Social Security Plan to confiscate excess returns from private accounts!

[Romberry]

The Bush plan to "privatize" Social Security depends on funding the transition costs by confiscating excess returns from new private accounts.

That's right. They intend to calculate what rate of return you need to achieve to maintain the basic level of guaranteed benefits and if your account outperforms that rate of return, they will simply take it.

Who says? The White House says!

http://www.slate.com/id/2096337

Ron Sukind in Slate:

The Bush team's secret plan to "reform" Social Security.

During the 2000 campaign, candidate George W. Bush seemed particularly confident about his ability to pay for Social Security reform. Despite independent estimates that creating the kind of "voluntarily" private accounts he envisioned could cost more than $1 trillion, Bush consistently took the position that he could reform Social Security for free, without undermining promises to baby boomers anticipating retirement over the next several decades.

Why was Bush so sure of himself? According to documents unearthed yesterday from the trove of 19,000 files given to me by former Treasury Secretary Paul O'Neill, and a bit of additional probing, candidate Bush and later President Bush believed in the "Lindsey Plan." These documents show us what the president thought about Social Security reform at the only moment over the past three years—the fall of 2001—when he was fully engaged with this issue.

Larry Lindsey, Bush's tutor on economics during the campaign and later chairman of the White House's National Economic Council, devised a scheme based on creative accounting principles. Essentially, it proposed that the government would issue substantial new debt to sustain old-style benefits. This debt would be serviced and paid down by confiscating revenues from the higher returns from those opting for new-style personal accounts.

More...

[billyoc]

1. This bit of arithmetic sleight-of-hand will go right over

the heads of every single mouth-breathing moonie that voted for *. :grr:

[Romberry]

5. Sadly enough, unless the Democrats can frame the issue...

...I think you may be right. Framing should be easy: "The Republican plan to privatize Social Security depends on confiscating your money!"

That should be simple enough for most people to understand, yes?

[Emboldened Chimp]

2. Hey, they voted for it, they got it...

Not my problem.

[Romberry]

7. Well, since it affects me and mine and....

...presumably you and yours, I'd say it's a problem for all of us. I didn't vote for Dim Son and I definitely feel it's my problem, same as the needless Iraq war, the busted budget, the deficit and tax loans (paid for with borrowed money) for the affluent.

[Emboldened Chimp]

11. Well, if the system is truly voluntary,

then I most likely won't be participating.

[indepat]

32. Bingo! We the people get the government we deserve whenever an incumbant

is returned to office. Hopefully no one responsible will whine, moan or complain should this bear out.

[muriel_volestrangler]

33. Can I repeat the question I asked in post #14?

Can anyone show where the presentation says the rate of return will be capped?

Suskind claims this in his Slate article; but I can't actually see it in the government presentation (which is, annoyingly, at 90 degrees - so it is eady for me to miss it).

[rkc3]

3. So if it's projected that I will require an 8% return on my investments

through Social Security and I earn 10% the additional 2% goes back to the gov't. That's would be OK with me, but only if during those years where I earn less than 8%, the gov't bucks up to cover the gap.

God Bless America - let's hope so, cause I think we're fucked.

[Florida_Geek]

4. Oh so if you private account makes

12% per year return,,, and the govt thinks you only need 3%, they take the rest.

[Romberry]

8. Right. You take the risk...

...and they take the reward. It's the standard GOP business plan (privatize profits and socialize risk) in reverse. Brokerage firms will love it!

[demodonkey]

6. And if they get "under returns", as we all know...

The debt will be serviced by confiscating benefits from the SS recipients (probably me by that time!)

Welcome to the New American Century, all you bozo Bush voters!

[bullimiami]

9. when it underperforms will they make up the difference?

or is it just a limit on how well you can do, not on how badly you can get ripped off.

government protection program. screw the people.

[Eric J in MN]

28. Picked the wrong fund?

Then eat cat-food, under the Republican version of Social Security.

[intheozone]

10. I heard this mentioned once during the campaign

but not by either candidate of course. I believe I heard it from someone on the Lehr News Hour. I have been wondering why, with new talk about privatizing SS, no one has brought this up. Unfuckingbelievable!!!

