Keep Wall Street out of the retirement business

[Amelia]

Keep Wall Street out of the retirement business

Should we trust these folks with a privatized Social Security system?

COMMENTARY

By Chris Farrell

Business Week

updated 1 hour, 14 minutes ago

Remember the Bush Administration's push to partially privatize Social Security? The privatization advocates warned that insolvency loomed unless dramatic changes were made to the system. Social Security was also labeled a terrible investment. The Bush team's argument: Let people invest a portion of their payroll tax money with the financial wizards of Wall Street in an account reminiscent of a 401(k). Workers would get a higher rate of return on their Social Security money, and the economy would benefit from a higher rate of savings.

"We heard the fear that Social Security will go bankrupt and the solution is privatize it," says Zvi Bodie, a finance professor at Boston University. "Yeah, right! It was a self-serving proposal from industry."

Imagine Bear Stearns, Lehman Brothers, American International Group (AIG), and other titans of finance managing Social Security? The late economist Robert Eisner told me during an interview in the early 1990s that "Social Security was not meant to be a get-rich scheme or a competitor to go-go funds." He was right.

http://www.msnbc.msn.com/id/26793542/

[Dr. Shane]

Bill Clinton also wanted to invest Social Security money in Wall Street. The difference between Clinton's plan and Bush's plan was that Bush let the individual have control over the invested portion of his or her Social Security and Clinton's plan did not. Clinton had to abandon his plan because the liberals in the Democratic party didn't like it and, at the time, he needed them to save him from the Monica scandal.

Wall Street is in the retirement business. In fact, Wall Street does very well with the retirement of millions of people. That is why Clinton and Bush both wanted to invest some SS money in Wall Street. Is it a guaranteed return? No, it is not but nothing is. If the country cannot afford SS when all the baby boomer retire Congress can cut benefits and the baby boomers will be able to do nothing about it. Congress could completely abolish SS if they wanted to. There is nothing guaranteed from Wall Street or from the government.

[jasd]

QR frame:

Watch your retirement funds! The day is coming when they will be the last repository of funds, which, you guessed it! the Govt will, of necessity, RAID!!

Of course, they will give you an IOU - good as gold, thems IOUs. Lemme hear y'all whistle Dixie

(it's posssible that most don't know - that should the bank where you have your IRA experience financial difficulties, which it alone defines - your IRA will be unavailable until you are 72 years old, that's OLD, according to actuarials...)

:-o