"Koz" wrote in message ...


But when you look at the real numbers, the Bush plan is not about you needing to keep your own money or "saving" social security. The notion of depletion of the SS trust is based on growth numbers at a rate about half the historical rate. However, the numbers presented of what you could earn on your own money are based on not only an increasing growth rate but the average stock price to earnings ratio increasing from about 20% to over 100% in 50+ years. You can't have it both ways. If you use the economic growth numbers that are used to justify what you could personally ean from your private investment, SS actually doesn't go broke at all.

The word that keeps entering my mind when I hear the administration's statements on Social Security is "Disconnect".
There is a "Disconnect" between the rhetoric of doom and the reality of the situation; SS is neither going "Bankrupt" nor "Bust" any time in the next few decades. A manageable change (or a package of small changes) made right now would keep it in the black for the forseeable future.

There is a "Disconnect" between the "problem" as stated by the administration and the "cure" put forth by the administration. Specifically, the "Cure" (a 4% private account) makes thing worse!

There is (IMHO) a "Disconnect" between what the administration says it wants to do (build an "ownership society" and "save" Social Security) and what it actually wants to do. Actually, what the administration wants is to gradually phase out SS as we know it and privatize it into a "401K" -type system much like most current pension plans today.

Step back for just a moment and note that "guaranteed" pension plans have just about disappeared over the last 10 or 15 years, replaced by "defined contribution" plans that guarantee nothing except that money is contributed to them. Now, the government wants to do the same thing with Social Security! What that means is that if the stock market happens to crash just as it is time for you to retire, (remember 9-1-1?) you will be "double screwed". Your only alternative will be to stay in the job market.

It is important to remember that Social Security is a safety net, not a retirement plan. We don't let people starve in the streets here in the US of A, so SS is there to ensure that your neighbor does not become so destitute that you have to ante-up to feed him. It protects you as much as it protects him. It must be a guaranteed minimum income!

All the above said, I am actually in favor of about a 10% private account, with the lion's share of SS remaining much as it exists today however; 1) I don't know how you would ever pay for it and, 2) I don't think that is what Bush really wants.


The whole thing could be immediately "fixed" by increasing the maximum amount that SS is paid upon. Additionally, there is nothing precluding you from making your own private tax free investments in addition to SS. That's what IRAs are for.

True and Truer.

Vaughn