Social Security wins (cuurent version!) - from Christian Science Monitor

[papau]

http://www.csmonitor.com/2004/1227/p01s03-cogn.html
Social Security wins

By David R. Francis | Staff writer of The Christian Science Monitor
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Interesting Article above - I wonder if MSM will run with it. I doubt that they will.

Of course if Equity investment is needed to improve our government payroll tax based retirement system, the Trust fund can buy equities. The fake "return" on your investment calculation that ignores the annual interest payout required for the $2 Trillion borrowing that sets up the private accounts is all that the advocates of privatization have left to point to as a "positive" - and it is a positive only if you allow them to lie and pretend the taxpayers will not be paying extra taxes to fund the extra interest payment required each year on the $2 trillion "transition cost" borrowing.

But it is interesting to see that under this worker's analysis, where he takes his annual payroll tax and compares its growth via theoretical stock returns with what the Social Security Trust Fund earned, the numbers show that from 1950 to current investing in equities was not a guarantee of a great return.

But Bush/GOP/media liars always return to "what will you get from the system" - and always pretend SS stands alone and is not part of the total Federal government expense and taxation system. Indeed the payroll tax is one of our 2 income taxes - only it is the one that Bush never wants to cut despite it being in "surplus" now and for next 15 years.

But just wait for the Media to sell the Bush investment account approach because "a typical worker can expect to earn 4.6 percent a year (after administrative costs) on a diversified portfolio of stocks and bonds and only about 2 percent or less from Social Security, according to federal estimates reported by Michael Tanner of the Cato Institute" - what BULL! - as if there is a free lunch and the interest on the transition cost is never paid via taxes on those same workers!

Of course the "return" on their Social Security contributions depends largely on how long they live - and out living your private account means you starve to death at say age 80 - but that is not important to Bush.

As the article notes - the Thatcher revolution (moving average retirement income from being received 60% via a gov program like Soc Sec to only 40% today, while pushing private accounts to make up the difference), has "so many retirees are doing so poorly at this moment that a commission warned this fall that widespread poverty among the elderly may be returning, which could require massive new government spending."

Meanwhile we trade the present Social Security system's minuscule expense compared with the size of the benefits provided, for the major expenses associated with private accounts.

God forbid we look at the administrative problems/expenses - not included by CATO - of payroll deduction and timely investment of those monies as (per study by the Congressional Research Service- CRS) 650,000 employers go out of business or start new businesses each year and more than 4 million employers have 10 or fewer employees, meaning they often having record-keeping problems and errors, and as our 12 million to 15 million individuals who are self-employed are told to send money directly to a private account. It is good that the Monitor noted these problems - but I doubt network/cable TV/radio will ever do more than treat this as she says/he says.