social insecurity

Social Security reform has been the hot topic since the presidentﾒs inauguration, especially private accounts. Some democrats claiming there's no problem, some republicans crying death and destruction if we don't do anything. Those are of course just the extremists. Most people acknowledge that if do nothing at all social security will eventually collapse, whether that happens in 2018 or 2070 is up for argument, I personally think that day is closer to around 2045 (AARP, FEE, Bush). The president in his fifth State of the Union Address, while citing other possible remedies, advocated private accounts as a way to help social security and promote the ownership society he seems to advocate. There are numerous problems around the subject as I see it. Currently 12.4% of a worker's salary (half from the worker, half from the employer), up to $90,000 in 2005 goes towards social security. First, according to most news reports and people I've talked to only 4% of that 12.4% would be diverted into private accounts when in reality Bush is proposing that 4% out of 12.4% would be diverted (Bush). READ: 4 percentage points of 12.4%. This is the difference between $74 a year to $1000 a year. Second, this will actually exacerbate the problem of the upcoming shortfall by diverting funds going into social security somewhere else, around 32%. In doing this potentially trillions of dollars will need to be pulled out of the government's budget in transition, this of course depends entirely on the rate of adoption and how fast we get to the 4%. The reason for this transition cost is because, as the president said, those 55 or older will not have benefit cuts, the rest of us should expect at least somewhere around 32% cuts, which is fine because the private accounts cover it. By extension then private accounts actually do nothing to shore up social security but in fact can create a further burden on the government. Thirdly, as far as interest on the money that goes into I have huge misgivings on allowing people to move funds around at their whim like they would on the stock market, even if it is in conservative funds. You add in allowing brokerage firms to handle this and you run into costs. Assuming the funds in my private account does better than they would in social security, how much of that extra money will be eaten away by the costs of having firms handle my account? Of course thankfully congress has the foresight to at least discuss real solutions to keeping social security solvent. (Parsing the State of the Union)

I've been told that I can eat all my rants about the war in Iraq and that Bush is being proven right with the elections, and collapse of the Lebanese government, and the talk that Egypt will hold some elections. All I gotta say is mad props that at least something is going right for once and that this does nothing to change that the American people were misled about the original reasons to go to war and that the administration should be held liable for the utter lack of preparation and the horrible handling of the war. So good job for not completely screwing it up so that change can happen even despite the things he has screwed up.