Today's WaPo - Q&A on Social Security

[neadods]

A lot of the arguments about how bad the proposed changes to Social Security are mired deep in projections and percentages and other math. The President of Harvard says I can't be good at math 'cause I'm a girl (and, to be brutally frank, I went to school during the 60s and 70s when that was a self-fulfilling proposition. I do suck at math. I suck at math because nobody taught it to this girl until my last years of high school and now that I'm out of school, I own a damn calculator anyway.)

Gender aside, there are a LOT of people who aren't good at math in this country, so eyes glaze over by the millions when people sling numbers and equations at them regarding Social Security. Accordingly, as a public service, I am excerpting today's math-free, plain-speaking Washington Post article by Glenn Kessler called Questions and Answers:
____
What happens if you die shortly after you have bought the mandated annuity?
That money is lost.

Would Bush's plan give me more in benefits than the current system?
That's unclear.

Wouldn't creating individual accounts require more government debt?
Yes.

Can I use the money for any kind of investments?
No. Under the plan, you would choose from a small number of diversified funds, all relatively conservative. They would be administered by the government and modeled after the Thrift Savings Plan now available to federal workers.

What if the stock market swoons and my total benefit is below the poverty level?
The administration has not addressed that scenario. Under some proposals, there can be a poverty benefit. But at the same time, officials do not want to reward bad investment choices.
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Those last two chunks are excerpted out of order for the purposes of comparison. The last paragraph is presented in its entirety. Stop and think about what they don't want us to stop and think about - that the Government will set up and run every single alternate SS investment plan BUT if said Gov't-created, Gov't-run plan fails, it is your fault for making "bad investment choices."

I wish I could gallop off in a witty biting rant that would spread across half the web at this point, but I am rendered utterly speechless at the thought that they are selling - and many people are buying - a system in which if you trust the Gov't to run the fund properly and they don't, it's your fault.

For which you must be punished.

Nowhere in this article was the counterbalance point that the current plan is set up specifically to prevent catastrophic personal failure due to loss of a single fund. The risk is spread, so the overall investment is secure. That's the lesson they learned in 1929 when everybody had their own personal investments with no government aid and look at how well they all managed.

ETA: Knight Ridder has Q&A of their own. It says that private fund managers will be managing these accounts instead of the Gov't, so I stand corrected.

However, there's not one word in it about what would happen to people whose funds were mismanaged into nonexistance - except to point out that if your private fund is hosed, so are you, because you've opted out of regular Social Security:

"Q: Would participants still get traditional guaranteed Social Security benefits?

A: Much reduced ones. People who open the new accounts would lose the guaranteed benefits roughly dollar-for-dollar for the money they divert from their wage tax into the new account. In exchange for losing the guaranteed benefits, you gain the chance to invest in assets that may earn more. Of course, they may earn less too, if your investments don't work out."

So you better pick a good fund, because nobody will guarantee that you won't be living in a shopping cart and eating alpo if you don't. I do note, however, that there is no mention in the Bush plan for payments for disability. Y'know - Social Security's OTHER use.

Comments

[lagilman]

I DO understand math -- or rather, I understand math-finances well enough to manage my own -- and you do NOT want to get me started on this. Really. Because it starts with bad words and goes downhill from there.

Even the Estranged, the Republican-voting financial analyst-for-a-living, is saying things that rhyme with 'what a shmuck?'

[neadods.livejournal.com]

Even the Estranged, the Republican-voting financial analyst-for-a-living, is saying things that rhyme with 'what a shmuck?'

And is this going to translate to resistance to the program, one hopes? Because it will take widespread public outrage to get them to say "ooops, you misunderstood, we were just kidding" like the whole "postpone the election 'cause of terrorists" thing.

[pinkribbonwench.livejournal.com]

What I don't understand is the self-fulfilling prophecy aspect of it -- if new funds are diverted out of the old Social Security system, won't the old system crash and burn all the sooner?

But you're right -- that's the scariest, and most infuriating, analysis I've read yet.

[neadods.livejournal.com]

if new funds are diverted out of the old Social Security system, won't the old system crash and burn all the sooner?

Yup. Thereby "proving" that the system was failing. Oh, and by throwing a lot of soon-to-be-retirees back into the workforce because the system they worked under all their lives won't fulfill its promises.

[elemental-fey.livejournal.com]

Which is just great in a time period when we don't have enough jobs for everyone who wants to work to start with ::Growl::

[faireraven.livejournal.com]

Under the plan, you would choose from a small number of diversified funds, all relatively conservative. They would be administered by the government and modeled after the Thrift Savings Plan now available to federal workers.

Oh, you mean the TSP that many feds have taken a bath on in the last couple of years?

*ptui*

Argh.