[bush_is_wacko]

27. Bush brought it up again immediatly following the campaign!

[Name removed]

12. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Romberry]

13. Simply not true

George, when you write things like "The Social Security fund will dry up before I ever get to receive funds if it is left like it is", it shows me that you truly have not bothered to educate yourself on the subject and are allowing yourself to be bamboozled by the talking heads.

Social Security is fully "paid up" until 2042 and the "date of default" has been pushed back ten years (from 2032 to 2042) in the last four even with the lackluster economy.

The trustees at the SSA say that fixing Social Security effectively for the next 75 years (and I won't comment at this point on the "validity" of 75 year projections) can be accomplished with a mere 1.89% increase in FICA. You are simply wrong when you say such options merely forestall default and pass it on to our children.

You can find some recommended reading here: http://tabletalk.salon.com/webx?14@@.773a436f/387

You can find links to the SSA and their reports starting here: http://tabletalk.salon.com/webx?14@@.7739b7ab/91

You can find links to long discussions of the issues spread over a number of posts beginning here: http://tabletalk.salon.com/webx?14@@.7739f82c/4527


I am going to ask you (and others) to read the real information before you make statements based on what you hear repeated in the "liberal media." Get the facts, not the spin.

[muriel_volestrangler]

14. Well, I'm buggered if I can see where the document says there's a cap

on the rate of return they'll allow before taking the money from you. Of course, having to read the thing at 90 degrees doesn't help. Why couldn't Suskind have put the images up on his website so we could read them without getting a crick in our necks? Probably the worst designed web page ever.

So, can anyone show where the presentation says the reate of return will be capped?

[CityHall]

15. That would have been good to know before the 3rd debate.

[salin]

16. Then what is the point? The promise is the potential of "higher

returns" - but if those returns are kept by the government - then there is NO upside for participants - only a possible downside. If the plans return less - does the government pay (in which case this is all a part of "socialize costs, privatize any gain (via the investment folks fees), and provide no gain for tax payers funding the scheme." If the returns are not guaranteed byu the govt then it is a case of no gain, even in good times for the payers, but potential real harm - risk with no potential for gain? Ridiculous! But we knew that.

[Jose Diablo]

17. How it will probably work is simular to pensions

If the stock market does good, in that year they will say the fund is overinvested and bingo, suck the money out. If a bad year, well, you invested poorly. Sorry.

Edit: Its a moot point though, because they are in power and it will be a done deal by 2008, as will the judiciary. As for investing in good returns, with the SEC in republicans or the DLC's loving hands you can be sure it will be a 'fair' game, sure, uh ha. Go ahead and believe me.

[JHB]

18. So to sum it up...

...one of the main arguments for piratizing SS is that private accounts would provide a greater return...

HOWEVER, ones that DO provide a greater return will have that confiscated in order to pay the costs of "privatization". So everyone involved gets more money except for the actual retirees whom this is supposed to benefit.

Another classic "rob Peter AND Paul to bribe Pilate" situation.

[indepat]

19. Seemingly would be fradulent in the private sector, but in a sovereign(?)

nation, the laws of the Congress are the laws of the lane unless overturned by the Supremes and we all know Tony would do the right thing.

[Lindsay]

20. Minor correction...

it's only fraudulent if (a) you're a liberal or (b) you get caught.

[DinahMoeHum]

21. Are we talking about Bait-And-Switch here??

Pardon my cynicism.

:evilfrown:

[cap]

22. actually, this would gradually end those accounts

in the down years, your account would go down. In the up years, you'd never make up for the losses in your account.

[Jose Diablo]

23. If history is any indicator

how it would work is there would be a small siphoning in the beginning with rate of returns comparable to equities market. Then as the accounts grew, more would be more siphoned until a level was reached that would be sizable. Then right before the first x gen are ready to retire, oh my, the country would experience an economic downturn. The predators in the market would bear the savings accounts down and essentially gut the accounts. Everybody would say you should have invested more wisely, when in truth it would have been the fiscal manipulation of the investment banking and the fed money supply that caused the downturn.

If anybody thinks we are living in a 'free market', even in the equities, I have a bridge I'd like to sell you. The market is all about the supply of money, in its various forms. There is no invisible free hand of the market like taught in school. Anymore than money is some natural animal or plant. Money is an invention of humans, nothing more.

