please read this information and then tell us why you think it is a good or bad thing.

With the new "privatization tax," the Republicans are going to give with one hand and take away with the other. Their plan will allow individuals to take money from the Social Security Trust Fund and put it into private accounts. But to recoup this money and lost interest for the Trust Fund, the Republicans will issue the new privatization tax, which will eliminate benefits by up to 70 percent or more.

"The notion of private accounts in Social Security mentioned by the President as part of a reform package is not all that it seems," Baucus said. "At the same time that the private accounts are adding to retirees' income, much, if not of all of this additional income is being offset dollar for dollar through reductions in their Social Security benefits. Moreover, if the investments in retirees' private accounts do poorly, the retirees' could end up worse off financially than they would have without the private accounts at all."

Examples of how the privatization tax will work:

- If an individual's account earns the average rate of return (4.6 percent above inflation), they are still going to have to give back 70 percent of the account.

- If an individual's account earns 3 percent above inflation, which is the risk-adjusted rate of return

assumed by CBO, they would have to give back your entire earnings.

How the Private Accounts Would Work

When fully phased in, workers who chose to participate in the private accounts would have 4 percent of their wages diverted into the accounts. At retirement, workers with private accounts would be subject to a reduction in their Social Security benefits equivalent to the amount that would be in their account if the payroll taxes diverted to the account had earned interest at the same rate as the rate paid on Treasury bonds.

If a worker earned the average rate of return assumed by the Administration (4.6 percent above inflation on a mixed stock-bond portfolio), the privatization tax would recapture an amount equal to 70 percent of the account. 1 If a worker earned a 3 percent rate of return, after inflation, the privatization tax would recapture an amount equal to 100 percent of his account. 1 If a worker earned only a 1.5 percent rate of return, the privatization tax would still be based on a 3 percent rate of return. That is, the reduction in the worker's Social Security benefit would exceed the amount in the worker's private account, producing an effective tax rate of 139 percent. The worker would have less combined income (from the private account plus the Social Security) than if the worker had not chosen to have an account.

Shameful idea to let people manage their own money and live by the consequences. So long personal responsibility. So long sacrifice. Just let big government carry your load. My opinion? Abolish big government. People can take care of themselves.

Rick,

Please provide a link to this info, I have read something similar to this and a few articles that debunk it.

I am still researching this, so I don't know if it will be good or bad.

Thanks,

Mike

Mo'sMan

you missed the point.

Yo Rick:

It's a "BAD THING", you posted this article.

1. Once again a "copy and post" without saying what liberal website you stole it from.

2. Who is this "baucus" fellow, was he the one who played Mr. Magoo on tv?

3. As everyone knows as soon as they read your post header, if it mentions President Bush it's got to be a put down.

One last question, how long will it take for adroomi to come to your aid and tell us you are actually trying to make us think?

LMAO

JonR

Unfortunately what JonR said seems to be the case with Rickamaven lately!

Charlie

Rick, miluns asked an honest question on this one?? I would also like to see the link because I've posted a few topics very simular to yours above for discussion and I haven't seen this side of the issue??? where a person is going to have to payback on their returns???

I'll be waiting like miluns for the link

TIA

Hog

Hog, ya better pack a lunch it is gonna be a long wait

Mr. Magoo was played by that late Jim Backus, who also played Thurston Howell, the millionaire on "Gilligan's Island". Baucus is one of the voices Rick hears when he takes off his tinfoil hat.

b

He alludes to workers "taking money from the Trust Fund."

NOT TRUE! the money to set up the accounts would come from payroll contributions which OTHERWISE would be put into the "Trust Fund"... which doesn't pay benefits anyway. The Trust Fund doesn't even exist. Payroll contributions go into and benefits are paid out from the general fund... which is why the system is in crisis and needs to be fixed in the first place! Why, oh why is it that big gumminters always wail about a lessening of revenue as a "cost", when it ain't the gummint's money..?. it still belongs to the people who earn it.

As far as "privatization tax" is concerned, this is the first I've heard of it. I would be very interested in some substantiation if there is any.

b

Hey Hog,

Here's the link.

democrats.senate.gov/~dpc/press/05/2005209725.html

Notice the first word of the adddress:

"democrats"

Gee Rick, how original. At least when I cut and paste, I give credit to the source.

HS

LMAO!!! Thanks Herf...

Hog

Lets break this down??

"The promise of 'ownership' under the President's privatization plan is an empty one," said Corzine. "In fact, under the administration's proposal, the government would effectively lend you money and then ask you to pay it back with interest. That's not ownership and it sure doesn't sound like much of a nest egg to me."

I did not read or see anywhere that the Government was going to lend you money???

It is your money and like a 401K plan you invest it out of YOUR payroll into a market of YOUR choice.. Your in control of these funds?? now where are these senators pulling this information from??

"The president's proposal to cut guaranteed benefits in favor of individual bets on the market strikes at the very core of Social Security's promise - that it's a rock solid guarantee which will be there when you need it the most."

