chimp]

13. So they just take 4% of what you put in?

They're forcing us to invest. Well, ain't that just democratic. Fuck Bush.

[jdj]

20. I am so confused.

I object to this on moral grounds.

The only time that I had access to a 401k I did not take advantage of it because it was mutual funds and I don't know enough about these companies to know what I am investing in.

I contacted a woman who does moral investments, and I was interested in environmentally benign or beneficial companies and companies that did not use animals in testing or research, and she said it was next to impossible to find companies that fit both criteria, so I said screw it. I can't control what my tax money goes to, I know it pays for napalm, but I can at least not volunteer my money into stuff like this, and now I am going to be forced to.

I find this very upsetting.

[Robbien]

24. Yes you only have a choice of

putting your money into the hands of BushCo appointed Investors or lose access to that money. I cannot see BushCo appointed Investors pushing "earth friendly" investment accounts.

[Name removed]

33. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Robbien]

35. You are being very nasty.

and very confrontational. Why?

Please provide proof of your nasty "bullshit" comment. Where in the proposed rules does it state the worker will have full control over where and with whom he invest the funds?

[ZR2]

45. That was not being confrontational

If you regard having a statement that "if you choose not to do the investment idea that you will only get credit for the 2.4% paid in, and lose credit on the other 4% that is paid in" being called bullshit, then I expect you to prove your point. Show me any shred of factual evidence that points to that and I will come on here and make the biggest apology you have ever seen. Hell, I'll even kiss your ass and give you 15 minutes to draw up a crowd. Now I'm talking FACTUAL evidence, not some ranting and raving or personal opinion on some blog site somewhere. Show me in the legislation exactly where this "you lose 4%" resides.

[Brundle_Fly]

12. if this was so brilliant.

why doesnt every one have stocks right now?

I think this will flood the market with astronomical amounts of capital, making the market go up, like the dot com boom. The problem is this is so short term that within a few years there will be another crash as nutball investing will lead to higher investment to income corporations.

It's so flawed its quite funny. It's like another way to tax you, and pretend its in your interest. We'd never dig out of this hole.

edit spelling

[liberal N proud]

14. And what percentage of that will go to fees at the financial instituions

where these young people are investing their money?
And who will be collecting the profit from those fees?

[Florida_Geek]

18. Ah the fine print that Bushie

has not put out. But it sounds BIG.

[Cobalt Violet]

41. 20% under privatization compared to 1% now.

Right now 99% of what we pay goes out in benefits. Under privatization only 80% will.:-( :mad:

[TahitiNut]

42. OASDI Adminstrative expenses have been below 1% for 14 years

That's as a percentage of actual Benefit Payments, not revenues. (It'd be even lower as a percentage of revenues.)

[LynnTheDem]

23. Rightwing FOOLS. In 2001, EVEN BUSH decided his SS plan was stupid.

2001:

Commission Impossible:
Why Bush is abandoning Social Security reform

So when Bush became the latest Republican to back away from the commission, its critics were ecstatic. For months they had warned that conservative-style reform would require either unpopular tax increases or equally unpopular cuts in benefits.

Now it looked like the White House had come to the same conclusion. "They're essentially coming up with a way for not to be tied to what they produce, so that he can't be attacked," crowed Hans Riemer, an analyst with Campaign for America's Future (CAF). "They clearly miscalculated the politics of it," says the DNC's Kavanaugh. "I think they're rethinking the entire proposition."

http://www.prospect.org/print-friendly/print/V12/22/confessore-n.html

2002

Social Security In The 2002 Elections:
Candidates Won By Renouncing Privatization

The conservative crusade to "privatize" Social Security played an important role in the 2002 election -- but not in the way that most supporters of this radical idea might have hoped. After more than a decade of aggressive marketing by right-wing interest groups, this was the first national election in which the privatizers might have gotten their dream scenario: a political debate over specific plans put forward by a sitting President -- and embraced by many in the House and Senate -- for diverting Social Security taxes and cutting benefits in order to fund private stock market accounts.

The debate, however, turned into a rout. The privatizers, when challenged, changed their colors and fled the field. Conservative politicians with long and specific records of support for Social Security privatization suddenly decided to denounce the whole idea in their re-election campaigns. A special Republican Campaign Committee task force instructed candidates there was no way to win votes with the Bush Social Security plan.

http://www.tompaine.com/feature.cfm/ID/6717

But bush no longer has to care about the voters, and he wants to send a "bushel of money" to Wall Street.

WAKE UP, AMERICA.

[Just Me]

25. Why do they want to FORCE the environment for another depression?

Gee. :eyes: Does it have something to do with how their family profitted off such misery?

I am telling you,...these people a freakin' EVIL!!!

[Robbien]

26. Only the Elite exists in the BushCo world

the rest of us is just white noise.

[I_Make_Mistakes]

29. Fight the Gophers, Oh, my bad

We have got to beat them at their own game. How do we do that?

This is the hardest part, after working on Wall Street,(low level, computer job,(Job, now in India)), do we do this?

There are more of them then us, (Demon, worshiping, Re pukes). We have got to start, with investment rep's, who actually care about their investors. How do we do this? I don't have answers, but I bet, there are those, who have integrity.

