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Not social, not secure
2005.04.19 — Government | Business | Jobs | Retirement | by BB Rodriguez
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Hey, who doesn't want to be a millionaire, George? [Tysto exclusive photo by Jacob Bennitt] |
It looks like George W Bush's plan to privatize Social Security (or add private investment options to it, depending on who you talk to) is dying a well-deserved death. It wasn't well thought-out. It wasn't economically feasible. And it pandered to economic conservatives that long ago threw in the towel and conceded this fight.
Social Security was developed by the Roosevelt administration because people weren't saving for the future and millions were ending up poor in their final years. Here was a man of big ideas, the heart to know they were right, and the intellect to implement them in successfully.
Fun fact: FDR also beat the Japs and the Nazis (no offense to our Japanese friends or our Nazi friends).
It is a phenomenally successul program, keeping little old ladies from starving or worse... selling themselves on the streets. Is that what you want to go back to? White-haired dime-a-dance Daisys hiking up a hemline on every street corner? I think not.
Is that what you want to go back to? White-haired dime-a-dance Daisys hiking up a hemline on every street corner? |
Now, investing in the stock market is great. I invest in it myself. I'm in it up to my curly blond pigtails. But that doesn't mean I want my Social Security money going there too. To the contrary, I want my Social Security money to be secure. And I want it be there for other people too, making it, you know, social.
I'd love to see a 401(k)/403(b)-style plan made available—and practically mandatory—for every American. It should be an opt-out type of plan, in which you must contribute at least a small portion of your salary in a regulated fund or specify that you don't want to participate. But you should also be able to join at any time and begin contributing immediately. And it shouldn't be easy to opt out. Maybe you should have to go to the DMV to do it.
And it shouldn't be easy to opt out. Maybe you should have to go to the DMV to do it. |
This kind of plan would allow many millions of Americans to invest for their retirement with small amounts of money that they won't miss from their paychecks. Ideally, it would be offset at first by a lowering of other taxes, or else it would be phased in gradually.
The trick here is that any mandatory (or near-mandatory) saving plan of this sort would instantly involve many billions upon billions of dollars—the nest egg of the one of the biggest, richest nations on earth. The federal government would have to decide what kind of funds you could invest in. Should it okay pretty much every fund and risk millions of people putting their money in known dogs with lousy track records and high fees? Should it restrict it to just a handful of lucky ducks that would suddenly bloat to ultra-super-mega-funds subject to stupendous mismanagement risk and political pressure? Is there a happy medium?
That sort of thing is doable, but not by this president. |
Perhaps we could erect a kind of quasi-private company that would organize and categorize fund offerings for hundreds of millions of Americans, swapping funds regularly to avoid playing favorites or over-bloating too many. This would be pretty much like Freddie Mac and Fannie Mae. I vote for it to be called the Federal Underwriting Investment Organization for the Wealth of the Nation or "Funkie Town" for short.
That sort of thing is doable, but not by this president. Not by a man who is not intellectually curious. Not by a man who legislates ideology instead of ideas.
We need another Franklin Roosevelt for that.
f e e d b a c k
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