Social Security Piratizationposted by Jazz at 2/03/2005 06:50:00 AM
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On to the meat of the deal. The key piece of smoke and mirrors involved here is Dubya's charming new buzz phrase, "Benefits Offset." That's fancy politispeak for "You pay in... we keep."
Here is Atrios, explaining the low down on the Benefits Offset. Listen up... this is important and will affect you directly.
That's the phrase of the day, the week, the month folks. It means that your private account isn't so private and your personal account isn't so personal. Money you put in your private accounts -- quite possibly the vast majority of that money -- will simply be taken away from your social security benefit. It appears that the WaPo people actually picked up on this:There's your "personal account" for you. It's an account all right, but it's far from being yours. The bottom line is that you get the privilege of dumping your payroll tax dollars into an investment account that makes money for Wall Street, and any possible profits realized on that "investment" are primarily channeled back into the system... not into some "personal" account which you own. And even if your account does show some huge profit, should you die shortly after retiring, the money is gone into the black hole of Washington.
Even more curiously, a "senior administration official" who briefed reporters on the Social Security proposal earlier today disclosed details of the White House plan that I don't think will play well in Peoria. Most significantly, this official revealed that most or all of the earnings from new "personal" or privatized accounts will be paid not to the holder of the account, but to the government. The senior official called this a "benefit offset." It's one way to finance the creation of these private accounts, but it's going to cause quite a political stir, I think.
A lot or even most of the money in your private account is just going to deducted from your benefits. Zero sum game.
A lot or even most of the money in your private account is not going to be able to be left as an inheritance -- you'll be required to buy an annuity upon retirement, and if you die one day later the money will be all gone.