[fiona64.livejournal.com]

I'm a former Federal employee. When the Thrift Savings Plan (TSP)was implemented, those of us who were already "in the system" had the option of remaining in Civil Service Retirement System (CSRS) or switching over. Fortunately, I had a financially savvy boss who helped each person individually decide whether it was worth their while to switch over.

Guess what?

For the majority of us, it wasn't. TSP is one of the worst-run retirement systems going. And they want to use it as a model for the "new" Social Security?

I have often asked the television news whether they really believe the public is this stupid. Unfortunately, I'm reaching the conclusion that the public *is* this stupid. As long as "them queers cain't get married" and "we's kickin' ass in Eye-Rack," nothing else matters.

Argh.

Re: Argh.

[neadods.livejournal.com]

For the majority of us, it wasn't. TSP is one of the worst-run retirement systems going.

Urg. And here I was just about to try for a gov't job... But as I keep telling my parents, government work ain't what it used to be.

Re: Argh.

[fiona64.livejournal.com]

I resigned from gov't work, after 16 years in the system. I was grossly underpaid for what I did, even though I loved the work ... but I worked for DoD and all of the bases were being closed off. I just got sick of the nonsense, frankly. And, any new Fed employees are *required* to use the TSP. It only works if you can afford to plug additional funds of your own into it. Here's why the majority of Fed employees can't do that: After 16 years, and being in a "management" job, I was making $37,500/year and living in a high-cost area. That $37K was *after* the 11% cost of living increase we'd received to keep people from leaving Fed work in high-cost areas.

Trust me ... you don't want to do this.

[elasg.livejournal.com]

These past few months have been increasingly frustrating, but I forsee far more of this type of lame duck maneuvering. These jerks are going to shove their extremist crap down our throats while they can, but we CAN'T let this go unresisted. I know what I will be doing, I only hope the rest of the country wakes up and realizes that they elected a facist.

[fiona64.livejournal.com]

Bush is basically on a "campaign schedule," even though he isn't running, trying to convince people that this plan will "work." He's specifically choosing more rural locations for his little whistle-stops, because the incidence of folks with higher education is significantly less.

Interestingly enough, DH said he saw two polls shown on CNN last night ... one of folks 18-49 years old before the "new SS" plan was explained to them, showing 58% approval ... and one of the same folks after it was explained clearly, which showed 7% approval.

As I said earlier, this administration is pandering to those who are happy to remain in their blissful ignorance. It makes me sick.

[elasg.livejournal.com]

*Joins Fiona at the heaving basin...*

Oh, do I want this jerk to get a wakeup call...

[kefiraahava.livejournal.com]

"I do note, however, that there is no mention in the Bush plan for payments for disability. Y'know - Social Security's OTHER use."

Because the [deleted] coming up with this plan don't give a [deleted] about the disabled or their families, of any age, ethnicity, or disability. I keep thinking that it will take a mass murder/suicide by caregivers of the disabled--and CNN filming the blood and brains spattered all over the place, preferably on the Capitol steps for maximum impact--before anyone in power PAYS ATTENTION to the crisis of the broken system for "caring" for the disabled in this country.

Okay, that's not quite fair. The WSJ and the NYT have been running very good articles about the crisis in the system and the fact that there are *millions* of elderly caregiving parents in this country who are the sole caregivers for aging people with disabilities. These parents are dying, increasing the population of people with disabilities who need help. Because of medical advances, more and more people with disabilities live longer. Some elderly caregiving parents HAVE committed murder/suicide--killing their disabled adult children who they spent their whole lives caring for. Incidentally because they spent their lives caring for those children, they weren't able to pay into Social Security or paid in less because that care took time away from working. They did so because they were too afraid of what would happen to their children when they themselves died.

Apparently Bush & Co. haven't been reading those articles. Not surprising. IMO, WTF do Bush & Co. care about people with disabilities anyway? They don't make large campaign donations, after all. So of *course* it doesn't mention disability. After all, according to their line of thought, if you're disabled, it's your own fault, right?

[maryannegruen.livejournal.com]

Their outlook on life is Survival of the Fittest. If you're strong enough, you live. If you don't, you die.

Archaeologists usually consider societies that take care of their weaker members to be more civilized. Ours seems to be going in the opposite direction.

The whole thing with Social Security is a shell game, plain and simple. They're basically asking folks to sink their retirement money into Off Track Betting. Sure you can make big money that way sometimes. But most of the time you lose. Meanwhile, their buddies who handle the money will pick up a fee of 20% to 30%. So they win no matter what.

It's a con job, pure and simple.

[fiona64.livejournal.com]

Their outlook on life is Survival of the Fittest. If you're strong enough, you live. If you don't, you die.
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Except, of course, that Darwin didn't mean it like that. Environmental fitness does not equate to "might makes right," no matter how much the Bush administration would have us believe that. Industrial mellanization of moths (an example of "survival of the fittest" in the correct sense) is not the same as "I'm bigger than you and richer than you, so I win."