The End of Social Security Reform

While the events today in London were tragic and highlighted distinct problems which I have addressed in numerous posts, the real issue for this post still (I can't believe it either) is Bush's rampant disregard for the foundations of Social Security and the facts underlying it. It is very clear that Social Security has been an enormously supported program as compared with ANY other government program. It is also abundantly clear that the Bush White House has selectively lifted facts from conjured reports that suggest the program is in imminent danger of collapes. This is a lie. The program is on sound financial and actuarial footing until at least 2041 (by the Social Security Administration projections) and at least 2053 by Congressional Budget Office projections. The swindling of Americans to "reform" Social Security will destroy it. The program is an insurance program designed to safeguard retirees and survivor (widows and widowers) and those whose wage-earner is disabled. It is not an investment program. The proponents of private accounts revel in the idealistic assumption that private accounts can generate returns of 7 or 8 percent after inflation when the historical legacy of the stock market demonstrates otherwise. Furthermore, they ignore any risk premium attached to alternative investments from the Social Security program. The U.S. government debt is, as of now, the safest possible investment, the closest investment to the risk-free assets of economists. In addition, investing in private accounts, even if there is a 7 or 8 percent average return, does not account for the generational lottery it creates. The average return on investments in a privatized retirement system depends heavily upon when the recipient was born. If the recipient reaches retirement when the economy is in recession, that person, to put it mildly, is screwed compared to the retiree who retires when the economy is booming. And based on the track record of Republicans, when they are in power, the chances of a strong economy are small.