If they are going to pass this, they have control of the House and Senate, then let's kick their butts, by identifying our own people to earn the investment fees.

Anyone with ideas?

Corzine might have some insight. Are there other Dem's with WS connections?

[Just Me]

30. Wall Street WAS the seed associated with the depression.

I really do NOT want to turn to WS to solve this problem.

Do you?

[chomskysright]

37. 10 reasons why Bush's plan sucks....

TEN REASONS WHY PRESIDENT BUSH'S PLAN FOR SOCIAL SECURITY IS A BAD IDEA

1. WHO WANTS THE CHANGE? Wall Street wants privatization in order reap a windfall profit. Everyone else should be very suspicious. If the stock market goes down, your benefits go down.

2. WHY DOES WALL STREET WANT THE CHANGE? In the background, beyond private accounts, are various proposals to cut guaranteed Social Security
benefits in the future.

3. BUT WE WILL NEVER HAVE ANOTHER DEPRESSION AS IN 1929: wrong: In 1973-74, the stock
market lost 48 percent of its value. The stock market is a very dangerous place to put money

4. WHO DOES NOT WANT THE CHANGE? AARP, the nation's largest seniors organization, is coming out
strongly against President Bush's plan to allow private individual accounts
within Social Security.

5. HOW MUCH WOULD IT COST TO PRIVATIZE SOCIAL SECURITY? transitioning to private accounts could cost $2 trillion.

6. WHERE WOULD THAT MONEY COME FROM? our taxes will have to be increased to make Bush's proposed plan work.

7. HOW EFFICIENT IS THE SOCIAL SECURITY SYSTEM NOW? More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead.

8. OTHER COUNTIES MUST HAVE SOCIAL SECURITY AND MAYBE THOSE ARE BETTER? wrong: Chile's system, management fees are around 20 times as high. A privatized system will take money from your Social Security check.

9. SHOULD YOU BE WORRIED THAT YOU WILL NOT HAVE SOCIAL SECURITY? Nothing is going to change, in terms of benefits, for people near your retirement age.

10. WHO TAXED SOCIAL SECURITY TO BEGIN WITH? Ronald Reagan, a Republican, began the taxation on Social Security in 1983.

There is no Social Security crisis, just as there were no weapons of mass destruction. Social Security has provided a lifeline to millions of Americans with
millions of checks, and in more than 60 years has never missed a payment—and this track record can continue. Social Security is basically a sound system
that can meet 100 percent of its obligations for the next 39 years, and with responsible changes it can continue to do so indefinitely

[sidpleasant]

46. "If the stock market goes down, your benefits go down" - Exactly!

That point is the key to beating this monstrous, idiotic proposal. Dems need to hammer the meme that Bush's plan means RISK. Americans will trade a guaranteed, safe, fixed benefit for a big load of RISK. Dems should also start using the words "gamble" and "bet" when referring to Bush's investment account schemes. Americans might end up with a little more money at retirement but they're just as likely to end up with less. People don't like risk; academic studies have proven that people prefer to keep something they have (such as low salary) rather than take a bet that has an equal probability of giving them more or less money.

[KDLarsen]

47. Since Wall Street stands to gain a lot from this economic stunt..

.. could this be a kickback from *? Remember how Wall Street went out and told how bad John Kerry would be for the economy etc?

[dweller]

38. ever heard of

http://www.karmabanque.com/


dp

[I_Make_Mistakes]

40. Truth is truth

I worked there, for only 9 months, long enough to see the TRUTH.

Enron, Worldcom, etc, it's only the beginning, middle or end?

Most companies, present amazing, p/l, income statements. yadda, yadda.

Here's some true stories. I was responsible for the yearly inventory at a US manufacturing company, owned by a foreign company.

I was asked to do the annual inventory counting/accounting, I had no experience. My boss told me not to worry, someone else, a qualified person had done the prelim.

Well, day one, with no knowledge of the processing, 26 out of 36 programs didn't work. There were 600 hundred people, sitting on their hands, waiting for me, never saw the crap in my life, trying to fix the p. (By the way, this same person is now a crazy Methodist right wing fundamentalist preacher, who spent his days as my supervisor, talking about the strip joints| Yes, RW nut bags are the most frustrating people you will ever know)

Sorry, I digressed.. I was told not to worry about inventory. When I asked my supervisor, what to expect, he said, don't worry. He said the auditors, told him the numbers they wanted to see, and he gave them those numbers. I told him, that I would not falsify numbers, and then guess what happened.

I was not fired.. The company employed two semi-trailers to hold the parts that were not to be a part of the inventory. They were at the end of the parking lot. Siemens never figured out the American sociopath's, had out smarted them.

[pfitz59]

44. Who was George Herbert Walker.....

and why should you care?

[DebJ]

49. This 4% is a scam, so they can negotiate down to 2%, which is

all it will take to Starve the Beast.

WHEN DEMS ROLL OVER AND PLAY DEAD FOR THE 2%, I'M NOT GOING TO BUY THEIR CRAP. THIS IS ALL A PLOY.

NO RETREAT, NO SURRENDER, NO PRIVATIZATION.