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Tuesday, March 15, 2005

Fred Barnes Weighs in on Social Security

Let 'er Rip

Weekly Standard

...Let's clear up a couple of myths about the creation of individual accounts. The first is that accounts would play no role in making the system solvent for the remainder of the 21st century. Not true. For retirees with individual accounts, a portion of their retirement income would come from their investments in financial markets, not from payroll taxes paid by workers. This would not only contribute to solvency, it also would eventually allow for a cut in payroll taxes. True, other measures would be needed to ensure solvency. But absent individual accounts, the curbs on benefit growth or spikes in taxes would be greater.

Another canard is that personal accounts are the same as privatization. Not quite. Full privatization would let workers invest all their payroll taxes in whatever they chose. As envisioned by Bush and other reformers, the federal government would control how much a worker puts in an individual account, the range of investment options, and when the money could be withdrawn. That's hardly a libertarian approach. Oh, yes, there's one more phony charge: that picking what to invest in will be too complicated for many people. Nonsense. People choose car insurance, they decide among lottery selections, they weigh cable against satellite TV, they determine where to put their 401(k) or IRA money. Investment accounts will be no more difficult.

There's a new Democratic line of attack. Democrats charge breathlessly that Bush has been advocating individual accounts since he ran for Congress in 1978 and predicted Social Security would become insolvent by 1988 without accounts. Actually, it did become insolvent in 1983. The Washington Times checked what would have happened if individual accounts, invested in market index funds, had been established in 1978. The Dow since then has soared from 820 to nearly 11,000, the S&P 500 from 96 to more than 1,220, and Nasdaq from 118 to roughly 2,050. Retirees would be living in high style. So, Mr. President, let 'er rip on individual accounts. You've got nothing to lose and momentous reform and a booming Republican party to gain.
The argument that private accounts won't help fix Social Security's solvency problem at all is just plain untrue. Hence the reason it's a Democratic talking point. As Barnes points out, a portion of the Social Security income would come from the free market investments, and not from tax payers, and that would help even things out a lot over time.

Other things will be needed to fix the program through the century, but private accounts MUST be part of the equation, otherwise it's a joke to even try and call it a reform. I don't care what the wackos over in DC have to do to make it work, all I want is to be able to invest part of my Social Security fund privately, and be able to pass that investment on to my children when I pass away. This seems like something most Americans would want, and despite the current poll numbers, private accounts WILL become a reality in America sooner or later. The sooner we get them started, the more money I will be able to collect off my private investment returns. The GOP leaders need to figure out some way to make this thing work, and SOON.


 
conservativerebel.blogspot.com: Fred Barnes Weighs in on Social Security <body>

conservativerebel.blogspot.com

Tuesday, March 15, 2005

Fred Barnes Weighs in on Social Security

Let 'er Rip

Weekly Standard

...Let's clear up a couple of myths about the creation of individual accounts. The first is that accounts would play no role in making the system solvent for the remainder of the 21st century. Not true. For retirees with individual accounts, a portion of their retirement income would come from their investments in financial markets, not from payroll taxes paid by workers. This would not only contribute to solvency, it also would eventually allow for a cut in payroll taxes. True, other measures would be needed to ensure solvency. But absent individual accounts, the curbs on benefit growth or spikes in taxes would be greater.

Another canard is that personal accounts are the same as privatization. Not quite. Full privatization would let workers invest all their payroll taxes in whatever they chose. As envisioned by Bush and other reformers, the federal government would control how much a worker puts in an individual account, the range of investment options, and when the money could be withdrawn. That's hardly a libertarian approach. Oh, yes, there's one more phony charge: that picking what to invest in will be too complicated for many people. Nonsense. People choose car insurance, they decide among lottery selections, they weigh cable against satellite TV, they determine where to put their 401(k) or IRA money. Investment accounts will be no more difficult.

There's a new Democratic line of attack. Democrats charge breathlessly that Bush has been advocating individual accounts since he ran for Congress in 1978 and predicted Social Security would become insolvent by 1988 without accounts. Actually, it did become insolvent in 1983. The Washington Times checked what would have happened if individual accounts, invested in market index funds, had been established in 1978. The Dow since then has soared from 820 to nearly 11,000, the S&P 500 from 96 to more than 1,220, and Nasdaq from 118 to roughly 2,050. Retirees would be living in high style. So, Mr. President, let 'er rip on individual accounts. You've got nothing to lose and momentous reform and a booming Republican party to gain.
The argument that private accounts won't help fix Social Security's solvency problem at all is just plain untrue. Hence the reason it's a Democratic talking point. As Barnes points out, a portion of the Social Security income would come from the free market investments, and not from tax payers, and that would help even things out a lot over time.

Other things will be needed to fix the program through the century, but private accounts MUST be part of the equation, otherwise it's a joke to even try and call it a reform. I don't care what the wackos over in DC have to do to make it work, all I want is to be able to invest part of my Social Security fund privately, and be able to pass that investment on to my children when I pass away. This seems like something most Americans would want, and despite the current poll numbers, private accounts WILL become a reality in America sooner or later. The sooner we get them started, the more money I will be able to collect off my private investment returns. The GOP leaders need to figure out some way to make this thing work, and SOON.