He never said anything about cutting the guaranteed benefits for the one's already in the SS System?? it will remain intact... this is an Option for others to break away from the bogged down system... and levy the SS System at where it is at.. allowing people who are just starting into the life a chance to protect their own investments... rather then having a defunked System promiss something that may not be there in 20 yrs...

"Those who disagree with Social Security's promise have a right to call for the program's repeal. But they shouldn't pretend that privatization promises security for America's seniors. It doesn't."

Rick when are you going to learn how to read between the lines on issues?? this is a scare tactic they are using to try and sway especially the seniors into thinking they are going to be left out in the cold and their SS benefits are going to be cut by this new plan!!!! it worked on you LOL Gulable Rick!!!

Hog

Isn't it amazing how Dems can twist terms? Your money withheld from the government's clutches, becomes a "cost"... and them simply not giving you a handout becomes a "tax"...

`When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.' --Lewis Carroll, "Through The Looking Glass"

the Dems do not want to see their Money Pot go away!!!!

Hog

The most significant problem with the privatization plan is that the Fed will have to set up an agency, much like the FDIC, to insure against investment and stock fraud perpetrated against individuals who aren't investment/market savy. The most recent statistics for U.S. individual saving rates places the U.S among the lowest in the industrial world. The average American saves less than 2.1% of his gross earnings and has credit card debt exceeding $8000.00.

The cost of the safety net to protect those who are duped will cost the taxpayer heavily. When retirement comes, what happens to the guy who worked hard but invested his former FICA dollars in stocks like Enron? If SS is his only pension, and it's reduced by 30%, can he live on $770 a month? Can you?

We live in a humane nation, where people do help others in need, and expect the government to assist as well. It's too easy to say, they made investment mistakes, now they have to live with them. How many have never bought a car or appliance, had it go wrong, and said to themselves, "Too bad, I made a mistake, I guess I'll have to take a major loss on my own." No, you head back to the vendor who sold you and try to get some relief.

I retired at 55, knowing that Social Security would be a bonus above my personal portfolio when I decided to take my Social Security. I worked very hard at knowing how to invest to make this possible. I'd venture a guess that most who are reading this post don't even have a brokerage account, in house or on line.

The plan would not simply let a worker take the money and go play with it, as Steve implies... what is being proposed is similar to the Federal Employees' Retirement System's "Thrift Savings Plan", where an employee selects among 5 funds to place money in, on a voluntary basis, with partial government matching. The funds are centrally managed, and mirror a number of existing private funds and indices that have consistently done well, over time. I was skeptical back in the mid-'80's, when I came under this plan... but after a number of years of participation, I have to say it's been VERY VERY good to me... better, and MUCH more VISIBLE (I know to the PENNY what my account is worth day-to-day) than the vague "don't worry, we'll take good care of our seniors" we're promised by the present system. My only regret is that I didn't catch on earlier and invest more money in it early in my career when I wasn't contributing the allowable maximum. Do not fall victim to the scare tactics! No one who is currently retired, or within a few years of it, will see a reduction in their retirement income because of this DESPERATELY needed overhaul. Younger worker will make out far better than under SSA as it exists today. I'm all for it. 100%. I'm 56 years old, and will retire in the next five to seven.

Just my $.02 worth on this controversial issue, which is being opposed by progressive liberals, including the national executive leadership of AARP, who spout scary stories to make old folks think their check will evaporate, out of the failed belief that government will take better care of your money than you can or will.

b

I think SteveR hit it on the head. Be responsible with your own money and have the disipline to save Don't rely on big government to support your full retirement. I for one thinks its a good idea especially for the young people in their 20's to think about what retirement will bring.

Being a more or less newbie here I have been lurking and watching the forum. I have noticed that Rickraven sure opens a lot of "discussin"

oops I ment Rickamaven ^^^^^

I contribute the maximum into TSP, and if you take the time to read the investing strategies they suggest, they tell you that you invest in funds to match your risk tolerance, and as you near your projected retirement date, to migrate your investments into fixed income and government security funds to limit your exposure! currently, I invest 50% into fixed income/govt securities, 15% into the small cap fund, 15% into the overseas market fund, and 20% in the large cap (Blue chip) fund. this limits my exposure, increases my potential of return, and as I get closer to retirement, I can no only shift what I invest every payday, but MOVE money from the riskier funds into the safer ones, that way if there's a crash right before I retire, my plans are not wrecked! They just opened this option up for the military three or four years ago, and I contribute thje maximum they allow from my monthly pay. I feel this is what I have to do to make up for as late as I started. If I had the option of investing some of what I pay into SS, I'd jump on it, because4 when I was in my twenties, I had no faith that SS would still be solvent when my turn came. I STILL don't beleive it! Before you blast the current administration for this, consider the Democratically controlled Congress that used the SS Trust Fund as their private pork-barrel piggy bank for forty years before the Reps took over the House and Senate! They used the SS Trust Fund to pay for social programs to buy votes, and now they wanty to blame the Republicans that the till is almost empty!