DLC's Dream Accounts make claim to save Social Security. How will they help Social Security?

It is a sincere question. If it is true that new savings accounts will save Social Security, inquiring minds deserve an answer. I just saw a post here that the new proposals by our Democratic candidate to have saving accounts "in addition to" Social Security have nothing to do with it.

Yet the new American Dream Accounts proposed by Hillary at the DLC definitely make the claim it will save the Social Security program. People do not get to have it both ways.

My question: how does setting up personal savings account save Social Security....even assuming it needs saving?

I have asked that over and over. I get no answer.

From Hillary's American Dream Initiative as presented at the DLC website:



Sounds to me like they think Social Security is threatened, and that instead of reinforcing it they want to start a new program. Correct me if I am wrong. Why put employers through the disruption of another program in which they must meet matching funds?

More about what the plan is. It sounds more and more like they are going to replace Social Security gradually with a program which will be phased in and called everything but what it is. Personal accounts, private accounts, Dream accounts.

The DLC/PPI is working with the right wing Heritage Foundation to "save" Social Security. This statement from their meeting disturbs me.



Actually Josh Marshall said it much better than I could.

But that's the essence of it: abolishing Social Security or not.



I think all the candidates are obscuring the issue for various reasons.

More from the link:



Again, someone explain how these voluntary accounts will help Social Security in any way at all? Why is this even being proposed? And does Social Security need saving at all? And if it does, why pump all that money into something else?

Fogies and "pre-fogies" want to know.

Josh Marshall has his head up his a-- as he tries to dump on Hillary.

These accounts are an addition to the current program - an expansion of government and entitlements so as to provide a better retirement than Soc Sec now offers but without changing anything about the current Social Security System. We don't save as a nation - this jumpt starts a solution to that problem financed by FIT in all its progressive glory.

Your Zfacts web site is correct - indeed there are many small things that can be done - including doing nothing as there is no real current or even a likely future problem.

yet.

any candidate who supports the crisis meme & the idea that reform is needed because of this (phony) crisis is lying to the general public, for the benefit of small special interest groups (finance, the ultra-wealthy, transnational corporations).

i don't support any candidate who supports this con.

and it is a con. & they know it.

The intention is to create two classes of ss recepients, those with private accounts and those without, divide the SS voting block into these two groups, pit one against the other, and transform SS into a welfare program. Concurrently each of these private accounts will be separately managed by a private financial services company at enormous inefficiency to us and a huge corrupt gift to wall street. Once again, this is an example of a Kleptocracy at work: one nation of the corporate-personhood, by the corporate-personhood, and for the corporate-personhood.

most can only dream of being able to put money in a savings accout.

Shite from the dlc..they expect us to lap it up cause they said so and they can be trusted. Trusted to Screw You Over.

The thing is that the Greedy Old Pervert party and the DLC "centrists" can not stand that the government actually has a program that helps people.

1. "explain how these voluntary accounts will help Social Security in any way at all?"

it won't.

2. "Why is this even being proposed?"

on behalf of contibutors who hope to privatize SS. to push forward that game plan.

3. "And does Social Security need saving at all?"

no.

4. "And if it does, why pump all that money into something else?"

to weaken the existing system.

We do have a winner.

Welcome to DU.

Thanks, appreciate the welcome.

If it needs anything, it needs more means testing. Those who won life's lottery big enough to put away money for retirement don't need SS but those who were not so fortunate need a retirement income. It's that simple -- SS retirement money should go to those who really need it.

I think that would leave it wide open to being destroyed as a program for the poor.

There are better ways to tweak.

Its strength is that it's a self-financed, universal program which gives back something to all payers - not charity or welfare.

Turning it into a welfare program spells doom.

The genius of the program is its universality. That is exactly what has made it immune so far to assault from the right. It is not welfare. It is a universal pension program. Everyone pays in, everyone gets a pension.

Shock Therapy

by Hannah (my copyleft)
Pt. 1

As all good torturers know, fear and uncertainty can be wonderfully motivating.

In Naomi Klein’s latest book, The Shock Doctrine, she explains how this simple principle has been used to push through neo-liberal economic policy around the world. In the wake of crises and disasters, the boys from the IMF and the World Bank would show up, loans in hand, preaching the gospel of privatization and austerity.

The natives, their better judgment clouded by fear and confusion — or bribes, when needed — would generally submit. It was called “shock therapy.”

...Case in point, right here at home: Social Security.

A recent headline from my local paper: “Social Security 13.6 Trillion Short.” Big, scary number, but you’ll search the article in vain for any contextual detail. Just how much is 13.6 trillion? And when will this shortfall occur? Next week? Next year? Sometime in infinity?

They don’t say. Just the scary number. The lack of context, boys and girls, is a clue you’re being played.

The correct answer is: “Sometime in infinity”.1



Pt. 2

...So new tax cuts were passed by a bipartisan Congress in 2001, and once again, the main beneficiaries were — you guessed it — the filthy rich. The top 1% of wage earners, those making 500K and up, saved 70 billion in 2006 alone. Enough to fund the Department of Education with change to spare.

Over the ten years 2001-2010, the top 5%, those making 191K and up, will save about 920 billion dollars. That’s 48.3% of all Bush’s tax cuts.1

Incidentally, that’s about half of what’s in the Social Security Trust Fund right now, built up over 24 years on wages under 97K.

