Monday, March 07, 2005

Debunking Myths

I got an email after I blogged about Social Security the first time. Not a comment added to what I'd written, but an honest-to-goodness email saying that they'd never thought about it like that before.

Few do. Then again after spending mumble-something years working in and around social services, I tend to have a different persective than many do. It's not that the idea of Social Security was bad at the time it was first introduced, it's just that the concept -- aside from being outdated -- is based strictly on political expediency.

The government giveth and taketh away. Actually, it's mostly taketh away with some of the suggested remedies being considered now to once again shore up Social Security: reducing benefits and extending how long you'll have to continue working -- if you live that long -- before you are old enough to begin receiving "benefits."

There's so much disinformation to start with and it's only getting worse.

President Bush, in his State of the Union address, asked why certain members of Congress seem to be against private retirement accounts for the public when they, themselves, have them. That's led some to believe that Congresscritters don't pay into Social Security.

They do, now.

I'm doing this from memory so while my dates may be off, the outline of what happened isn't.

Federal employees were exempt from FICA, paying into a pension plan instead. But with Social Security facing a projected fiscal crisis in the years ahead (Gee! I thought that was something that Dubya just made up!) in 1983 in order to bring more money in (And fix Social Security so that it would be and remain solvent forever and ever.) Federal employees lost that exemption. Instead of having a pension plan for their retirement / disability needs that they paid into, all employees hired after a certain date had was Social Security.

(Also affected were Congresscritters.)

Federal employees were less than pleased. Their unions were not happy, either, saying that forcing its members to rely only on Social Security was a really bad and mean thing to do, 'cause in their old age Federal employees would be living in poverty and having to eat cat food in order to afford their prescriptions . . . well, they didn't put it exactly that way, but you get my drift.

In order to make sure Federal employees (including Congresscritters) didn't have to rely solely on Social Security, the Thrift Savings Plan was added so that they didn't.

Both USA TODAY and the National Center for Policy Analysis note that the "risky private investment scheme" that's part of Bush's plan for overhauling the current Social Security System for we regular folk, would be modeled after the plan Federal employees (including Congresscriters) already have.

The results of a survey in today's paper showed that those surveyed were against the idea of private personal accounts because of stock market volitility. People could lose their entire retirement nest egg, so Social Security is safer! Oh, and its return is better!!!

Gag me.

Both USA TODAY and the NCPC articles above explain the fund choices available under the TSP. None are based on a single stock, or the total retirement plan based on the stock market alone. And compared to the 2 percent return on the T-bills held as IOUs in the Social Security "Trust Fund" (that you may or may not live long enough to ever get a thin dime from) these are the 10-year returns for the five different funds available under TSP.

Funny the disinformation. Like the latest reports that Dubya's plan for overhauling Social Security is dead.

That's what, the second or the third time?

UPDATE: Texasbig links with MORONS! (that doesn't sound right, does it)

UPDATE 2: Welcome Wizbang! readers. I just put a fresh pot of coffee on. It'll be ready in a second.



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