[pfitz59]

24. Bingo!

All the while the bankers and brokers will be reaping in transaction fees and "fund managemnet fees". For the down and dirty go watch "Trading Places" again! The brokers and bankers always win, whether markets go up or down. One only needs to research the "Walker" part of George WALKER Bush to understand how unscrupulous money managers reap wind fall profits EVEN during the Great Depression (or how folks like the Walkers had a hand in making the market crash!) George Herbert Walker, thief among thieves, and great-grandpappy of the current occupant of the People's House!

[bush_is_wacko]

25. And you are surprised by this?

this is exactly why the Democrats won't voter for it. They know the Repiglicans can't resist getting their hands in other peoples pockets. I thought it was a great idea when I first heard it until someone explained to me how open to rampant abuse it was. The Bush administration is sure to dip into it big time. Heck, they got the biggest deficit in history. Let's skim a little more off SS while we got four more years in the WH. It'll make us look good if we can pay down the debt, revamp SS, and have a war, all at the same time! GWB needs a legacy, this is his opportunity to steal one!

[indepat]

26. The people must realize that funds to run the government must come from

somewhere.

[salin]

29. rather defeats their little "ownership society" meme.... govt still

controls and govt confiscates - sounds like one doesn't "own" the accounts at all. If the benefits are going to be the same in the end... what is the point of introducing such risk? Oh- the brokerage and other fees... what a surprise...

[struggle4progress]

35. "Ownership Society" only means the ruling class owns everything

[SoCalDem]

30. Republicans have a keen sense of timing

Whenever there has been a "surplus" of money , they always seem to be able to gain power and steal it..

The disguise their theft with coded words, and lofty speeches, but the result is always the same.. Lots of people who "thought" they had a nest egg, suddenly only having egg on their faces..

They are then propmptly chastised for not "planning better".. The robber barons always have the law in their pockets, so other than a few show trials, they always end up keeping your money..

It happens almost every generation, so people must have collective amnesia..

Some of the thefts are masked by geo-political events (like wars), so people have more things on their minds, and the theft is hardly noticed in the sea of red-ink from the wars..

This recent coup will result in finishing off the middle class. It would have been done sooner, but for the dot.com boom..

The reprieve is over, and the slide has started.

Signs are everywhere, but the only ones that lots of people pay attention to are the ones that say "25% Off"..


Look at all the airline employess who, after 20+ years service, are just being told.. sorry.. no pension for YOU..

Look at at the grocery workers who are being squeezed out of "family-supporting" jobs by walmarts..

Look at all the college grads who are graduating owing 40K in student loans and another 10K to Visa or Mastercard.. They will not be middle class..They start their adult lives as indentured servants, too afraid to change jobs because they owe so much money. Their creativity is effectively squelched, before they even have a chance to USE it.

Jobs that used to support a family and a house payment and a car payment and an occasional vacation...and savings.... those are gone forever. For the masses, anyway. There will always be a few exceptions to the rule, but the facts are these... we are working MORe, and our spending power is decreasing. Where Dad alone used to be able to comfortably support his family, now even Mom AND Dad are barely keeping their heads above water.. and remember too, that family size is down too..

Anecdotal "evidence"..

In the time frame of 1968-1975, my friend's parents managed to pay for college for all three daughters..

They owned their own home(nothing fancy), had 2 cars, took vacations.
Dad worked at a factory, and Mom worked at Sear's candy counter 3 days a week.

Dad's union benefits allowed them to live the American Dream..

We now have the American nightmare:(

[minorl]

31. Consider the generational differences...

40k in student loans and 10k in credit card bills...

How much mocha latte, Guiness, and Tommy Hilfiger is wrapped up in the 10k? What kind of cars are people driving today? I suspect your father and mother knew how to tell you "no." They probably didn't have a credit card with a 30k limit.

The current and rising generations are conditioned to "immediate gratification." I won't presume to capture the essence of economics with one sentence, but in many instances people are poor because they are uneducated (and I don't mean educated in the GPA sense).

[Beetwasher]

34. Yes, Blame The Abused

What a load of crap...It's THEIR fault, not the thieves skimming off the top...How very errr, um, Republican of you...

[A Simple Game]

37. minorl does paint with a very broad brush,

but I have seen far too many people of all ages spend money on useless and overpriced stuff just because it was burning a hole in their pocket.

[LakeCohoon]

36. You mean the government lied to me?

Why, this can't be true!