But the Trust Fund debt, some say, is “just IOUs”. You’ve heard the spiel. Here’s Bush in 2005:

"Now, let me tell you something about the Social Security system. It’s not a trust. A lot of people think, well, we’re collecting your money and we’re holding it for you, and then when you retire, we’re going to give it back to you. That’s not the way it works. We’re collecting your money, and if we’ve got money left over — in other words, if the — if there’s more money than the benefits promised to be paid in our hands, we’re spending it and leaving behind an IOU. That’s how it works. It’s called a pay-as-you-go system. You pay, we go ahead and spend it. (Laughter.)2"

Isn’t he cute?

...The cost of the war in Iraq, waged over imaginary WMDs, is approaching 200 billion a year.5 Nine billion of that has simply disappeared6, and unknown millions have gone into the pockets of corporations with ties to Cheneys and Bushes.789

Apparently it’s easy to find 200 billion a year to kill people, even while cutting 70 billion from millionaires’ tax bills — but impossible to come up with 60 billion or so a year to redeem the Trust Fund.10

Those IOUs are implied to be “worthless” only because they’re owed to ordinary working people: sheep to be sheared, rubes to be conned, like the rubes dying in Iraq.



Pt. 4

Here’s where we come back to Klein’s thesis. In her book she quotes Milton Friedman, the capo di capi of the Chicago School of Economics: “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”1

Within certain circles of power, the Social Security “crisis” has been lying around for a very long time. In his 1936 campaign against FDR, Alf Landon called the new program a “fraud on the workingman,” and continued:

“Every month they bring 6 per cent of their wages…so that he may act as trustee and invest their savings for their old age….the day comes…What do they find? Roll after roll of neatly executed IOU’s.”2

Those damned IOUs again. FDR won that election.

During the war and after, booming profits kept the rich folks busy for awhile, but by the end of the 50’s things had started to slow down and Social Security crisis was back on the agenda.

St. Reagan, in his nominating speech at the 1964 Republican convention, suggested privatization.4 Goldwater, the nominee, echoed the call. He lost...

In 1978, a young Congressional candidate picked up the theme of crisis. Stumping at the Midland Texas Country Club, George W. Bush said:

“ will be bust in 10 years unless there are some changes…The ideal solution would be… to invest the money the way they feel.”8

Like the WMDs, the 1988 Social Security bust never manifested. You’d think Bush would be embarrassed, but 20 years after the crisis-that-wasn’t, he’s still banging the privatization gong.

There’s plenty more scary talk where that came from, a steady stream of policy papers and opinion pieces, dutifully parroted by the media...

In 1983, in the wake of another failed attempt to gather public support for privatization, Cato published an influential paper titled “Achieving a Leninist Strategy.”14

The authors start by acknowledging that Social Security is a popular program, so head-on approaches to dismantling it are unlikely to be successful. Instead, they recommend the “Leninist Strategy” of the title...To help create revolutionary conditions, they suggest:

1) Mobilizing a coalition of folks who’d benefit from privatization (banks, investment houses, and other financial institutions).

2) Continuing public “education” aimed at discrediting Social Security and talking up privatization.

3) Creation and promotion of financial savings alternatives (e.g. 401Ks, IRAs) to get people accustomed to using them.

4) Splitting potential coalition supporters of Social Security, such as current and future recipients: “…the strategy must be to propose moving to a private…system in such a way as “to…neutralize…the coalition that supports the existing system.” Thus, older folks would be told their benefits wouldn’t be cut, making them less likely to mobilize to help protect benefits for the young.

All this has happened in the years since.

At the end of the paper, the authors say: “The next Social Security crisis may be further away than many people believe…it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform.”



Pt. 5

Lenin and the boys at Cato agree with Friedman: “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”

We know what ideas our “leaders” have lying around. They’ve been drumming them into our heads for years. What shape might the coming crisis take?

Crisis needn’t be a hurricane or tsunami; it can be a financial disaster as well — even a phony one. As long as people are scared and confused and will do what you want them to — that’s all that matters.

Crisis might look like the perfect storm of mortgage meltdown, recession, declining industries and wages, rising deficits, all coming to a head as the boomers retire — and that unfortunate file cabinet full of IOUs, with — so sorry — “no money” to redeem them.

Combine that with a full-court press of pundits, preachers and politicians, all well-manicured and well-fed, none in any danger of going without in their old age, though they insist you must. All of them nattering away at you, on the TV, in the papers, on the radio, relentless as the zombies in The Night of the Living Dead:

“There’s no-o-o-o money! No-o-o-o money! If you don’t do what we say the country’s going to go broke and you’re all going to die!”

It might be that the 1983 debut of both Greenspan’s “reform” and the Cato paper wasn’t coincidental. It might be, indeed, that Greenspan created the debt to the Trust Fund with an inkling that it could eventually be hyped as a “crisis” to take down Social Security for good.

That’s how the IMF did it, Klein says. Get the rubes in debt, then pressure them to take your “shock treatment,” your austerity program. As in Chile, as in Russia, where poverty rates doubled and tripled after the treatment1; so here. We too must take our medicine.

Bugger that.

