Social Security Fix – Don’t Believe It
Maybe Americans are catching on. I hope so. Don’t believe the Bush fix for Social Security.
Social Security was created during “hard times” as a safety net for future “hard times.” Now we are told that we are coming up on the baby boomer generation retiring and there won’t be enough to go around because, after all, this is “hard times.”
The very rich have never had to worry about what they pay into social security or what they get out of it; that amount of money isn’t even on their radar screen. Where social security does make a difference is for the poor – and the middle class. Let’s say that again – for the middle class.
What is the middle class usually up to? Paying a mortgage on a house, putting kids through college, saving, and hopefully being able to have a bit of well earned fun. There is a lot of caretaking going on – for kids, parents, and grandparents.
Social security is surely a benefit to the poor, but it is equally essential for the middle class. The way to find that out is to become disabled, be a child without parental support, be a caretaker who has a sporadic work history, or lose your job for a significant portion of your working life.
Yes, Social Security helps the poor. But very significantly, it keeps the middle class from entering the ranks of the poor. Since Social Security has been implemented, the number of older women in poverty has dropped by 30%.
Because Bush has cut taxes for the very rich and congress has been spending the nest egg that the middle class has been paying into, the Bush changes for Social Security will create the great divide – the very few very rich, and an increasing number of the middle class that joins the poor.
What Bush proposes for private accounts (2% of income) will amount to very little. One wonders what the big argument is over when there are already 401ks, Keogh Plans, and IRA accounts. If you have the money, you can already invest it as you see fit. However, if you lose your job just as the kids enter college, you could be in a different situation. If you are a single parent (half the population is divorced), you make $26,000/year and you have two kids, you aren’t investing much of anything.
But Social Security as it is will make a difference when you retire. Bush’s 2% won’t.
To have any kind of savings, you will have to be paying in every year over a long time. Plenty of situations come up for middle income Americans when circumstances interrupt that. And what about this 8% yearly increase? The times, and maybe that includes the financial times, they are a changin’. How much of “privitized” money is going to administrative fees? And who is going to get those fees?
Privitization isn’t going to help the situation. It will increase the national debt tremendously. And middle income Americans will be paying for it – the same middle income Americans who have the privitization option. But where’s the savings if you’re paying off that national debt while supporting your parents who’s Social Security benefits have been cut to the point that you have to support them? You’re going to be paying more in general, will have reduced retirement benefits when you get there, and I’ll bet you’ll have more financially marginal people in your family to support on that minimal privitized Social Security account.
Bush wants privitization not because this amount is going to improve the lot of middle income Americans. He wants private accounts so he can hand yet more money to his already very rich friends who will be “managing” it for you. I doubt they will feel financially sympathetic toward the significantly increased number of poor. They’ll already have want they wanted: the money siphoned off privitized accounts.
The Queen of Amerindia