What if Bush and the Republicans had privatized your Social Security account?

[NNN0LHI]

http://latimesblogs.latimes.com/presidentbush/2008/10/social-security.html

The stock market and President Bush's Social Security privatization? On second thought ...

02:18 PM PT, Oct 13 2008

Here's a thought:

What if President Bush had privatized your Social Security account?

When Bush built his second-term domestic policy around privatizing Social Security, the stock market was on the verge of taking off. In 2006 it went up 16 points; by late 2007 another six, as measured by the Dow Jones Industrial Average. snip

But let's say you started your privatized Social Security retirement portfolio back in 2005 when Bush was talking about it. You would still be down roughly 12%. If you started work at the end of 2007 (when the market had really been soaring), 29% of the retirement kitty you invested at that moment would have disappeared.

[Xenotime]

1. There would be suffering while * would be living fat and happy.

[kentuck]

2. There would be nothing left.

It would have only made the bailout larger.

[Ashaman]

3. I'd rather invest my money than having politicians do it for me

What if you keep your cash under a pillow for the last 10 years? Would you still have more money today than if you have invested your cash 10 years ago? So you're saying don't invest your money because the market may crash? Very sound investment eh?

One thing I do know though and that is if you look toward the future, my 401k will far outpace my SS income. In fact, there's no guarantee that my SS money will still be there when I retire! Maybe you should do a study of money put into SS the next 10 years and see how much you make compare to the same money put into the stock market. Remember that 10 years later and go eat your words

[NNN0LHI]

6. What happens if your investments all turn to shit?

Who takes care of you then? Someone will have to bail you out in that event won't they?

Like what happens if you become disabled when you are in your 30's and you haven't had enough time to "invest" enough to keep a roof over you and your families heads and keep you all fed? You gambled and you lost so someone else pays for you because you didn't like the system in place?

Is that the way you think the this should be set up? Where you get to opt out and go your own way in the hopes of hitting it big and if your way doesn't quite work out, well then we have to support you when you can't work any more because of old age or disability after you rolled the dice?

That doesn't seem fair does it?

Or are you the type that could never become disabled and you will be young forever? Not like everyone else?

Don

[kentuck]

8. If you retired in 2000. not so bad...

If you retired in 2008, you get screwed. Is that the gamble people want to take. If you're lucky, you can retire on a high. If you're not so lucky, you may be broke? Sounds like a crap shoot to me?

[Ashaman]

13. Bad strategy

Well, if you retire in 2008 and all your investments are crap, then you haven't done a good job at balancing your portfolio. People should know that when they get older near retirement age, they should have rebalanced their portfolio to more stable investment. Treasury notes, bonds, income generating investment instead of those in the growth area, then your losses aren't great. There will always be down years in investment, but there will also be recovery periods. Plus, you don't take all your cash out of retirement when you reach 65. I don't even think you can take all your money out at one time either since it's not allowed. Balance your portfolio, manage your risks.

[Ashaman]

12. SS is not the answer

I'm glad you asked.

How is it that I gambled and lost when I'm 30 years old? I'm not allowed to touch my 401k until I'm 65 remember? We were discussing the pros and cons of 401k vs SS. But here you are talking about a totally separate issue.
Ok, so I'm disabled in my 30's as you suggested. Would SS take care of me? No. SS is based on the amount of time you worked on a job. So I won't get much out of SS anyway.
The responsible thing to do is to get yourself covered while working. Ever heard of life insurance, disability insurance, and charity?
Sir, I do hope that you have 401k and IRA as part of your retirement plan because if you only depend on SS alone, your retirement outlook is very grim.

[kentuck]

19. 401k's are a poor investment.

A retirement fund would be better.

[SharonAnn]

7. I'd rather have predictable income, with COLA adjustments than giving to Wall Street thieves.

My 401-K now, After saving in it for 25 years, now is less (in constant dollars) than what I put in.

So, that hasn't worked out so well over the long term.

And yes, it was very diversified in many different types of holdings, including some bonds. I was really careful with that.

Of course, now that I'm nearly 65, I don't have much time left for it to "appreciate".

Thank God for Social Security, it's the only thing that I can count on when I retire. Even my pension might be cut if the company "restructures" or goes bankrupt and it's turn d over to the Pension Benefit Guarantee Fund (a government operation).

So, 45 years of working, for a company with a pension benefit, saving in 401-Ks and IRAs, and paying into Social Security.

Looks like, so far, Social Security is by far the best investment that was made.

[TayTay]

21. I would much rather have a functioning Social Security program

and the ability to have a 401K or other retirement program. There is no reason for SSI to be privatized. There should be a guaranteed retirement program that is NOT subject to the whims of the market.

[customerserviceguy]

4. What if I had a private account

and had simply chosen a money market fund instead of the stock market? The principal would still be there.

Bush's idea was to chop a couple of percent off of the amounts that employers and employees currently put into SS, and invest that, draining those funds away from the current Social Security recipients. What if the plan had been to leave Social Security alone, and require employers and employees to each contribute one or two percent of pay to a retirement fund that the employee "owned" that could not be touched until retirement age, and that could not be invested in the risky stock market until there was an amount over $100K (or some such figure)?

That's no worse than what people with employer-matched 401K's have had, and if they were silly enough to plop it all down on the casino table of the market, they have about half today. I stuck mine in Treasuries and a money market fund.

Now, I've lost that job, and am only working part-time, but when I can either get the last of my credit cards paid off, or if my job goes full-time, I will do the same thing. Some folks might have needed a bit of a push in that direction to do what I did.

