Jack Dawson said:
Can any of you liberals explain to me why it is in such great shape after years of saying it wasn't?
Scare tactics. To be perfectly honest, both sides use horror stories about the social security to spook the voters. I freely admit that the Dems have done it in the past, and now Bush is doing it.
This so-called crisis is a scam. Social Security is easily one of the most successful programs in the history of this country. If NOTHING is done, even the most conservative estimates indicate it will continue to pay 100% of benefits for the next 30-40 years. At that point, again if NOTHING is done, it will BEGIN to dip into the Social Security Trust Fund and will probably only be able to pay about 80% of the benefits promised.
Bush is proposing a total overhaul of the system which it completely unnecessary and reckless. The feds will have to borrow trillions just to set up these personal accounts which will be administered by the Wall Street crowd. It will be the largest infusion of public money into the private section EVER. Small wonder the WSJ endorses the idea.
The problem lies in the administration of the accounts. Currently, there is one big-ass account (the Social Security Trust Fund) and its administrative overhead costs are very small (around 3% of the total amount paid in). If every man, woman, and child in the US gets their very own individual account, the overhead costs for administration of those accounts balloons to 25-30% of the total amount paid in. The increased cost is an unavoidable consequence of handling millions of accounts instead of just one account, and that cost will easily offset any alleged benefits gained from being able to choose from a handful of mutual funds.
In short, Bush is proposing to remove a solid investment (albeit a modest one) in exchange for your choice of a less solid (but POSSIBLY more lucrative) investment. The catch is that regardless of which plan you take, the overhead costs (which go to Wall Street profits) will eat up even more of your investment than if we had left everything in one big, boring, account.
The best description I've heard of the current 'crisis' is to think of social security as car. Currently, it has a flat tire. Bush wants us to buy a new car. The Dems are recommending inflating the tire.
Social Security could use a tweak, but it does need an overhaul.