There’s no Social Security crisis. There never has been. If you’re not convinced yet, how about this: the projection used to hype the phony crisis assumes a growth rate of 1.8% over the next 75 years.2 That’s lower than the 1.9% average growth rate of the Great Depression, 1929-1940.3

But there are actually three projections; an optimistic one, an intermediate one, and a pessimistic one. In the “optimistic” scenario, long-term growth averages 2.6%, the Trust Fund never runs out, and there’s a 17-trillion dollar surplus in 2080.4 So far, reality has always turned out closer to the optimistic projection than the other two. Since 1980, growth has averaged 3.1%.5 Whee! Feel better?

Not that a projection 75 years into the future has any bankable accuracy anyway.

The projection, like “crisis” it predicts, is a fraud, a cynical Big Lie, a con. They want your money. That’s all they’ve ever wanted, and they’ll keep pushing until they get it, unless they know you understand the con.

The Republicans won’t save you, and the Democrats won’t save you either. They’re the ones up on the tube, debating oh-so-seriously about the “crisis” when they know it’s phony, pretending to disagree, all the better to con you. They’re the good cop and the bad cop, the inside and the outside man in the three-card game.6

They know that some of you’ll want to identify with the nice, caring Democrats, who’ll save Social Security by raising taxes — just a hair, just a smidge. And others will want to identify with the tough, fiscally responsible Republicans, who’ll institute sensible private accounts.

And while you’re watching the game, taking one side or the other, getting all riled up about the stupidity of the other side — they’re moving in, like the partners in crime they really are, for the coup de grace.

Here’s the straight story.

“The economy” isn’t the casino, isn’t the game, isn’t even the chits of paper we use to trade and keep score with. The economy is the real world of producing real goods and services. So long as American workers are producing real goods and real knowledge for decent wages, there will be enough surplus for their elders’ Social Security.

If, on the other hand, our “leaders” follow the road they’ve been on the last 30 years: off-shoring production, outsourcing democratic government to unaccountable private power, stripping resources faster than they’re renewed, allowing infrastructure and human skills to decay, and substituting a casino economy for a real one, we’ll all go broke, and private accounts won’t change that likelihood one bit.

Social Security’s not in crisis. Our leadership is. Our democracy is.

No tax hikes, no benefit cuts, no private accounts. Hands off, ya lying crooks.



Full here, with references:

http://www.dissidentvoice.org/author/HannahB/

"Offer the People the choice between a real
Republican and a fake Republican and they will
choose the real thing everytime."

SS is not in crisis. Medicare is in Crisis.
Wall Street has been after the SS Fund for
years. It appears the DLC is ready to give
it to them.

They ARE trying to turn Social Security into a crisis to benefit our corporate masters.

Thanks for the link.

If anyone doesn't think the whole SS "crisis" meme isn't planned & coordinated from the top, I have a bridge. as you note in your post, the same type of plans are being pushed in latin america, in europe (sweden, england, & others have already instituted them) & elsewhere.

the same with school vouchers & similar initiatives. absolutely pushed from the top, & on a global basis.

restructuring the global economy to increase the take for capital, that's the bottom line.

...Thanks for posting those here. And welcome to the DU!

I stumbled over the cato paper & the cooked "projections" doing my own research on the so-called crisis & was so mad i wrote the article.

it pisses me off no end that the papers & the tv hype the phony crisis but you never hear anyone analyze the data its based on.

it's the Big Lie exemplified.

out who is the best Republican and Safest Republican for President.

Why? Why set this new program up at all? Is going to be gradually phased in with no opt-out? Why not work to fix weaknesses, whatever they may be through the clouded rhetoric, in the Social Security program?

Why start up a whole new thing unless it is for the profit of corporations?

The people be damned, right? Profit first.

We indict the criminals now stealing from this fund and FINE them BIG BUCKS, to be paid BACK into the SS fund they stole it from in the first place!

>>>as Will Marshall, one of its founders, puts it, "using choice and competition to advance...the big social insurance programs like Social Security and Medicare."<<<

The same brand of privatization and outsourcing that takes away choice and competition, and which bolloxes up Medicare, and which has done such wonders for the effectiveness of the military.

Why or why not?

as part of a personal savings plan.

But not as a substitute for SS. & not funded from the use of SS dollars.

& not even as a substitute for a "defined benefit" pension.

as many folks i know are discovering to their dismay.

And why does that difference mean that Dream Accts will somehow replace SS?

Note: Dream Accts are not funded by SS dollars.

That was in fact the major point of my post. Why? Why did they present the Dream Accounts as a fix for Social Security?

You absolutely assume what I post is wrong, and then you don't read it.

It's not in your OP

You have a rote response in your head, and you have no clue what I am saying.

Why are you afraid to say if you support or oppose 401k's?

I was not talking about that at all.

There's no difference between 401k plans and Dream Accounts

What's the cost to small employers (5+ employees) v. transnational corps?

Why link it to SS?

Why not, after blathering on about how US workers are losing income, introduce plans to stop that trend & what's causing it, rather than introduce a new way to save those declining wages, a new paperwork requirement, etc.?


"Americans deserve to know that a lifetime of work will ensure a secure retirement. We need a new approach that requires every employer to open a retirement account for every worker; enrolls workers automatically unless they opt out; increases their contribution automatically over time unless they direct otherwise; gives employees the advice and guidance to allow them to invest wisely; and enables workers to take their pensions with them when they change jobs.

