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I've had private accounts, and this is not it

February 28th, 2005 (08:31 pm)
frustrated

current mood: frustrated

One of the strange things about W.'s "private accounts" proposal is that those accounts are not private at all. The money in your account is not yours; you can't touch it at all until retirement (unlike an IRA or 401(k)), and, at retirement, you're required to use it to purchase a qualifying annuity, one that will guarantee you enough Social Security income to stay above the poverty line. (Source: FactCheck.org.) Oh, and, although W. says, "We'll make sure that your earnings are not eaten up by hidden Wall Street fees.", the government will be charging fees, too. Those fees, unlike Wall Street fees, will not be subject to competition, nor to the usual consumer-protection laws. Want to bet they won't go up over the years?

And, of course, that "We'll make sure..." means that the government will make sure only qualified funds are made available through Social Security. Come to that, once a fund or two dipped a bit, Congress would probably put through regulations to ration out SS investments, to make sure we don't have too much reliance on any one fund staying solvent. Oh, gee, look at that, it just so happens that the amount of investment a financial company's funds are rationed each year is proportional to their contributions to Republican coffers the year before. Imagine that.

Private, my ass. If W. really wanted private retirement accounts, all he'd need to do would be to let us put money into our IRAs instead of into Social Security. But then, of course, he wouldn't be in control. This is just a way to take our money and use it to make Wall Street dependent on a government gravy train.

Comments

Posted by: metahacker (metahacker)
Posted at: March 1st, 2005 05:18 am (UTC)
doyouhas

Don't forget that when you go to take it out, you have to basically take a loan (with yearly disbursement) against what you've put in, rather than actually being able to get your money back. As I understand it, if you die early, the gov't gets to keep the difference...this based on some mumblings I heard on NPR, so I don't have a good source.

Overall, this is an incredibly damaging way to make a small number of people very rich. It's astonishing in its boldness, badness, and thoroughness.

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