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Argument Against Private Accounts
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Dom
2005-02-18 12:46:25 EST
http://www.courant.com/news/opinion/op_ed/hc-kelley0218.artfeb18,0,1321331.story?coll=hc-headlines-oped


I Won The Argument Against Private Accounts
By Brenda Kelley

February 18 2005

I finally won an argument with my 31-year-old daughter. And it was an
argument I never thought we'd have.

Recently she told me she found the idea of private Social Security
accounts appealing. I was stunned. I had assumed that my bright,
socially conscious daughter would be on my side of the Social Security
debate - the AARP position against carving out private accounts. But
the idea of investing her own Social Security money seemed logical to
her. She's done well so far in her investments. And the private
accounts proposal includes a protection of current benefits for anyone
55 or older.

Yet, I argued, she certainly wouldn't want to jeopardize a program that
has kept millions out of poverty by supporting "private" accounts.
Investing in private accounts would remove money from the Social
Security trust fund, weakening its solvency even sooner than the 2042
date the fund is projected to be depleted. She agreed, but couldn't see
how AARP, by opposing private accounts, also was fighting for her and
her friends.

I pointed out that she earns more money than I do, she probably has
more in her 401(k) and investments than I do, and her home is worth
more than mine. For someone who is 31, this is very impressive. I had
her attention.

I asked her to consider what would happen if both of us suddenly
experienced a catastrophic illness that left us unable to work. What
would each of us have then?

Even if I had major expenses and couldn't work, I would have a monthly
income from my early-retirement program, low-cost health insurance and,
eventually, a pension from AARP. And I would have Social Security. I
asked what she would have.

She hesitated. "Well I would have my 401(k) and my investments."

But you would need those funds to pay your medical bills and other
expenses if you are unable to work, I said. Silence. Then my daughter
wondered if there would be a government program that would help protect
her from losing everything she saved. She answered her own question:
"Would I have Social Security?"

If you were considered disabled and couldn't work, you could receive
Social Security disability and, after 24 months, you also would be able
to receive Medicare for your health care needs, I explained. Otherwise,
you'd have to exhaust almost all of your savings before you could
receive any help at all.

My daughter is not alone. Fewer than 50 percent of working Americans
have a pension plan available at their workplace, and, of those who do,
most don't have a defined-benefit plan like most of my generation.

You have done well by diversifying your investments, I said. Why would
you want to risk the only secure thing that you have, Social Security?
And your guaranteed Social Security benefit would be smaller if money
is taken out of the Social Security pot to personally invest. Your
taxes would probably increase to help pay off the huge debt that the
government incurred to beef up Social Security drained by the money
diverted for private accounts. And there is no guarantee about how much
your private Social Security account would yield.

Her silence told me I'd won the argument. I'm glad that other
30-somethings agree. A new poll, released in February by AARP, Rock the
Vote and the Joint Center for Political and Economic Studies, found
that nearly 60 percent of 18- to 39-year-olds opposed private accounts
if they would mean "a lower guaranteed benefit in retirement."

I ended our conversation assuring my daughter that there is no
"crisis." AARP is looking at a few reasonable changes to allow Social
Security to pay full, guaranteed benefits to the boomer generation and
those that follow.

I hardly ever win arguments with my daughter, and I doubt she would
concede that I won this one. But when I got off the phone, I knew she
had come to realize that Social Security was intended as insurance
against poverty in old age, disability and loss of income when a
family's breadwinner dies. It was not intended to be an individual
investment vehicle.

Now, if only I could persuade the "private account" proponents.

Brenda Kelley is the state director of AARP Connecticut.


2005-02-18 13:15:23 EST
Dom posted:

> Recently she told me she found the idea of private Social Security
> accounts appealing. I was stunned.


economists are all scratching their heads, wondering how alan greenspan
could indicate in testimony to the senate that there were three big reasons
why this is a bad idea, and yet then go on to support it.



--
misinformation rules.