As the Hamilton Project has proposed, we should require every firm with more than five employees to enroll its workers automatically in a traditional defined benefit plan or a 401(k). In addition to automatic enrollment, these plans will automatically increase as workers' incomes increase. Workers will be able to opt out of the program or its particulars at any time.

To minimize the cost and administrative burden to employers, we should provide tax credits to employers for enrolling workers -- and give employers the option of enrolling their employees in a payroll-deduction IRA or a version of the federal government's Thrift Savings plan. Workers will be free to withdraw funds from their American Dream Account for retirement after age 65, or at any time for college or the purchase of a first home.

Saver's Credit. Instead of more breaks for those at the top, we should provide saving incentives to hard-working Americans who can least afford to put money aside. We should make the Saver's Credit permanent and refundable so that working- and middle-class families receive a 50 percent matching contribution for retirement savings of up to $2,000 a year."

and neither are linked to SS. I havent seen Clinton link her Dream Accts to SS anywhere. The quote you post says nothing about SS either. I have no idea why you think American Dream Accts are linked to SS. Maybe you could explain the link.

As far as the cost to employers, it will be the same for small business as it is for a large corporation, even transnationals. The cost will be $1000/per employee less any tax credits given to the employer for matching the employee's savings.

They SAID they were linked. In their own words.

You are doing this on purpose, you do it in every thread. You simply do not read.

All it says about SS is that "FDR ushered in the Social Security system in the last century"

I'm asking, where's the funding coming from? You didn't answer.

If the cost is $1000/employee for both a big & small business, obviously it's a bigger hit on a small company's bottom line.

Here's where the funding comes from straight from Hillary's website
http://www.hillaryclinton.com/news/release/view/?id=4204

5. A Fiscally Responsible Plan to Provide a 5000-to-1 Tax Cut for Wealth Creation: The cost of the generous matching tax cuts to middle income families in Hillary's American Retirement Accounts plan would be about $20-$25 billion per year. Hillary will finance these tax cuts without increasing the deficit by dedicating a portion of the revenue from freezing the estate tax at its 2009 level of $7 million per couple. According to the Joint Committee on Taxation, freezing the estate tax at that level and avoiding outright repeal generates more than $400 billion over ten years. By devoting a portion of these resources to fund the matching tax cuts in the American Retirement Accounts plan, Hillary will be avoiding a further tax cut for 10,000 of the wealthiest estates in the U.S. in order to give tens of millions of families a tax cut to help build their own nest egg for retirement. If 50 million households benefit from the matching tax credits in the American Retirement Account, that would mean that for every 1 wealthy estate facing a less generous estate tax exemption, at least 5,000 middle class families would receive a tax cut that will help them save, invest and one day own an estate of their own.

As this makes clear, NO SS funds will be used. It will be funded by freezing the estate tax instead of allowing the scheduled reductions to take place.

So again I will ask you, how are the American Dream Accts any different than 401k plans and how does that difference make them a threat to SS?

PS - The webpage I linked to directly contradicts your claim of linkage in the very first paragraph:

Today, Hillary Clinton announced a bold new American Retirement Accounts plan with generous matching tax cuts that -- alongside her efforts to strengthen defined benefit pension plans -- will help tens of millions of middle class families build wealth for their future. Building on her commitment to protect the guaranteed benefit of Social Security, Hillary's American Retirement Accounts plan will tackle the current retirement savings crisis by helping ensure that all Americans can afford a dignified retirement.

The only mention of SS is her promise to PROTECT the GUARANTEED BENEFIT. The only thing she links her Dream Accts to are 401K's and savings. She does not mention any "SS crisis" (like the repukes, DLC, and Obama do), Instead, she mentions a "savings crisis".

The only thing Dream Accts, like 401K's, have to do with SS is that they are all for retirement.

"No, you didn't ask; You told me where the funding came from and you're wrong"

Nope, I asked you in post 33, & asked several times thereafter until you gave me the information in this post.

Thank you for linking the relevant info. I'll take a look.

401 K is PERSONAL CHOICE BY THE PRIVATE INDIVIDUAL. SS payments are not . I have been collecting for 8 years and to this point it has run very smoothly! WHen I turned 65 ( I had a Widow's pension from age 60,) they took out $66.00 for Medicare, I screeched, made calls that day, discovered that Maine has Mainecare which now pays the feds, monthly, and I get the full amount of SS income. I was only out 66. for 2 months, SS repaid me that, and life went on as before.............
3 years laer............they are doing funny math woth the cost of living increase so it doesn't work now. Increases aren't adequate for the falling dollar & rising prices. A box of instant mashed potatos has risen 23%. my income has risen .3%. What is it about potatoes that has suddenly become so expensive to produce?
The more money you made to start with, the greater the increase. I get $24.00 more for 2008, a friend who's income is 2/3 of mine only gets $10.00
But it is efficient. You have privatized accounts, it is sprawled out to private individuals to oversee it.Choas! You're going to get your ENrons & Mike Browns......
If Paris Hilton's accountant had been running SS all these years the investment that could have been made would have INCREASED IT GREATLY! There wouldn't be any discussion of "in trouble".!

(kudos for a thoughtful and truthful well researched piece.) Leaves off the phony "RETURN" issue . They who would privatize always claim that you get a "Better return" from your "investment" privately.

