1) Social Security is Financially Sound
According to the Social Security trustees report, the standard basis for analyzing Social Security, the program can pay all benefits through the year 2042, with no changes whatsoever. ,,,,Social Security is more financially sound today than it has been throughout most of its 69-year history
2) President Bush's Social Security Cuts Would Be Large
The proposal that President Bush is using as the basis for his plan phases in cuts over time. A worker who is 45 today can expect to see a cut in guaranteed benefits of around 15 percent. A worker who is age 35 can expect to see a cut in the guaranteed benefit of approximately 25 percent. ,,,
Private accounts will allow workers to earn back only a small fraction of this amount. For example, a 15 year-old can expect to make back approximately $9,000 from the $200,000 cut with the earnings on a private account. If this worker retires when the market is in a slump, then it could make their loss even bigger.
3) Imaginary Stock Returns Don't Offset Real Benefit Cuts
Proponents of private accounts have often used highly exaggerated assumptions on stock returns to argue for the benefits of private accounts. Even at the height of the stock bubble in 2000, when the price to earnings ratio in the market exceeded 30 to 1, many proponents of private accounts assumed that stocks would generate 7.0 percent real returns annually. This assumption was absurd on its face - ....
Given current price to earnings ratios and the Social Security trustees' profit growth projections, real stock returns will average less than 5.0 percent annually. Some proponents of private accounts are still using exaggerated stock return assumptions to advance their case.
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