A great story about how students are getting engaged in the Social Security debate. You can take action with Rock the Vote on your campus in the fall. Email us at dc(at)rockthevote.com if you want to get involved!
posted by Hans Riemer at 5:58 PM
9 Comments:
According to this article, a John Zogby poll states that 2/3 of people under 30 support private accounts. Looks like RTV is out of touch with the youth.
I commend Hans for finally making a post on Social Security that lives up to the "nonpartisan" title that Rock the Vote claims to go by.
Now if RTV's bloggers actually kept this up, they may gain some credibility. I doubt it's going to happen though.
It's too bad that the only proposals for "private accounts" that are being proposed by neo-con politicians only enlarge the size, scope and power of the federal government. Sigh.
www.socialslavery.com
Noid-
To be fair, at least the President's personal accounts would exist within Social Security. Democrats either oppose personal accounts altogether or want "add on" personal accounts which is a new entitlement program, indeed enlarging the scope of government as you say. The current system itself is going to enlarge the scope of government, too, unless something is done. None of these plans are the ideal solution, but one is better than the rest.
I see that you advocate ending Social Security. It's not going to happen. You might as well get on board with the best possible reform at this point, given that Social Security will become a giant undue burden on all workers of our generation if we don't reform in some way.
If someone proposes to allow us to divert our social security funds to the
1) ***bank account***
2) ***of our choosing **
then I'd support that plan. There are many reasons why this is a far better idea. First, it reduces/eliminates my concerns about equity market corruption. Banks are already quasi-govt institutions so I don't see how they can get any worse then they already are by having our social security funds diverted into accounts there and there should be no reason why any bank would be excluded since there all FDIC insured and that should be all a bank needs to qualify. Bankers already have to kiss govt butt just to get FDIC insurance so I don't think this would extend govt power much if at all.
Additionally I think this would be an easier sell for the american people. People would feel safe with their money diverted to what would essentially be bank CDs.
I'm just curious, would Hans and others on the left be okay with my plan?
You'd start diverting a small amount to your favorite bank, the amount you could divert would grow to 100%. What you'd eventually be doing is shifting from paying for old people, to saving for yourself. When it's at 100%, it will be easy to see how people could easily do the same thing for themselves, making it easy for us to talk about eliminating the "forced" part of the system. This is the only "forced" system that I'd ever support.
www.socialslavery.com
Also, FYI I would generally expect rates on what is essentially about a 30 year CD to be average about 5% over time. No this wouldn't be as good as the stock market, but
1) You should save more in the stock market by yourself as everyone does now anyway.
2) Risk adjusted, it's not *that* big a difference than the 10% in the stock market.
Noid:
You neglect one thing:
As opposed to stocks (which gain in value the more people who buy them), bonds' rate of return decreases as more people get them (supply/demand).
With 300 million people investing in 30 year bonds, the rate of return would go through the floor. I'm not saying this would be a bad thing overall (much more money available for investment), it would reduce the returns sufficiently to make it infeasable.
QUOTE:
As opposed to stocks (which gain in value the more people who buy them), bonds' rate of return decreases as more people get them (supply/demand).
With 300 million people investing in 30 year bonds, the rate of return would go through the floor. I'm not saying this would be a bad thing overall (much more money available for investment), it would reduce the returns sufficiently to make it infeasable.
/QUOTE:
Well, first of all, people wouldn't be buying *treasury* bonds, but rather a sort of bank CD where banks would make some purchase of govt bonds or loan money to businesses (probably a lot more of the second.) But while this would cause rates to go lower in isolation, the federal reserve could raise *its* lending rates to banks to compensate. Indeed it would pretty much have to since people with all kinds of money in bank CD's would demand a stricter inflation policy. And what that would mean is that people would be reaping the benefits of bank loans instead of the govt using inflation to stealthily steal money from everone's paychecks to cover its debts. *We'd* be the beneficiaries instead. But yes, in the event the fed was willing to piss everyone off and inflate their retirement savings away, that is technically a problem. I actually think that creating a direct incentive for everyone to become inflation hawks would be great since right now with everyone in so much debt, everyone has no reason to dislike inflation.
Anyway, good thinking.
Thank you, very interesting!
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