First SS is NOT an investment. NOT. NOT.NOT. It's a FUND. A pool of money from which to draw payments set by the SSA. It's an obligation we as citizens have to the old in this country, to provide this safety net to keep those unable to work from the oblivion of no-wage poverty.

Suppose it, like the DLC says, was "invested" for you. Like a big mutual fund.
Well, those fund managers get PAID. Well. That's why in places that have actually drank the Friedman School koolaid, places like Great Britain and Argentina, EXPENSES to administer the funds has increased some 300 %. That is precisely because the administration is not being done by a government bureaucracy.

But back to investment. Whats the average return from S&P 500 ( broadest measure of the stock market) for the past year? About ZERO. Maybe -1%. How about since 2000 , the tech meltdown? it's in the 7's. About 1.3% per year.depending on the method used of calculation. How about MANAGED MONEY, what we're talking about? It seems that managed money over a ten year period http://www.smeal.psu.edu/news/latest-news/may03/stocks.html">did worse than the Market at large with higher risk. And I might add, at higher expenses.

The common rebuttal to this is "Over Time, we do "better" in the stock market". Oh really? IF you apply that logic, then Real Estate has always surpassed stocks as an investment, but you don't see the MBO and Mortgage banks clamoring for Social Security "investment " money. Because those of us in that industry know what a dodge this is, and we work hard to avoid dodginess. When we let the Stock Market crowd into our industry ( remember the DeReg Bill that came out of Gingrich congress? It eliminated the mandatory "wall" between Banking and stock brokerages) the result is the subprime mortgage debacle.

Social Security isn't about "investments" SS is about GUARANTEES. Let's leave aside the ghastly fraud perpetuated on Baby Boomers for the past 3 decades regarding the tax (put briefly, to cover the massive Reagan era debt they borrowed the surplus funds intended to pay baby boomers as a huge bulge in population, and created an executive order that said you don't have to include this massive figure in the deficit) the only thing close to guarantees in the US Gov't is Treasury Bonds. Which we have sold to China for the duration of Bush's tenure. Is that going to continue? Who knows? Kind of changes the idea of return.

We already HAVE "investment" vehicles available for those who wish to place their money in tax free accounts for the future. (Roth IRAs spring to mind.)

This whole fandango is designed to put a fresh source of funds into the stock market, period.

It's to drive up share prices and to throw more money at Wall Street via fees.

You wrote: "A pool of money from which to draw payments set by the SSA. It's an obligation we as citizens have to the old in this country, to provide this safety net to keep those unable to work from the oblivion of no-wage poverty."


....then why do we pay it to rich old people?

so much for your "sincere question"....

http://www.dlc.org/ndol_ci.cfm?contentid=253993&kaid=86&subid=194

<<A SECURE RETIREMENT

At the core of the American Dream is the proposition that working hard and playing by the rules is the ticket to prosperity and security. Today, many Americans find themselves working longer and longer just to get by -- and putting off saving for retirement so they can pay the bills today.


... Just as FDR ushered in the Social Security system in the last century, we need to make new provisions for economic security in this one. That means asking every employer to give workers the chance to save, and challenging every American to make the most of it.

Other funders are less famous, but their fortunes are equally large. The Koch brothers, inheritors of one of the world’s largest private oil fortunes, fund what’s probably the most important source of privatization propaganda: the Cato Institute.12 Incidentally, George Bush’s sister Doro Bush Koch, is reportedly married to a Koch cousin.13

In 1983, in the wake of another failed attempt to gather public support for privatization, Cato published an influential paper titled “Achieving a Leninist Strategy.”14

The authors start by acknowledging that Social Security is a popular program, so head-on approaches to dismantling it are unlikely to be successful. Instead, they recommend the “Leninist Strategy” of the title. Strange to find libertarian free-marketeers so enthusiastic about a reviled communist, but politics does make strange bedfellows.

Lenin was a political strategist known for super-pragmatism, a proponent of stealth tactics, alliances of convenience, and sleeper cells. He advised a secretive vanguard to help create the conditions for revolution, while lying in wait for the “revolutionary moment” when power could by seized by virtue of the same vanguard’s superior organization and discipline.

This is exactly what the Cato authors recommend in the way of a long-term strategy to take Social Security private. To help create revolutionary conditions, they suggest:

1) Mobilizing a coalition of folks who’d benefit from privatization (banks, investment houses, and other financial institutions).

2) Continuing public “education” aimed at discrediting Social Security and talking up privatization.

3) Creation and promotion of financial savings alternatives (e.g. 401Ks, IRAs) to get people accustomed to using them.

4) Splitting potential coalition supporters of Social Security, such as current and future recipients: “…the strategy must be to propose moving to a private…system in such a way as “to…neutralize…the coalition that supports the existing system.” Thus, older folks would be told their benefits wouldn’t be cut, making them less likely to mobilize to help protect benefits for the young.

All this has happened in the years since.

At the end of the paper, the authors say: “The next Social Security crisis may be further away than many people believe…it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform.”

here's the whole thing -

"At the core of the American Dream is the proposition that working hard and playing by the rules is the ticket to prosperity and security. Today, many Americans find themselves working longer and longer just to get by -- and putting off saving for retirement so they can pay the bills today.

