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Wednesday, February 09, 2005

Democrats: Good Enough For Us, Not You

Private Account Myths
National Review Online
By Cesar Conda

In the Democratic response to President Bush’s call to make Social Security a better deal for younger workers through voluntary personal retirement accounts, Senate Democratic Leader Harry Reid likened the plan to a risky game of “roulette.” New York Times columnist Paul Krugman called it a “system in which workers engage in speculation that no financial advisor would recommend.” In opposing personal accounts, the American Association of Retired Persons (AARP) launched national ads stating: “Winners and losers are stock market terms. Do you really want them to become retirement terms?”...

...The truth of the matter is that many Democratic politicians have expressed great confidence in Wall Street through their own personal investment decisions. For example, Massachusetts Sen. John F. Kerry’s most recent public financial disclosure includes 70 pages of investments in stocks, mutual funds, municipal bonds, and other private investment vehicles. House Democratic Leader Nancy Pelosi invests in several common stocks, including approximately $300,000 in Amazon.com. Senator Reid has put his hard-earned money in a number of publicly traded blue-chip companies as well as a variety of municipal-bond funds — a good mix of diversified and stable investments.

Interestingly, while warning of the dangers of investing in the stock market, the AARP’s website promotes the AARP-Scudder Investment Program, which offers senior citizens a wide selection of 38 low-cost mutual funds, including “money market funds, bond funds, U.S. large cap funds, U.S. small cap funds, and international funds...

...Under President Bush’s Social Security reform plan, the management and investment options of personal accounts would be strikingly similar to those of the Thrift Savings Plan (TSP) — the retirement program available to Sen. Reid and Rep. Pelosi, their congressional staffs, and millions of federal government workers.

Like the TSP, personal retirement accounts would be invested in a conservative mix of broadly diversified bond and stock funds. In addition to these TSP-like investments, the Bush personal-account plan would offer a “life-cycle portfolio” that would reduce the level of market risk as people approach retirement by automatically allocating funds toward safe and secure government bonds.

A centralized administrative structure would minimize compliance costs for employers. Further, the TSP-style personal accounts would be low-cost, thereby preventing funds from being consumed by hidden fees. According to the Social Security administration actuaries, the administrative costs of the personal accounts would be only 30 basis points, compared to 88 to 125 basis points for bond and stock mutual funds.

In addition, under the Bush plan, retirement funds would be paid out over time through some combination of annuities and phased withdrawals pegged to life expectancy. This would protect retirees from emptying their retirement nest eggs all at once.

The Thrift Savings Plan has had a demonstrated track record of safety and soundness, while producing healthy annual rates of returns for 3.4 million federal workers. For example, the TSP’s most conservative fund, the bond index fund, has produced a 4.58 percent real annual rate of return, more than double the paltry 1 to 2 percent rate of return under Social Security...”

I know I quoted a lot from this article, but I wanted to point out just what it is the Democrats are doing. They have virtually the same type of set up going on for their own SS accounts that Bush is trying to put into place for all of us, but they don't believe we should have the option. Democrats think everyone but the elite are idiots, too dumb to tie their own shoes without someone to tell them how. If people want to keep their money in the normal government accounts, THEY CAN. What the hell is wrong with allowing people the option to invest a portion of THEIR TAX DOLLARS in private accounts, with the VERY HIGH possibility of making more of a return than they would had they left it in the government account?


 
conservativerebel.blogspot.com: Democrats: Good Enough For Us, Not You <body>

conservativerebel.blogspot.com

Wednesday, February 09, 2005

Democrats: Good Enough For Us, Not You

Private Account Myths
National Review Online
By Cesar Conda

In the Democratic response to President Bush’s call to make Social Security a better deal for younger workers through voluntary personal retirement accounts, Senate Democratic Leader Harry Reid likened the plan to a risky game of “roulette.” New York Times columnist Paul Krugman called it a “system in which workers engage in speculation that no financial advisor would recommend.” In opposing personal accounts, the American Association of Retired Persons (AARP) launched national ads stating: “Winners and losers are stock market terms. Do you really want them to become retirement terms?”...

...The truth of the matter is that many Democratic politicians have expressed great confidence in Wall Street through their own personal investment decisions. For example, Massachusetts Sen. John F. Kerry’s most recent public financial disclosure includes 70 pages of investments in stocks, mutual funds, municipal bonds, and other private investment vehicles. House Democratic Leader Nancy Pelosi invests in several common stocks, including approximately $300,000 in Amazon.com. Senator Reid has put his hard-earned money in a number of publicly traded blue-chip companies as well as a variety of municipal-bond funds — a good mix of diversified and stable investments.

Interestingly, while warning of the dangers of investing in the stock market, the AARP’s website promotes the AARP-Scudder Investment Program, which offers senior citizens a wide selection of 38 low-cost mutual funds, including “money market funds, bond funds, U.S. large cap funds, U.S. small cap funds, and international funds...

...Under President Bush’s Social Security reform plan, the management and investment options of personal accounts would be strikingly similar to those of the Thrift Savings Plan (TSP) — the retirement program available to Sen. Reid and Rep. Pelosi, their congressional staffs, and millions of federal government workers.

Like the TSP, personal retirement accounts would be invested in a conservative mix of broadly diversified bond and stock funds. In addition to these TSP-like investments, the Bush personal-account plan would offer a “life-cycle portfolio” that would reduce the level of market risk as people approach retirement by automatically allocating funds toward safe and secure government bonds.

A centralized administrative structure would minimize compliance costs for employers. Further, the TSP-style personal accounts would be low-cost, thereby preventing funds from being consumed by hidden fees. According to the Social Security administration actuaries, the administrative costs of the personal accounts would be only 30 basis points, compared to 88 to 125 basis points for bond and stock mutual funds.

In addition, under the Bush plan, retirement funds would be paid out over time through some combination of annuities and phased withdrawals pegged to life expectancy. This would protect retirees from emptying their retirement nest eggs all at once.

The Thrift Savings Plan has had a demonstrated track record of safety and soundness, while producing healthy annual rates of returns for 3.4 million federal workers. For example, the TSP’s most conservative fund, the bond index fund, has produced a 4.58 percent real annual rate of return, more than double the paltry 1 to 2 percent rate of return under Social Security...”

I know I quoted a lot from this article, but I wanted to point out just what it is the Democrats are doing. They have virtually the same type of set up going on for their own SS accounts that Bush is trying to put into place for all of us, but they don't believe we should have the option. Democrats think everyone but the elite are idiots, too dumb to tie their own shoes without someone to tell them how. If people want to keep their money in the normal government accounts, THEY CAN. What the hell is wrong with allowing people the option to invest a portion of THEIR TAX DOLLARS in private accounts, with the VERY HIGH possibility of making more of a return than they would had they left it in the government account?