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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DizzyG who wrote (671493)	2/7/2005 1:45:14 PM
From: DuckTapeSunroof	Respond to of 769667

Yes, Diz, I both read and posted here the corrected article when it came out: "What Bush did not detail is how contributions in the account would reduce workers' monthly Social Security checks. Under the system, described by an administration official, every dollar contributed to an account would be taken from the guaranteed Social Security benefit, with interest." "The person comes out ahead if their personal account exceeds a 3 percent real rate of return, which is the rate of return that the trust fund bonds receive," the senior administration official said. "So, basically, the net effect on an individual's benefits would be zero if his personal account earned a 3 percent real rate of return. To the extent that his personal account gets a higher rate of return, his net benefit would increase." So, in essense what they are saying is that 100% of the investment risk of any 'private accounts' would stay with the individual (ie, if your account under-performed the traditional accounts it's 'tough luck'....) But, to the extent that your account performed better then the expected real return rate of Treasuries of 3% (even though the SS administration actually only projects a 2.4% real return on the projected period... because they are not projecting that the markets will be that robust), that extra gain that is above the 3% compounded return rate would belong to the individual account holder --- unless Congress enacted taxes on any 'excess returns'.