Bush's Chile Model: Take Their Pensions and Run!

[genieroze]

Bush's Chile Model: Take Their Pensions and Run!
by Cynthia R. Rush

Almost 25 years ago, in 1981, the free-market ideologues directing the economic policy of Gen. Augusto Pinochet's military junta in Chile—most of them trained at the University of Chicago in the fascist quackery preached by Milton Friedman and Friedrich von Hayek—privatized that country's Social Security system. Today, Chile is George W. Bush's model for Social Security privatization. Chile took $22 billion deposited in the government-run social security fund and handed it over to 18 private investment funds, known as AFPs (Pension Fund Administrators).

The chief architect of Chile's privatization scheme was Harvard-trained economist José Piñera, a longtime member of the Cato Institute's Project for Social Security Privatization, who is cited frequently by President Bush. Piñera has travelled the world to convince, especially, developing sector and Eastern European nations of the benevolence of Chile's pension and free-trade model.

Through a splashy multimillion-dollar propaganda campaign, Piñera and Gen. Pinochet's "Chicago Boys" told Chilean workers the same thing that Bush is telling Americans today. The large number of funds (run by banks, insurance companies, and other financial vultures) would offer workers an array of "choices" on how and where to invest their money, without government looking over their shoulders. They promised workers a high rate of return and a secure future.

Those who agreed to leave the old U.S.-style "pay as you go" Social Security system and join the new privatized one would experience nothing short of earthly paradise, the privateers vowed. All they would have to do is allow a mandatory 12.5% of their monthly paycheck to be deducted and deposited into the AFP of their choice, from which it would be "wisely" invested. Unlike the old system, employers would make no contribution at all.

http://www.larouchepub.com/other/2004/site_packages/ss_privatization/3149chile_model.html

[cornermouse]

1. And if the stock market crashes or someone with

access to the AFP funds moves them to a secret account in wherever and goes on a permanent vacation? What happens to their "retirement funds" then?

[StClone]

2. Like Randi said

If the stock market were always such a sure thing wouldn't everybody be rich by now?