Too many Americans do not have the opportunity to save. Too many of those who have the chance do not take it. And too many of those who do save start too late and do not save enough.

Only one-half of American workers are offered a savings plan. One-quarter of them turn it down. Many workers with retirement accounts change jobs too frequently to keep up the habit. Fewer and fewer employers offer traditional pensions, once the gold standard of retirement, and too many try to default on them.

To make matters worse, the tax code is upside down, giving the most benefit to the most fortunate -- who do not need an incentive to save -- and too little to families that desperately need a boost.

An aging society has no choice but to act. Just as FDR ushered in the Social Security system in the last century, we need to make new provisions for economic security in this one. That means asking every employer to give workers the chance to save, and challenging every American to make the most of it."



--------------------------



This program is about forcing people to save for their retirement. Social security was never meant as a primary retirement account.

There is nothing in this program about "saving" social security, as the OP so disengeniously states.

"Retirement Security," & the plan is linked to SS in the body by association.

If the plan is simply a vehicle for "savings", why the association? Can we take these new savings out to buy a house or car or jewelry or whatever we want?

Or are they just for retirement? If so, why do we need a new gov't-mandated retirement savings program on top of SS? Particularly one that puts a heavier percentage burden on small local business v. large transnational corps?

as opposed to, say, higher overall wages so we could save more on our own, in the way we please, v. pumping up the pillsbury doughboy stock market?

BTW, I ask again: where's the funding coming from?

who will nitpick and argue and worse over silly stuff.

Important points made don't matter to them...they just keep picking those nits.

in your "arguments"?


Is that your "important" point, MF?

That is just so pathetic.

I take time to post credible things, and all the DLC advocates here do is try every way they can to tear it down. You try to discredit me, you keep repeating the same phrases over and over.

It is defensive on your parts. You just go after other people.

Hannah B. seems pretty smart. She will get the numbers soon of those who do nothing but spout empty phrases.

:rofl:


you posted -

"DLC's Dream Accounts make claim to save Social Security"

That's a complete fabrication. Absolute nonsense.

I'm not "trying" to discredit you - I have discredited you.

So keep your sanctimonious bullshit, please.

"Retirement Security" does not mean "Social Security". Wherever did you get the idea that they were the same?


"the plan is linked to SS in the body by association."

No, it's not. The only time SS is mentioned, it only says that FDR started SS

"Can we take these new savings out to buy a house or car or jewelry or whatever we want?"

Just like 401K's, which is what these are, there are a # of circumstances in which you can borrow against the acct without penalty, but you have to pay it back. You can take the money out to buy whatever you want, but then you have to pay all of the accrued taxes and a penalty for early withdrawal JUST LIKE 401K's

Do you oppose 401k's? I noticed you never answered my question.

Or are they just for retirement? If so, why do we need a new gov't-mandated retirement savings program on top of SS? Particularly one that puts a heavier percentage burden on small local business v. large transnational corps?

They are intended for retirement but you can withdraw the money at any time. Also, it is not mandated. Individuals can opt-out of the savings plan and these accts place an equal burden on businesses large and small.

as opposed to, say, higher overall wages so we could save more on our own, in the way we please, v. pumping up the pillsbury doughboy stock market?

CLinton has always supported minimum wage increases, investments in education, and many other programs meant to increase productivity, income and our standard of living

BTW, I ask again: where's the funding coming from?

So, I'll answer you again - It comes from cancelling cuts in the estate tax.

Want to ask again? Maybe third time will be the charm

"I noticed you never answered my question."

in fact, i did. post 24.


"these accts place an equal burden on businesses large and small."

how is $1000 per employee at my local burger joint = to $1000/employee at Microsoft? Each MS employee generates ~$200,000 in profit. Each local burger joint employee generates e.g. $5000. Big hit to my local bottom line, small hit to MS.



"So, I'll answer you again"

No need. I've already read your earlier post. However, you hadn't responded when I made my 3rd request.

as I said, I'll take a look.

I used their own words.

nowhere does it say that dream accts will "save" social security. You made that up from the whole cloth.

What can I say?

:shrug:

And how does that difference threaten SS?

I am often reminded of that here at DU on some issues.

right outside your window.

...??? IRA, Roth IRAs, 401K programs, god there must be a zillion tax-deferred ways to save.

The savings problem is a problem of Americans living like grasshoppers. (the fable of the ant and the grasshopper, look it up if you are not familiar)

People don't save for 2 reasons: some simply cannot live on a cent less than they make and others refuse to drive an older car or eat at home.

And BTW, anyone who thinks the "crisis" is a fraud is also delusional. I don't believe in any of these SS modification plans, but trust me, in 15 years when there is 2.5 workers supporting each retiree, something will have to give.

I believe that has long been discredited.

.. all you want. The FACT is that there is NO SS money saved. Not one thin dime. Every cent that SS pays out has to come from tax revenues.

Anyone under 40 expecting to get much from SS is delusional.

some have been saying the same thing for 70 years?

alf landon, 1936:

"Every month they bring 6 per cent of their wages…so that he may act as trustee and invest their savings for their old age….the day comes…What do they find? Roll after roll of neatly executed IOU’s.”2

gw bush, 1978:

“ will be bust in 10 years unless there are some changes…The ideal solution would be… to invest the money the way they feel.”8

and still, the deluge has not arrived.