Mcs
2005-02-18 13:15:47 EST
she did well with her investments. Many people have said fewer then 15
percent gained in the markets in last five or so years, so maybe she is
basing her opinion on the fact that she gained. I assumed she has made
investments besides stocks but in either case she is very lucky.
"Dom" <DRosa@teikyopost.edu> wrote in message
news:1108748785.357593.140960@c13g2000cwb.googlegroups.com...
>
http://www.courant.com/news/opinion/op_ed/hc-kelley0218.artfeb18,0,1321331.story?coll=hc-headlines-oped
>
>
> I Won The Argument Against Private Accounts
> By Brenda Kelley
>
> February 18 2005
>
> I finally won an argument with my 31-year-old daughter. And it was an
> argument I never thought we'd have.
>
> Recently she told me she found the idea of private Social Security
> accounts appealing. I was stunned. I had assumed that my bright,
> socially conscious daughter would be on my side of the Social Security
> debate - the AARP position against carving out private accounts. But
> the idea of investing her own Social Security money seemed logical to
> her. She's done well so far in her investments. And the private
> accounts proposal includes a protection of current benefits for anyone
> 55 or older.
>
> Yet, I argued, she certainly wouldn't want to jeopardize a program that
> has kept millions out of poverty by supporting "private" accounts.
> Investing in private accounts would remove money from the Social
> Security trust fund, weakening its solvency even sooner than the 2042
> date the fund is projected to be depleted. She agreed, but couldn't see
> how AARP, by opposing private accounts, also was fighting for her and
> her friends.
>
> I pointed out that she earns more money than I do, she probably has
> more in her 401(k) and investments than I do, and her home is worth
> more than mine. For someone who is 31, this is very impressive. I had
> her attention.
>
> I asked her to consider what would happen if both of us suddenly
> experienced a catastrophic illness that left us unable to work. What
> would each of us have then?
>
> Even if I had major expenses and couldn't work, I would have a monthly
> income from my early-retirement program, low-cost health insurance and,
> eventually, a pension from AARP. And I would have Social Security. I
> asked what she would have.
>
> She hesitated. "Well I would have my 401(k) and my investments."
>
> But you would need those funds to pay your medical bills and other
> expenses if you are unable to work, I said. Silence. Then my daughter
> wondered if there would be a government program that would help protect
> her from losing everything she saved. She answered her own question:
> "Would I have Social Security?"
>
> If you were considered disabled and couldn't work, you could receive
> Social Security disability and, after 24 months, you also would be able
> to receive Medicare for your health care needs, I explained. Otherwise,
> you'd have to exhaust almost all of your savings before you could
> receive any help at all.
>
> My daughter is not alone. Fewer than 50 percent of working Americans
> have a pension plan available at their workplace, and, of those who do,
> most don't have a defined-benefit plan like most of my generation.
>
> You have done well by diversifying your investments, I said. Why would
> you want to risk the only secure thing that you have, Social Security?
> And your guaranteed Social Security benefit would be smaller if money
> is taken out of the Social Security pot to personally invest. Your
> taxes would probably increase to help pay off the huge debt that the
> government incurred to beef up Social Security drained by the money
> diverted for private accounts. And there is no guarantee about how much
> your private Social Security account would yield.
>
> Her silence told me I'd won the argument. I'm glad that other
> 30-somethings agree. A new poll, released in February by AARP, Rock the
> Vote and the Joint Center for Political and Economic Studies, found
> that nearly 60 percent of 18- to 39-year-olds opposed private accounts
> if they would mean "a lower guaranteed benefit in retirement."
>
> I ended our conversation assuring my daughter that there is no
> "crisis." AARP is looking at a few reasonable changes to allow Social
> Security to pay full, guaranteed benefits to the boomer generation and
> those that follow.
>
> I hardly ever win arguments with my daughter, and I doubt she would
> concede that I won this one. But when I got off the phone, I knew she
> had come to realize that Social Security was intended as insurance
> against poverty in old age, disability and loss of income when a
> family's breadwinner dies. It was not intended to be an individual
> investment vehicle.
>
> Now, if only I could persuade the "private account" proponents.
>
> Brenda Kelley is the state director of AARP Connecticut.
>



Deaf Power
2005-02-18 13:41:34 EST
On 18 Feb 2005 18:15:23 GMT, "<SmirkS>" <me@privacy.net> wrote:

>Dom posted:
>
>> Recently she told me she found the idea of private Social Security
>> accounts appealing. I was stunned.
>
>
>economists are all scratching their heads, wondering how alan greenspan
>could indicate in testimony to the senate that there were three big reasons
>why this is a bad idea, and yet then go on to support it.

