One of the wonderful things about technology (e.g. Backyard Blog) is that it helps to link up younger people with modern issues. Chances are many of us readers and writers would be less inclined to pay attention to some of today’s hot-button issues if we were not provided this arena of debate.
Why am I talking about this? Because this avenue (blogging) is primarily aimed at us, the younger generation of twenty-somethings who will shape the future of public policy in this nation. Indeed, maybe blogging—among other technological innovations—will help us get a head start on considering such important issues when it’s our turn to lead.
What I’m getting at is that there are several issues this younger generation should pay absolute attention to. We’ve talked about the two most prevalent issues this year -- national security and the domestic economy. But there’s another issue that needs to be addressed on the national scale.
Social Security.
John Kerry’s assumptions about “privatizing” Social Security cannot go without challenge. Senator Kerry is taking the party line against the privatization of Social Security by scaring seniors into thinking they will be hung out to dry if Bush’s plan comes to fruition. That’s hogwash but I want to focus on one claim he made and leave the others for a later discussion.
Senator Kerry claimed that if Bush’s Social Security plan goes into effect it will be a financial windfall for Wall Street. He claims that Wall Street fatcats will stand to earn $940 billion over the next 25 years if America’s future workers (you and me) place our money into personal retirement accounts managed by private mutual fund firms.
What the Senator does not say is that the study he’s citing also says that the $940 billion over 25 years is merely the administrative fee paid by us to private money managers to make us money (something everyone does for a mutual fund). The study used an administrative fee of 0.08% of contributions per year. Seems reasonable.
I, and other people much smarter than me, did the math on this equation. While Wall Street does in fact collect $940 billion over the next 25 years, it also means that just over $117 trillion is pumped into the market and our economy.
While the government currently squanders any Social Security surplus and the rate of return on our Social Security “investment” is staggeringly low, I’d be willing to pay 0.08% of my Social Security withholdings to make the kind of rate of return a private investment account will ensure.
Hmmm…American workers in control of their own financial future with their own money…sounds pretty far-fetched to me. I don’t remember the Constitution saying anything about our Commander-in-Chief also playing Chief Financial Officer with our retirement earnings.
Respond
Back to top