<<there is NO SS money saved. Not one thin dime. Every cent that SS pays out has to come from tax revenues.>>

So what's different than in the last 70 years? During which, incidentally, SS didn't go bust.

BTW, what kind of vehicle would the feds use to "save" money?


If you think the TF is too big to be redeemed, it's perhaps yourself who's delusional:

Current TF: 1.7 trillion

Divided over 24 years (approx term of boomer retirement years) = 70 billion/yr

Current cost of Iraq: ~200 billion/yr

2006 value of Bush tax cuts to top 1%: 70 billion

Value of Bush tax cuts (2001-2010) to top 5%: 920 billion (~1 trillion)

It's question of priorities.

"Apparently it’s easy to find 200 billion a year to kill people, even while cutting 70 billion from millionaires’ tax bills — but impossible to come up with 60 billion or so a year to redeem the Trust Fund.10

Those IOUs are implied to be “worthless” only because they’re owed to ordinary working people: sheep to be sheared, rubes to be conned, like the rubes dying in Iraq."

http://www.dissidentvoice.org/2007/11/shock-therapy-the-big-lie/

... the facts now have nothing to do with the purported facts of the past.
FACT: the SS "trust fund" consists of nothing but Treasury notes, which are nothing but a "promise to tax and pay" in the future.

It doesn't take a rocket scientist to see where we are.

leave us not insult one's intelligence.

<<the SS "trust fund" consists of nothing but Treasury notes, which are nothing but a "promise to tax and pay" in the future.>>

Why don't you tell that to Bill Gates & others of their ilk, as they invest heavily in those "promises to pay".

Oh, you say the SS non-marketable T-bills are "different" from marketable ones, because they've labeled those debts differently?

A decision to default would be made only if they thought they could get away with it, not because there's any problem coming up with the cash.

The Bush admin is managing to find 200 billion/year to spend on a phoney war while giving 70 billion/year in tax breaks to the top 1% (remember when they used to RAISE taxes on the super-rich in wartime?)

That's about 1/4 trillion a year, way more than the yearly cost of redeeming the TF over the boomers' golden years.

The only way they can get away with default is if the average voter keeps getting pumped full of propaganda about the phoney "crisis," & how the SS debt is just a "promise to pay," not a "real" debt. Which narratives like yours, unfortunately, futher.

I'm sure you don't want to help further a massive theft from the American people, do you?

Besides which, the numbers are cooked. The intermediate forecast is based on Depression-era growth rates, & the real numbers have always come in closer to the optimistic projection: which equals continuing surpluses for the next 75 years.

Making the TF issue moot.

In reality, we should cut SS taxes; we're overpaying. The Greenspan fix was a stealth shift of the total tax burden onto the middle & lower brackets.

It doesn't take a rocket scientist to see where we are--& why.

The only thing "new" about Dream Accts is that they require employers to open, and contribute to, 401L plans. Presently, no employer is required to offer a 401K plan and for those employers that do offer one, they are not required to contribute any money to it.

It has nothing to do with how many workers there are.

It has everything to do with:

1. How productive those workers are
2. What they're producing
3. What percent of the income from production they get.


Pre-SS, the ratio was 16:1, went quickly to 4:1 in the 60's without crisis; because the worker of the 60's was several multiples more productive, was producing real goods the world wanted, & was receiving wages that kept up with productivity & inflation.

Just as one farmer used to be able to feed 16, & now feeds 600 (or whatever the numbers are).

Today it's 3:1, maybe will be 2:1 (though the SS forecast lowers immigration below current levels to get that outcome). Japan & parts of Europe are already there. But they're making stuff the rest of the world wants to buy.

That's not a crisis, unless we have Stone age technology.

Or unless capital wants an expanding cut of surplus production, such as they've been taking the last 30+ years.

If the ability to provide for the elderly depends on the number of workers per old person, then private accounts won't change that problem; nothing will.

Thankfully, it has nothing to do with the number of workers/retiree, but with how large a surplus workers can produce, & how it's divided.

This guy at the CAP calls them Universal Voluntary Accounts. Make that UVAs instead of Dream Accounts. From 2004...and this guy admits it is almost like Bush's plan for private accounts. At least he is honest.

http://www.americanprogress.org/issues/2004/03/b38731.html

"In addition, the low administrative costs of a UVA system will enormously increase workers' retirement savings. And as many people have become aware in the debate over recent mutual fund scandals, administrative fees can take quite a bite of people’s savings. According to President Bush's Social Security commission, a centralized UVA type system would have annual administrative costs equal to just 0.3 percent of its assets. By contrast, existing 401(k) plans have administrative annual expenses that average more than 1.4 percent of assets. The lower fees associated with the UVA system would have the same effect as increasing the annual return on investment by 1.1 percentage points."

"However, establishing the UVA system will be a huge step forward. It also should be possible to build a consensus behind it even in the current political environment. After all, it is essentially what President Bush proposed – except this system is a voluntary add-on to Social Security, instead of a mandatory replacement. What free-market conservative could be opposed to that?"

I think everyone needs to read this article.

http://www.nytimes.com/2006/12/28/business/28scene.html?fta=y&pagewanted=all



When you are out of a job, with no insurance, when you have no health care.....how do you "change your behavior in a favorable manner."??

I think these people live in a world of unreality.

