Social Security plan invites suspicion
BY LEWIS W. DIUGUID
Knight Ridder Newspapers
(KRT) - An older, retired man explained the sequence of our financial discontent. The savings and loan industry went first into the floodwaters of graft and corruption.
The man and I both suffered in that 1980s fiasco of corporate greed.
The stock market swoon of the late 1980s followed. Much more recently came the dot-com bust and mammoth corporate graft, including Enron and WorldCom. Many folks watched their savings and hopes for a comfortable retirement vanish.
Company pensions are terribly underfunded. Their stock and bond investments are producing pathetic yields, leaving the pension funds with lower earnings to pay benefits. Corporate raiding of the funds hasn't helped. Neither has the rising number of retired workers drawing on the accounts.
Businesses that go belly up are off-loading their pension responsibilities onto the federal government, which can't accommodate the increasing burden. Rising mortgage rates threaten the building boom while stagnant interest earnings until recently were forcing retirees and workers to "eat their seed corn" of savings instead of letting money they had socked away grow.
The retired man lamented that President Bush now is worrying an already financially skittish public that he plans to go after the one thing people thought they could bank on: Social Security. No pot of money in private or public hands is sacred or safe anymore.
Years of paying taxes into Social Security with the hope of collecting retirement are at risk under Bush. The president and corporate interests, which fueled his campaign and lavish $40 million inauguration, plan to raise millions of dollars to try to sell the public on private Social Security accounts.
The concept feeds the greed - both of Americans who think they can better handle what's rightfully theirs and big-money interests that will entice gullible individuals.
But people should be suspicious of the ongoing PR blitz like the one that derailed a universal health-care plan pushed by then-first lady Hillary Clinton. If that much effort and money are needed to sell people on private Social Security accounts then the businesses behind the push are going to be seeking their share of returns on honest people's investment.
This set-up smells like the stench still pouring from the weapons of mass destruction scare used to sell us on the Iraq invasion. It was a hoax that continues to cost this country billions of dollars and too many lives.
Launching any campaign to privatize Social Security fits with the Bush administration paying conservative commentator Armstrong Williams $241,000 to sing praises for the No Child Left Behind Act. That underfunded law is sucking the life out of public education.
Private accounts would do the same to Social Security. It faces a long-term financial crisis. The soon-to-retire baby boom generation will swell the ranks of those drawing benefits.
That will create too many retirees and other beneficiaries pulling more money from Social Security than it has people paying in to keep the system afloat. The Social Security Trustees project Social Security going into the red by 2017.
I'll be age 62 then - but the eligible age for early retirement will likely be higher. The plan now is to increase the regular retirement age to 67. My contemporaries and I may never get to see or taste the Social Security carrot that we helped grow.
Some Democrats advocate raising taxes to keep the aging system going. Bush wants to ask Congress to let younger Americans put part of what they'd pay into Social Security into private accounts offering investment options. But the start-up costs could be $2 trillion.
That and the risk of individuals' losses in private account investments seem ludicrous, especially with a multibillion-dollar war raging and a record deficit that younger workers must bear.
The AARP opposes private Social Security accounts. I support that action, especially as I advance this year to be eligible to become an AARP member.
But like a lot of solidly middle-age workers in an AARP survey, I don't plan to give up employment when I reach retirement age. Unlike the retired sage who schooled me on today's scams, we'll work because it's the only way to keep up with health care and other costs.
We'll work out of fear of poverty. But fear isn't a good motivation. Yet in these uncertain times, fear is about all there is.
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ABOUT THE WRITER
Lewis W. Diuguid is a member of The Kansas City Star's Editorial Board. Readers may write to him at: Kansas City Star, 1729 Grand Blvd., Kansas City, Mo. 64108-1413, or by e-mail at Ldiuguid@kcstar.com.
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