Yeah, we are all stunned. I guess he had to support it so he can keep
his job. He had to kiss his boss's ass. He doesn't give a fuck about
everybody else, and that's the way Greedspan is.


ZenIsWhen
2005-02-18 13:46:24 EST

"mcs" <mcs@yahoo.com> wrote in message
news:nhqRd.36071$t46.26312@trndny04...
> she did well with her investments. Many people have said fewer then 15
> percent gained in the markets in last five or so years, so maybe she is
> basing her opinion on the fact that she gained. I assumed she has made
> investments besides stocks but in either case she is very lucky.

Options NOT available to a large number of working class people who, were
they given extra cash, would NEED to use it to pay for necessities. BTW ...
in case you haven;t noticed, it is those SAME working class people that
George Bush is looking at to INCREASE taxes to pay for his criminal budget!

> "Dom" <DRosa@teikyopost.edu> wrote in message
> news:1108748785.357593.140960@c13g2000cwb.googlegroups.com...
> >
>
http://www.courant.com/news/opinion/op_ed/hc-kelley0218.artfeb18,0,1321331.s
tory?coll=hc-headlines-oped
> >
> >
> > I Won The Argument Against Private Accounts
> > By Brenda Kelley
> >
> > February 18 2005
> >
> > I finally won an argument with my 31-year-old daughter. And it was an
> > argument I never thought we'd have.
> >
> > Recently she told me she found the idea of private Social Security
> > accounts appealing. I was stunned. I had assumed that my bright,
> > socially conscious daughter would be on my side of the Social Security
> > debate - the AARP position against carving out private accounts. But
> > the idea of investing her own Social Security money seemed logical to
> > her. She's done well so far in her investments. And the private
> > accounts proposal includes a protection of current benefits for anyone
> > 55 or older.
> >
> > Yet, I argued, she certainly wouldn't want to jeopardize a program that
> > has kept millions out of poverty by supporting "private" accounts.
> > Investing in private accounts would remove money from the Social
> > Security trust fund, weakening its solvency even sooner than the 2042
> > date the fund is projected to be depleted. She agreed, but couldn't see
> > how AARP, by opposing private accounts, also was fighting for her and
> > her friends.
> >
> > I pointed out that she earns more money than I do, she probably has
> > more in her 401(k) and investments than I do, and her home is worth
> > more than mine. For someone who is 31, this is very impressive. I had
> > her attention.
> >
> > I asked her to consider what would happen if both of us suddenly
> > experienced a catastrophic illness that left us unable to work. What
> > would each of us have then?
> >
> > Even if I had major expenses and couldn't work, I would have a monthly
> > income from my early-retirement program, low-cost health insurance and,
> > eventually, a pension from AARP. And I would have Social Security. I
> > asked what she would have.
> >
> > She hesitated. "Well I would have my 401(k) and my investments."
> >
> > But you would need those funds to pay your medical bills and other
> > expenses if you are unable to work, I said. Silence. Then my daughter
> > wondered if there would be a government program that would help protect
> > her from losing everything she saved. She answered her own question:
> > "Would I have Social Security?"
> >
> > If you were considered disabled and couldn't work, you could receive
> > Social Security disability and, after 24 months, you also would be able
> > to receive Medicare for your health care needs, I explained. Otherwise,
> > you'd have to exhaust almost all of your savings before you could
> > receive any help at all.
> >
> > My daughter is not alone. Fewer than 50 percent of working Americans
> > have a pension plan available at their workplace, and, of those who do,
> > most don't have a defined-benefit plan like most of my generation.
> >
> > You have done well by diversifying your investments, I said. Why would
> > you want to risk the only secure thing that you have, Social Security?
> > And your guaranteed Social Security benefit would be smaller if money
> > is taken out of the Social Security pot to personally invest. Your
> > taxes would probably increase to help pay off the huge debt that the
> > government incurred to beef up Social Security drained by the money
> > diverted for private accounts. And there is no guarantee about how much
> > your private Social Security account would yield.
> >
> > Her silence told me I'd won the argument. I'm glad that other
> > 30-somethings agree. A new poll, released in February by AARP, Rock the
> > Vote and the Joint Center for Political and Economic Studies, found
> > that nearly 60 percent of 18- to 39-year-olds opposed private accounts
> > if they would mean "a lower guaranteed benefit in retirement."
> >
> > I ended our conversation assuring my daughter that there is no
> > "crisis." AARP is looking at a few reasonable changes to allow Social
> > Security to pay full, guaranteed benefits to the boomer generation and
> > those that follow.
> >
> > I hardly ever win arguments with my daughter, and I doubt she would
> > concede that I won this one. But when I got off the phone, I knew she
> > had come to realize that Social Security was intended as insurance
> > against poverty in old age, disability and loss of income when a
> > family's breadwinner dies. It was not intended to be an individual
> > investment vehicle.
> >
> > Now, if only I could persuade the "private account" proponents.
> >
> > Brenda Kelley is the state director of AARP Connecticut.
> >
>
>



