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Social Security and Wall Street

September 23, 2008

I begin this post with an opening caveat: The Huffington Post is a liberal (and I mean liberal to the core) site from which this article was gathered. Thus, I intend on completely slaughtering the article, with the full knowledge that the source is biased.

In the article by John Neffinger entitled “Hello? If John McCain Had His Way, That’d Be Our Social Security Money Wall Street is Losing,” Neffinger tries to distinguish the differing policies of the two presidental candidates with the large claim that “the American people” already rejected the idea of Social Security privatization under Bush the Second. Neffinger states:

But as it turned out, we Americans were not about to let our elected representatives turn over our social security taxes to Wall Street financiers to gamble with if it meant losing the guaranteed income that has allowed millions upon millions of American seniors to live out their sunset years with at least a basic measure of dignity.

I’m not even sure where to begin with this statement. Granted, I am not an expert on President Bush’s plan to privatize Social Security, but as I understand, a privatization effort would involve requiring a certain percentage of a worker’s income to go into a safe method of investment (possibly involving the stock market) that would then accumulate interest. This amount, according to Laurence Kotlikoff and Scott Burns in their recent book, The Coming Generational Storm: What You Need to Know about America’s Economic Future and Edgar Browning’s “The Anatomy of Social Security and Medicare” would exceed even the more favorable return-on-investment estimates for social security. They go on to note that this plan for Social Security would even be more profitable during times of economic downturn (they use historic figures for this) because of the method of long run investment. Unfortunately, Neffinger doesn’t realize this:

This is something Americans understand: social security is secure, and the stock market is anything but.

Secure? I’d like to ask Neffinger if he would bet on that. Or rather, if he imagines that with the ever increasing life span of Americans and the ever decreasing birth rates, he will reap his full Social Security rewards and be able to live by Social Security alone in old age.

One Comment leave one →
  1. Penguino permalink
    September 27, 2008 4:11 am

    So…you’ve started reading the Huffington Post? Sounds dangerously liberal.

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