Burnt Orange Report

Meanwhile, I think the CBO just extended the Social Security trust fund "starts paying out more than it's taking in" date by another 3-4 years.

Plus, maybe SS would do a little better if it weren't raided every year to make a monumentally shitty deficit situation seem marginally less monumentally shitty.

You could start investing in foreign currencies, like The Iraqi Dinar!

The notion that accounts could be invested overseas to improve the rate of return is not a serious argument for privatization.

What would be different about overseas investing for a SS account? Anyone can invest overseas today--relatively poor data, no SEC protection against fraudy reporting (not that it's been a guarantee here, considering Enron et al, but it does provide a degree of transparency), currency rate risks, risk of revolution or war, maybe much higher brokerage fees...

For example: Mexican banks for many years paid superior interest on deposits, and the Peso was rock-solid. Until suddenly it wasn't any more, and Americans who had money in those accounts got back pennies on the dollar.

And now we'd be talking about TRILLIONS of dollars. You think that sharks only live on Wall Street? Imagine the feast that foreign brokers and companies and governments would have at the expense of American account holders.

It's hard to imagine even Bush proposing this with a straight face.

I agree with Demo Memo. Making our retiree's welfare dependent on the economies of foreign countries is not a wise political move. Krugman's point is a very good one - the economic gains necessary to make privitization work also put the current system in the black. It just doesn't enrich W's wealthy core support base. Too bad.

I'm still confused about the rationale for the whole privatization thing. Lots of people today CAN invest retirement funds in stocks-- IRAs, 401k plans, 403b plans, etc. Why not just expand the law, guaranteeing that every worker can put pre-tax wages in an IRA, just like before? Or is that too much freedom?

JoJo, the big reason for the push to privatize has a lot to do with how much Republicans hate FDR and the New Deal liberalism of the past 60 years. There's a really good article in Slate about it.

What people don't understand is that these private accounts are going to have to be strictly regulated. The ownership society is going to require a big govt. beauracracy to invest those accounts for you so that they are diversified and lower risk. People won't really get a say in how their money is used or where it is invested, otherewise we could end up with a system where administrative fees are half of the entire account, like in the UK.

We could simply make it easier for people to invest in IRAs and the like, but that would be a smart thing to do with our money. Republicans never do the smart thing with money. These people don't realize that taking money out of SS means there is less money in the system. It breaks my heart to explain to my 7-year-old niece that the president can't add or subtract like she can.