Alan Lichtenstein
2005-02-18 13:51:41 EST
"" wrote:

> Dom posted:
>
> > Recently she told me she found the idea of private Social Security
> > accounts appealing. I was stunned.
>
> economists are all scratching their heads, wondering how alan greenspan
> could indicate in testimony to the senate that there were three big reasons
> why this is a bad idea, and yet then go on to support it.

Greenspan's support is not hard to understand. Correctly, he pointed out the
fiscal difficulties in converting from the present system to one in which
there are private accounts. Despite these problem, he can still believe in
the philosophical concept of individual, rather than Government providing for
their own needs. On that basis he can believe in private accounts, while
cautioning against the fiduciary problems associated with their establishment
now. IOW, Greenspan adopts both a philosophical and practical posture, which
are not necessarily in conflict.

Personally, I don't share his philosophical opinions; I merely am attempting
to explain how he can rationalize them.

Alan



2005-02-18 14:03:05 EST
Alan Lichtenstein posted:

> IOW, Greenspan adopts both a philosophical and practical posture,
> which are not necessarily in conflict.
>
> Personally, I don't share his philosophical opinions; I merely am
> attempting to explain how he can rationalize them.
>

imo, the economist decided to take a dip in the political pool.


why, is what i'm wondering.

--
misinformation rules.

Alan Lichtenstein
2005-02-18 14:04:23 EST
"" wrote:

> Alan Lichtenstein posted:
>
> > IOW, Greenspan adopts both a philosophical and practical posture,
> > which are not necessarily in conflict.
> >
> > Personally, I don't share his philosophical opinions; I merely am
> > attempting to explain how he can rationalize them.
> >
>
> imo, the economist decided to take a dip in the political pool.
>
> why, is what i'm wondering.

Ask him on what basis he forms personal opinions.

Alan



Alan Lichtenstein
2005-02-18 14:30:16 EST
"" wrote:

> Alan Lichtenstein posted:
>
> >> imo, the economist decided to take a dip in the political pool.
> >>
> >> why, is what i'm wondering.
> >
> > Ask him on what basis he forms personal opinions.
>
> he's an admitted conservative republican, so would that be a relevant
> question?

Absolutely. Without hearing it from the horse's mouth, so to speak,
causes you to assume, and you know what happens when you assume.

Alan



2005-02-18 14:31:35 EST
Alan Lichtenstein posted:

>> imo, the economist decided to take a dip in the political pool.
>>
>> why, is what i'm wondering.
>
> Ask him on what basis he forms personal opinions.


he's an admitted conservative republican, so would that be a relevant
question?


--
misinformation rules.
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