Monday, March 14, 2005

All the king's spin

Fred Barnes of the Weekly Standard writes the following:

"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."

Let me repeat: "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." Right, and every retiree who opts for these accounts is opting out of paying that money into the system, thus cutting the benefits of some other worker! This is an absolutely bizarre, non-sensical, carnival shell-game claim by Barnes. Private accounts do NOTHING to help the solvency of Social Security, unless you count "making slightly more with a well-invested account and having your benefits cut as well" to be "helping the solvency.

2 Comments:

At 10:49 AM, Anonymous Anonymous said...

So...I'm no expert on this. I'm barely conversant, probably, but if I make more from my privately-invested retirement money than I do from whatever the gov't gives me, shouldn't I go with private accounts? I mean, for each individual, isn't investing better than having more taken out of your paycheck?

As far as SS in general, I know that it is supposedly 'running out of money', but if we assume that the government will cover it's debt, then how will my private investment cut anyone's benefits? I mean.... I can only take out what I put in (plus interest), right?

I don't get it.

 
At 2:23 PM, Blogger RedHurt said...

yeah - that's what I'm thinking too. I'm not really taking away from someone else's benefits/SS since I'm not going to take out of it myself. I'm not taking their SS - I'm taking mine, and I'm investing it instead.

 

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