|
from "reform" that had not been apparent until tonight.
The lies deal with (2) slow motion theft in the form of incomplete compensation for inflation, (1) failure to mention plans to bar retirement at age 62, and (3) underestimation of Wall Street's privatization "take" in the form of "management fees".
The new "winners" are (4) insurance companies and (5) the wealthiest people paying FICA taxes. Most people, regardless of age, are GUARANTEED TO GET LESS THAN THEY ARE GUARANTEED TO GET NOW!
--------------------------------------------------------------------------------
"there will be no changes in the current system for people who were born before 1950 -- these are people who are 55 and older now.... For individuals who were born in 1950 or later, they would have the opportunity -- the voluntary opportunity -- to participate in personal accounts. If they wished, they could not choose a personal account and they could stay entirely within the current system."
THESE ARE LIES.
(1) "No cut in STARTING benefits" for those 55 and older MIGHT be accurate, but Repubs have talked about ending the early retirement option of getting reduced benefits at age 62. Since it's irrational for the vast majority of people not to start Social Security at age 62, and since many people do not live to their "normal retirement age" of 67 or higher, this would be a HUGE change.
(2) Republicans also have proposed changing the way in which annual increases in monthly benefits are calculated to compensate for inflation. This would provide an incentive for inflating the dollar that would become irresistible as the bills for Dubya's spending spree and income tax largesse to the very rich come due.
Within ten or twenty years, even those now 55 would suffer substantial loss of spending power, compared to what they are guaranteed now under current law. Those younger than 55 woudl suffer a double cut, including a lower starting benefit as well as incomplete compensation for accelerated inflation.
--------------------------------------------------------------------------------
(3) WALL STREET'S TAKE is UNDERESTIMATED in a very misleading way.
"we have an estimate from the Social Security actuary of 30 basis points for the administrative costs -- that equates to 0.3 percent of account balances in a particular year....
Q Do you have a sense of how much money would be going into the stock market?
Q -- they would then be doing that at less than a 30-basis point return? They would have to be presumably bidding in at a 15-, 20-basis point return?
SENIOR ADMINISTRATION OFFICIAL: Much, much less than that. Much less."
But Prof Peter Diamond of MIT, the world's foremost authority on the economics of Social Security privatization, estimates Wall Street's eventual take at 20 percent of the flow of FICA taxes into the system.
--------------------------------------------------------------------------------
(4) INSURANCE COMPANIES COME OUT BIG WINNERS
"Q So, ... people will have annuitize, literally buy an annuity somewhere?
SENIOR ADMINISTRATION OFFICIAL: Right. We think it's very important that people not be in a position where their personal account money is withdrawn and it have the effect of pushing people into poverty.
SENIOR ADMINISTRATION OFFICIAL: Well, basically, the way that we have outlined it, the federal government would do the purchasing of the annuity contracts, so it would still be sort of -- this would still be channeled through the federal government, the purchase of the annuity. People wouldn't be out there shopping on their own for a private sector annuity.
Q But if you bought it from an insurance company then, the insurance company would take the risk, but they would also get the account if somebody died early -- right? I mean, that's how it works?
SENIOR ADMINISTRATION OFFICIAL: Yes, exactly."
--------------------------------------------------------------------------------
(5) ONLY THE WEALTHIEST would have any prospect of "owning" their "privatized" accounts and passing them on to heirs. Everyone else would give up guaranteed benefits, take on stock market risk, presumably receive lower benefits than they are guaranteed now, and pass on their account TO AN INSURANCE COMPANY:
"they would not be able to withdraw money from their account to such a degree that by doing so they would move themselves below the poverty line. In other words, there would have to be a sufficient amount coming to them, in terms of a monthly inflation index benefit stream, from the traditional system and the annuitized portion of their personal account to be able to fund a poverty-level benefit. Now, to the extent that their personal account enables them to have total benefits that are higher than that, they would have flexibility over the disposition of those funds."
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
