Dude, you know it's a crock! Bush's PLAN for SS reform is to reduce benefits. Regardless of the performance of private accounts, benefits will be reduced. Every responsible economist is projecting slower global growth over the coming decades with MOST of the poor performances occuring in the developed world (largely due to demographics - aka "aging population").
Can you back that up? Besides, private accounts aren't solely limited to Developed nations. Perhaps you should read what each funds entails before arguing any different. The I fund is, of course, a blatant example against what you are saying. Regardless, Economist's predictions(of which you provide no truth but your word) are at best simply that. A prediction. Economists often disagree, and I'm sure they disagree about global growth for the next 20 years. If economists were so often right, then all of them would be extremely wealth. Economics is not an exact science, and much of their "predictions" are based on theories and interpretation of what little data they have. Your argument is heavily on the theory, but it lacks substance and proof.
Further, the comparison to the government thrift is arguably the BEST but the notion that someone should replace the guaranteed benefit with Bush's ideas (OK the ideas loaned to him) his laughable. The premise is that "long term" trends exhibit good performances in the government thrift but 20yr trends are a different animal and 10 yr trends is a different planet. As a quick aside, have you ever heard "past performance is not indicative of future returns?"
You must have glossed over the entire explanation that I provided. 10 and 20 year trends were actually just as good, would you like that data? 10 year S&P from 1990 to 1999: 17.3% annual return. Five year from 1995-1999 = 23.0% 20 year from 1985 - 2004 = 14.47% annual return. Have you ever heard that facts trump your theory?
guaranteed benefit? Now, that is *IS* something to laugh at. 1,939 per month for the FULL benefit for someone that retired at 65 years and 6 months. Let's say they live until 80. Someone had to work 47 years making 60 thousand dollars to pay that with 12% FICA. Here's the bullsh!t, that you think that many people have or will do that. It simply isn't true. Every worker didn't work at 60k for 47 years and FICA hasn't always been around 12%, either. Guaranteed benefit? For whom? You've got to be a crackpot to think that SS is anything more than a Ponzi scheme. There is no guaranteed benefit when the ratio of the pool of workers to retirees is decreasing. Past Performance over the past 30 years has been above 10%. I posted the other figures above, since you yelled and whined about how it wouldn't be the same for 10-20 year scenarios.
Oh, and did you miss the part where the Plan is geared so that your investments turn into bonds and/or more liquid and conservative investments the older you get? That's right, there won't be a market crash 5-10 years before you retire and it hurt you badly. It will already have been mostly converted. Of course, that is YOUR choice to make, but the default plan is selected like this. Regardless, the rate of return on Social Security for someone under 50 is about 1-4%. Even the most conservative bond plan under Bush is 7-8%. Ever heard of Compound Interest?
Even if you accept Bush (and Mill's) rosy return scenarios you then have to apply practical limitations:
1) Amongst the high wage earners (55-65), the program cannot be accessed or they will only have access to the most conservative options. Which means minimal opportunity for good returns with maximum loss of guaranteed benefits.
Um, how do you figure? Those 55-65 get their full benefits until 2012 in which there is a 0.9% reduction. So, ummm, wrong. And no, they cannot get into the private program, so they have no risk at all.
2) Amongst the next strata which is likely to be high wage earners as well (45-55), they are in a similar bath tub.
Simply not true. They rate of return is still higher. All you can do is obfuscate, you haven't provided any data, stats, or sources to back up your claims. All you have is an opinion, and one that lacks merit. You will have 15-20 years to invest in that group, and their guaranteed benefit will still be mostly there. The reduction will, of course, be covered by the higher rate of return they get. 7% at worst, and in this bracket you can still have a mixed group of the less risky stocks and the bonds. So, probably about an 8-9% return. Still much better than the >4% return they get with SS.
3) Wage earners under 40 will have everything at their disposal but they are least likely to make the kind of salaries that would be able to maximize opportunities in the markets.
Umm, ok. To "maximize" opportunity, you only have to be making more than 25,000 a year. I'd argue that most would be making this, but they can still contribute up to 4%, so anyone working fulltime is likely covered. Your argument again is nothing more than obfuscation.
Don't even get me started on the convoluted machinations (annuities, restrictions) at the end that essentially make Bush's claims of "ownership" laughable.
Few details have been released, so you must have inside information. I'd like to hear what you have then. The restrictions are few based on what details have been released so far. Not much has been said about annuities so far.
The fundamental FACTS behind Bush's Social Security Plan is that it's pomp but no circumstance in comparison to acutal problem.
Well darn, that's exactly like your
post was.
Bush's plan will be an abject failure in "fixing" SS. His "reform" is curiously comparable to the Medicare Modernization Act. While addressing a far more serious (and certainly impending "crisis") Bush has made the problem significantly worse by raising the expense but making no fundamental changes that are likely to substantially reduce costs. Yet if you listened to candidate Bush you would think he had "saved Medicare".
I don't know whether Bush is truly this clueless or a flat out liar. But an honest and intelligent President would start with REAL reform and then tinker with pet projects.
Just good 'ole partisan hackery from you, and I guess I shouldn't have expected anymore. You bleated and whined, but didn't provide any sources, didn't provide any numbers, and you made callous obfuscated claims, when you made mistakes on half of what you assumed the plan was about. Perhaps you should actually understand the plan, do some research, and then come back to the table.