[CoffeeCat]

5. I'm sorry, but it's tin-foil hat time...

When I think of how hard Bush lobbied for privatizing Social Security--it boggles the mind. Remember, he
set out on that tour of the US--marketing the notion that privatizing gave people "choices" and "freedom".

What a rotten bastard.

I look at what the neocons have done to our economy, and what they tried to do. It's such an implosion that
it's nearly impossible to believe that it all happened by accident.

These cons relaxed banking regulations. They relaxed mortgage-lending regulations. They relaxed credit-card
regulations. They made it so easy for financial institutions to be enriched. More importantly, they made it
so easy for Americans to be completely fleeced--and left destitute.

Then--after they had this scheme going---they passed bankruptcy laws, which make it impossible for Americans
to find relief from the messes that they would find themselves in.

And in the process, they tried to privatize Social Security--when they knew damn well we were all living inside
a massive, unsustainable bubble.

Are we really supposed to believe that this---all of this--was some kind of "Ooops sorry...we goofed" debacle??

Only complete idiots could have created such a disaster, and these people are not idiots.

[paparush]

9. Every thing that man said was a LIE. Privatizing social security

was yet another swipe at dismantling the last vestiges of the New Deal and move America further toward an elite CEO class and a slave-wage labor class.

Privatizing social security was about destroying the middle class and working poor.

[elocs]

10. I'm against privatizing SS as anyone, but lets be honest here...

I don't think the privatization proposal was an opportunity to totally play the stock, but to mostly invest in conservative funds and anyone near retirement would not and should not be in anything high risk. There are enough good and valid reasons to be against privatization of SS without creating a strawman that is easy for us to beat down.

[NNN0LHI]

11. The Republicans plan was to "invest" a trillion dollars of government money to fund accounts

How much of that trillion dollars would still be left in those retirement accounts right now if they had done that back in 2006?

Don

[Ashaman]

16. You're right

Just because you now own your SS money, it doesnt mean you have to put them all in high risk stocks. Heck, even buying bonds and get that 4-5% guarantee return year after year is probably better than the SS amount you'll get at the end anyway. Plus, there's the benefit of knowing all that money you have is still yours and not relying on something that may not even be there when you retire. Can anyone say with certainty that the SS program will still be in existence 30-40 years from now??

[TayTay]

22. Yes, I think they can

The Social Security program is secure until at least 2041. (And even then, in a worst case scenario, would have benefits at 85% of current.)

However Medicare is in trouble. You would be better served looking at that as a trouble spot for retirement.

[Atman]

14. They were counting on it to cover up their default swaps and derivatives

That's why they had to go with the sudden "bail out" route instead when the SS privatization scheme didn't pan out.

.

[kentuck]

15. Bingo !

I think that was the impetus behind it.

[madokie]

18. You got it

I don't want to hear any talk about SS with the present crop of congress critters traitorous assholes either. President Obama's second term will be a good time to begin. Baring any unforseen happenings we will pick up several seats in the house and senate and probably governors mansions too. Surviving this next twenty two or so months is going to be the real test for us. If we make that we'll be well on our way to getting well as a country.

count on it happening

[madokie]

17. I'd be one pissed sob

being disabled due to pad, which I'm not sure is my fault in having. I can still pretty much do anything I could ever do just not very much of it. With pad when I do too much I'm fucked sometimes for days. Its like I just came in from a 20 mile marathon and have to get something done right now. Anyways I'd be pissed like I said


I don't remember my cholesterol numbers right at the moment but they have always been right where the docs say they need to be.
Just in case anyone needs to know that little bit of info, k. My doc who I have a lot of respect for has no answers for me either, just shrugs sorta when I ask him about that.

[RB TexLa]

20. But I would be buying in right now at the discount as well, right?

Saying the market isn't going to perform better overall than most everything else is never true over time. You can always pick out periods of time to show losses. But over time it is going to provide a return especially with buying during the down turns. But Social Security isn't just me.

With Social Security there are too many factors for the money to be invested in stocks. We do know roughly the amount of people who will be retiring and receiving money from the system, but the other side is what prevents it from being wise. How much population increase will there be, what years will increases in population occur. How many years of economic growth will there be pumping additional money into the system and how may years of economic contraction will there be lowering total wages and money into the system. How will the differing size groups of workers paying and workers retiring match up.

The advancement of medicine and longevity has already causes such a problem with the system as it is set up now, adding these factors with the inability to predict turns of the market with everything else and a word that begins with cluster and ends in "k" comes to mind.

Of course what they never mentioned was anyone can already do this. Just not with the social security money that you pay to the government. If available use a company 401k or any number of institutions that provide you an IRA for investing your money in stocks on a tax-deferred basis. You manage the plan however your investing wisdom moves you. Professional investing advice is also there for a fee, but it doesn't take that much research or intelligence to chose what strategy fits the time frame one has to retirement.

[suston96]

23. Insurance not Investment. Stop comparing Social Security to an investment scheme.....

Try this.....

http://www.ssa.gov/OACT/ProgData/fyOps.html

And especially this:

http://www.ssa.gov/OACT/ProgData/funds.html

Please note what Social Security is actually titled. It is an INSURANCE plan and not a retirement account.

The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund. The OASI Trust Fund began in 1937; the DI Trust Fund in 1957. These trust funds are managed by the Department of the Treasury.

Don't forget, Social Security was passed in 1935 when the US economy was still bleeding from the great collapse of the stock market in 1929. Think about that.