In politics we need to get over whose idea it was..
You're the one that keeps bringing the topic up regarding who brought the idea into the political fray.
Case in point.
First off, from what it sounds like the private accounts would be more like a 401K. Meaning you don't get a choice of investing in whatever you want. You only get to choose from selected mutual funds.
Even if you did get to invest in individual stocks, funds, or bonds at you choosing.
Bonds have returned what on a historical high level?
5%?
During the recent recession and the years since with Greenspan lowering the interest rates bonds have returned close to 2%?
With the privatized accounts the government will take 3% off the top of your profits so in the 2% scenario you would have lost money.
After taking that 3% you also then pay for the people selected to manage the funds, then if you still have a profit over what you invested you only get to "take" the amount that if a profit.
Then you don't even get to actually take those profits for yourself they are treated as an annualized annuity and if those profits combined with what you left in your social security amount are above the amount considered to be the poverty level for each year after you retire you get to use the annuity amount.
Meanwhile all of the funds that were redirected to the private accounts are removed from what would have been available in the social security funds for making payments meaning that the government will need to borrow its $2+ trillion to balance the difference made by the private accounts.
Finally, you may well be a great investor and would make money on your private accounts. In general though, 70% - 80% of the people that make open investments lose money. A lesser but also high percentage of people number of people lose money on their 401K's because they either put too much into the risky funds rather than safe fund or because the funds selected are managed by people that are clueless on investing and know they will make money regardless of how their funds perform.
The local fund manager(s) that was running the 401K plan for the company I worked for back in the late 80s and early 90s (when the stock market was given very good returns in general) we able to make even their "safe" funds lose money. For a period of ~2 years I was making max contributions to that 401K plan and the "safe" funds were losing more money than I was putting into the plan.
Some people would probably find ways to make a profit on their private social security accounts, but if investment history is any indicator the majority will at best make a marginal profit but not enough to cover the fees they will have to pay the government for managing their funds. So the accounts are likely to do absolutely nothing for the majority of people that would use them other than to further increase the national debt.
Adding private accounts doesn't implement a new system?
It certainly does, plus it doesn't even remotely FIX the predicted problems with the existing social security system.
You can invest your own money in several ways, you're not likely to be able to invest your private account funds in a manner of your choosing other than to be able to select various funds.
Of course it was meant to cover people in that scenario. People living at or below the poverty level haven't been excluded from getting social security benefits.
It just happens that more people are living at or below the poverty level now than ever before.
The GWB administration's inability to sufficiently produce jobs after the end of the recession has contributed to that. He's been part of the slowest recovery from a recession in our country's history. The previous slowest recovery would have created a net gain of over 5 million jobs by now rather than basically having a net gain of 0 jobs created.
How about taking the $9.9 billion wasted on the development and testing of the new missile defense system that has been 2 for 2 so far in being a miserable failure for those test?
How about taking the $170 million the Pentagon spent on a new computer system they won't be able to use because it is out of date and unusable before it is even finished?
We'll continue to throw excessive amounts of money to the military to waste in their normal manner, but if any of those people running things were in the private sector they'd have been fired for such poor performance.
The world's total expenditure for FY 2004 for military related operations is supposed to break the $1 trillion mark for the first time ever. The US part of that is going to be near (and probably over) $500 billion.
Isn't it nice to know that our country can spend as much (or more) money on our military than the rest of the entire world combined?
This is wrong, the amount you earned and put into the account DOES impact the amount you (or your surviving spouse / children) can receive from social security.
Plus, the overall amounts each person receives in social security benefits has increase significantly over the years. Especially since 1979 when it was altered to be increased using a wage increase based index rather than a price increased based index.
Agreed for the most part.
I'll also ad that the self employed pay more than those working for a company as well.
If they are a sole proprietory rather than being incorporated they end up paying ~11% instead of the ~7% normally paid by individuals. Its lower than the ~14% payed combined by individuals and their employer.
If you're incorportated by still the only employee of your company you end up paying the ~7% as the individual, plus the ~7% as your own employer.
Agreed, but techically the government "borrows" the money from the social security fund and have to pay it back at current interest rates.
From listening to Dicky and Dubya and their advisors though it sounds like they want to default on paying those loans back and use that as part of their rationale that the social security fund is going to be bankrupt sooner than previously estimated.
I have to wonder if they'd act the same way if they hadn't had to borrow from it at historical levels during their tenure in the White House though.
worst rule ever.[/quote]