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I guess we should be grateful for 9-11 and Bush’s subsequent wars (plural) on terror (Iraq and Afghanistan).  Maybe they helped us somehow avoid a compassionate conservative agenda that included a radical plan to “rescue” Social Security. Bush’s pet plan sounded risky then. It sounds unconscionable today. If he had had his way, the former President would have had a revamped system that tied even more of our retirement savings to the whims of the stock market. Now, it appears that the unBushified Social Security program may be best thing we have going. Some even see it as a cornerstone to fixing our current pension-less society:

If this sounds a lot like the only functioning part of the current retirement system—Social Security—that’s because it is. If common sense were applied to the pension problem, we would find a way to use the current Social Security system—which already is mandatory, is portable between employers and has an administrative system for payroll deductions and benefits in place—and enrich its benefits. Logic, of course, rarely prevails.

“I don’t think I would be able to convince anybody that the only thing we should have is Social Security,” says Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

But the prospects for a new, mandatory employer-based pension system are, at best, problematic. After all, employers didn’t shed their pension obligations over the past three decades only to take on new ones now. Most proposals on the table are merely attempts to patch the holes in the 401(k) and individual retirement account systems.

The trouble is, the protection these savings plans were supposed to provide has never been enough. Research by Gary Burtless of the Brookings Institution shows, for example, that even if a worker invested 4 percent of earnings over 40 years in a mix of stocks and bonds, the employee would be able to replace only a quarter of his or her pre-retirement earnings in retirement.

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3 Comments

  1. Amen.

  2. Your understanding of economics abysmal. People thought they were doing great with Bernie Madoff as well. Social Security is a ponzy scheme of a much greater magnitude. The beginning “investor” are still being paid but the dumb clucks like me who “volunter” payment will be wiped out.

    What we need is a society that understands that working hard and saving is the best possibility of economic security. It is still not a guarantee though. Investments go up and down and there is always a possibility of losing it all. Thats where indivuidual charity comes in to support those in need.

  3. Hello.
    Very interesting article, i have bookmarked your blog for future referrence. Best regards


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