On Thu, 6 Jan 2005 21:35:03 -0500, Erik Reuter <[EMAIL PROTECTED]> wrote: > The route to real pensions reform > Jan 6th 2005 > >From The Economist print edition > > http://www.economist.com/finance/PrinterFriendly.cfm?Story_ID=3535838 > > Progressive indexing of retirement benefits by wage level, argues Robert > Pozen, is the key to Social Security reform > > UNDER the slogan of reforming Social Security, America's state pension > system, George Bush wants to allow workers to allocate a modest portion > of their Social Security taxes to a personal retirement account. Some > Republicans want to do this without enacting broader reforms to the > state pension system. The result, as The Economist discussed on December > 11th (see article), would be a sharp increase in short-term federal > borrowing without any decrease in the system's huge long-term deficit. > Some Democratic opponents of personal retirement accounts advocate a > complex combination of tax increases and benefit reductions to eliminate > Social Security's financial hole. But the current Congress is not likely > to increase taxes, or enact reform legislation containing only the > political .pain. of benefit reductions.
Why might Posen - former banker and director of mutual funds, be supportive of federalized personal retirement accounts and a reduction in SS benefits? Investment pros see bonanza Social Security proposal would add billions to investments and fees The prospect of 100 million Americans each having $1,000 of their Social Security contributions to invest every year has investment professionals salivating at the potential financial bonanza. About $100 billion a year would be freed up for stocks, bonds and other investments under a tentative plan President Bush has floated to fix the Social Security retirement system by creating private investment accounts. The fees paid to brokers and money managers could run into the billions. President Bush is expected to unveil the plan in late February, with administration officials eyeing investment accounts that would hold two-thirds of workers' annual payroll taxes. http://www.chicagotribune.com/business/chi-0501090320jan09,1,6035889.story?ctrack=1&cset=true http://tinyurl.com/649ly [The two-thirds is misleading - most workers will see a reduction of about two-thirds of their SS taxes replaced by a mutual fund benefit account but the employer contribution would remain all SS.] Follow the money - which can be a bit difficult in supportive privatizing articles in the media. I have yet to see a media account that does not simultaneously have pessimistic future economic growth when mentioning SS income while this same economy has booming growth when illustrating the mutual funds portion. Gary Denton http://elemming2.blogspot.com _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
