Today's WaPo - Q&A on Social Security
Feb. 4th, 2005 08:07 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
neadodsA 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.
----
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.
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.
----
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.
