March 16, 2005


Dirty little secrets (Herman Cain, March 15, 2005, UPI)

There are three dirty little secrets congressional Democrats don't want you to know about Social Security.

First, Democrats want President Bush's proposed personal retirement accounts off the negotiation table because Congress has already spent your money. [...]

The second dirty little secret is that personal retirement accounts do not really constitute privatization. Privatization means someone else owns your account. Bush's Social Security plan provides younger workers their own accounts that they control, not the government.

Members of Congress have their own personal retirement accounts, called the federal Thrift Savings Plan. [...]

The third dirty little secret concerns the personal retirement add-on accounts some Democrats have hinted may bring them to the negotiation table. These add-on accounts would be available to workers on a voluntary basis, but do nothing to solve the solvency crisis or put workers in charge of their own money.

Unlike Bush's proposed investment accounts, add-on accounts would not help the lowest-income workers save for retirement and build wealth for their families. Low-income workers living paycheck-to-paycheck by definition do not have money left over to put into an extra account.

A majority of the U.S. public already has access to thousands of separate add-on accounts in the form of 401(k) and Roth IRA investments. The president's plan allows the poorest among us to join the investing class and reap the benefits of the market and compound interest, which Albert Einstein called "the most powerful force in the universe."

The solution to the last is to adopt Paul O'Neill's accounts but have the Federal government make the contributions for kids living in poverty.

Posted by Orrin Judd at March 16, 2005 6:54 AM

The secret which is most hidden is the number of government workers who are 100% out of the Social Security system and 100% invested in the markets:

"While coverage is compulsory for most types of employment, approximately 6.8 million workers did not have any coverage under Social Security in 1999. The majority of these noncovered workers are in State and local governments or the Federal Government."

Most Federal employees are in and are used as an example of how government workers do pay SS taxes. But millions of NEA, AFSCME, Prison Guard and other government union members are out. These are the very people who lobby to prevent anyone else from diverting even a fraction of their Social Security taxes into a private account.

Important to note that who is in and who is out depends mostly on the state. NEA members will say they pay and many do. But many don't. Those NEA who don't keep quiet.

Posted by: David at March 16, 2005 11:46 AM
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