Interesting times ahead....
http://story.news.yahoo.com/news?tmp...88485db045&e=4
Whose Social Security Stash Is It?
The International Star Registry was way ahead of President Bush and
his "ownership society." Long before the President ever thought of
giving people their own little piece of Social Security the
International Star Registry was giving folks their own little pieces of
the night sky. For $54, plus shipping and handling, the organization
gives you your very own star. Call it an intergalactic ownership
society.
Of course, stars aren't the same as retirement money. The International
Star Registry is quite frank that you don't actually own your star. You
just get to give it a name (which, by the way, isn't recognized by
scientific authorities). In contrast, President Bush argues that the
money in the private accounts really, really would be yours.
"I think people ought to be encouraged to own something in America.
You'll be owning a part of your retirement account. It's actually your
money to begin with. It's not the government's money," Bush said on
Feb. 4 in Little Rock, Ark., during his tour to promote his Social
Security ideas.
UNTOUCHABLE. But would you really own this money? The more you hear
about the details of Bush's plan, the more you wonder whether you would
actually own the money in your private account -- any more than you can
claim to own a burning ball of gas thousands of light years away.
One thing ownership means is being able to do what you want with
something. But under the Bush plan, you'd be given just a small range
of approved options of how to invest "your money."
What kind of ownership is that? When money really is yours -- like your
take-home pay -- the government has no say over how you invest it.
Gold? Pork bellies? Santa Monica real estate? Go for it.
Or a new car. If your retirement stash is truly your money, you should
be able to spend some of it on a new SUV -- or a college education, or
nursing care for an elderly parent. That wouldn't be allowed under the
Bush plan. People wouldn't be able to touch the money in their accounts
until they retired.
BIG BACK DOOR. In fact, for people below a certain income cutoff, the
money in their accounts might be as untouchable as Alpha Centauri.
Under the plan Bush is advocating, people whose Social Security income
alone would leave them below the poverty line -- a very large group --
would have to put all the money in their accounts toward buying an
annuity. That's a monthly payment that would continue until they die
(just like the Social Security checks they already get).
Another mark of real ownership is that the thing you own can't be taken
away from you. And it's true that Uncle Sam wouldn't be able to take
the money out of private accounts. But the system has a wide-open back
door. While the government can't take money out of private accounts, it
certainly can cut back on the benefits in the traditional part of
Social Security.
Indeed, cutting benefits is exactly what President Bush is planning to
do. The whole rationale for private accounts is that they'll earn good
returns and offset the reduced benefit.
LEFT POCKET, RIGHT POCKET. It doesn't take a conspiracy theorist to
imagine what could happen in a decade or so. Let's say private accounts
are a huge success and Americans accumulate scads of money in them.
Let's also say Washington is still trying to fix traditional Social
Security's finances. In that case, lawmakers will simply cut
traditional benefits by roughly the same amount as the windfall in the
private accounts.
So the government can't take money out of your left pocket -- that's
the private account. But it can accomplish the same thing by taking
money from your right pocket, the traditional benefit. And you'll be
just as helpless as if you never had a private account in the first
place.
Nothing, really, will have changed.
Is this wrong? Actually, no. President Bush has good reasons for
creating a system that puts tight restrictions on private accounts.
LOGICAL AND DEFENSIBLE. If people can invest in anything they want,
many will make stupid choices, go broke, and end up requiring help from
the government. Same thing with letting people take money out in a lump
sum, either before or after retirement. If they blow the money, they'll
wind up on the public dole.
From the viewpoint of future workers, it might even be logical and
defensible for the government some day to offset windfalls in private
accounts by cutting government-guaranteed benefits.
The problem isn't the restrictions on ownership in the Bush plan. It's
the false billing, which is aimed at drumming up support from a
skeptical public.
You won't really "own" the money in your private account. Likewise, you
can't own stars in the sky. At least the International Star Registry is
up-front enough to admit it.