The article quotes Gene Sperling at the Center for American Progress, which parrots the working together with the Republicans mantra. And he refers to Reagan and Gingrich as bipartisan. Oh, my.

http://www.americanprogress.org/issues/2004/01/b289151.html



I am beginning to equate the "ownership" with "you are on your own."



Sperling need have no fear. The Democratic think tanks have now aligned with The Heritage Foundation....talk about bipartisan?

In 1983, in the wake of another failed attempt to gather public support for privatization, Cato published an influential paper titled “Achieving a Leninist Strategy.”14

The authors start by acknowledging that Social Security is a popular program, so head-on approaches to dismantling it are unlikely to be successful. Instead, they recommend the “Leninist Strategy” of the title... they suggest:

1) Mobilizing a coalition of folks who’d benefit from privatization (banks, investment houses, and other financial institutions).

2) Continuing public “education” aimed at discrediting Social Security and talking up privatization.

3) Creation and promotion of financial savings alternatives (e.g. 401Ks, IRAs) to get people accustomed to using them.

4) Splitting potential coalition supporters of Social Security, such as current and future recipients: “…the strategy must be to propose moving to a private…system in such a way as “to…neutralize…the coalition that supports the existing system.” Thus, older folks would be told their benefits wouldn’t be cut, making them less likely to mobilize to help protect benefits for the young.

All this has happened in the years since.

Your quote:

"Splitting potential coalition supporters of Social Security, such as current and future recipients: “…the strategy must be to propose moving to a private…system in such a way as “to…neutralize…the coalition that supports the existing system.” Thus, older folks would be told their benefits wouldn’t be cut, making them less likely to mobilize to help protect benefits for the young."

They have done a thorough job of pitting the young against the old.

There will come a time that the people will understand.

hat will be when the younger generation finds out they are responsible for their parents who used to have Social Security and Medicare.

Because if they start this stuff, it will impact what people who are already on the program get.

Thanks for your research. I see you are getting some blasts from the ones do it best. Hang in there.

Same tactic used in union busting. Gee, imagine that.

to using them.

Thanks for that statement.

Down with the DLC --- and all their candidates!!!

I cannot believe Hillary thinks Democrats are actually supposed to vote for her. Anyone who tosses about terms like "dream accounts" is too full of their own crap to take seriously.

The DLC is NOT A DEMOCRATIC entity. They ARE the GOP elites by a different label, why should anyone support or vote for any of their members, like Hillary is beyond me.

If Hilldog is elected, she will destroy Social Security.

translation from doublespeak....Congress needs to figure out a way to steal the vast and healthy SS reserves without putting an IOU in its place to fill the the bureaucratic feeding troff and not have to pay it back. Putting SS in private hands was the best way to achieve this but the people woke up and balked and it remains to be seen whether privatizing will in the end be forced down the throats of we the people. The vast resources of a healthy and vibrant SS system have already been plundered and replaced with a used piece of toilet paper in its place, a dubious IOU. They are looking for a way to hide the robbery so calling it insolvent (a usurious lie} is the first step to completing and camouflaging the theft. So you know any politician who is saying SS is insolvent is in on the robbery.

nt

retirees back in 1983 that the SS tax increases that were supposed to fund the Baby Boomers (of which I am a late member)social security.

Social security was meant to keep oldsters out of abject poverty ever if bad things happened to them, whether it was their fault or not.

Just keep the promises, Hillary, and forget the new stuff.

If she's the candidate, I simply do not know if I'll be able to hold my nose for her with this abominable and duplicitous proposal.

Same thing. The "plan" is to eliminate the defined benefit aspect of Social Security and replace it with "Dream Accounts" where the risk is placed on the individual.

Wall Street wins through the fees they collect and executives win because increased demand drives up stock prices and the execs cash in on their options.

Same song. Different verse.

That I have paid in.

Tired of worrying that my money went to pay for the wars in Colombia, Iraq or Afghanistan.

Tired of wondering just which Wall Street fat cats would take my money and put it into a company whose rating would be pure and good for let's say two and a half years and then it would be cashed out Enron style.

JUST GIVE ME MY MONEY. The 15% that I had to work for so hard as an independent contractor.

That's all I want. Then these policy wonk types can go use their enormous brains "solving" some other problem.

Updated reply:

I thought she was intending to privatize Social Security. There is no mention of it in the "Dream" Initiative. I was worried that she plans to siphon off $$ from it to support this new initiative.

And I opined "No wonder she has Rupert Murdoch behind her. She's a privateers dream." That still may be but.. see my next comment here..

I do not support HRC for president, but in all fairness, we have to look at what she has said here:

HrC: "Finally, the bedrock of my retirement savings agenda is a fundamental commitment to Social Security. I don't think there's any doubt that we've got to fight and finally bury the idea of privatizing Social Security. It is one of those bad ideas that deserve to be totally buried.

(APPLAUSE)

When I am president, privatizing Social Security will certainly not be even discussed. </blockquote>

Perhaps the
"Dream Accounts" are in lieu of real pensions which corporations are loathe to provide. It is still bad tht everything is moving away from real pensions. But it does not appear she is intending to gut Social Security. On the other hand, Bill did toy with the idea."

Source, HRCs website.

hence the name. This plan sucks just like all the other "privatizations" scams. Thanks for the heads up MF.