Democrats & Liberals Archives

Risk-Free Investing

In his State of the Union Address, President Bush laid out a private investment scheme as part of his guiding principles for the future of Social Security. I’d love to see some more details, because the way he describes it, it looks like a scam. If it was an email, I’d be afraid to open it.

First off, as FactCheck.org points out, private accounts do nothing to shore up Social Security. If the goal is to prevent the theoretical temporary 20% gap between the program's income and its benefit payouts fifty years from now, private accounts are not a solution.

That being the case, the hard sell for private accounts must be part of some other agenda that I won't even speculate about here. But I really loved the way President Bush tapped into our basic greediness to justify the need for this totally useless accessory,

As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts.

You have to respect the fact that President Bush doesn't even pretend private accounts will in any way strengthen Social Security - it's all about the lechuga, chica! Maybe he can give away a toaster to the first million workers who open an account, too. I'm just disappointed the marketing campaign doesn't include blondes with big boobies. That would at least make it entertaining.

I guess I'm just not convinced we have a "responsibility" to cater to the greed of young workers with a risky scheme at the expense of trillions of taxpayer dollars. Oh, but that's right. It's not a risk at all, is it?

The goal here is greater security in retirement, so we will set careful guidelines for personal accounts. We will make sure the money can only go into a conservative mix of bonds and stock funds.

Please. My 401(k) was mostly conservative in 2000, and I still got screwed.

We will make sure that your earnings are not eaten up by hidden Wall Street fees.

Really... Wall Street fees don't eat up a single cent of my Social Security money right now. And exactly how is the government going to keep Wall Street from eating up my earnings with fees? Is the government going to manage the accounts? Or will there be fee caps (wouldn't that discourage good brokers from getting involved)? Or are Wall Street investment brokers just going to manage the accounts out of the goodness of their wicked little mercenary hearts?

We will make sure there are good options to protect your investments from sudden market swings on the eve of your retirement.

So after spending trillions of taxpayer dollars on these private accounts, the government is going to insure them too? How much will that cost me?

We will make sure a personal account can't be emptied out all at once, but rather paid out over time, as an addition to traditional Social Security benefits.

What happened to it being "my money?" ;)

Seriously, other than the unnecessary risk and crippling cost, there's only one thing wrong with this totally unnecessary appendage: It's a complete fantasy.

Hey, I've got a wacky idea! How about we just take the trillions of taxpayer dollars Bush wants to spend on these risk-free private investment accounts, and use it to cover any little gap that appears fifty or sixty years from now?

If President Bush is really interested in strengthening Social Security, he'll concentrate on ideas that actually do so - he mentioned several earlier in his address - and forget about peddling this wacky "risk-free" private investment scam.

Posted by American Pundit at February 8, 2005 8:11 AM