Uncivil Rights

A BLOG rife with wit, sarcasm, and the endless joy which comes from taunting the socialistic and unpatriotic liberal left. Logical thoughts and musings ONLY need reply...unless you're really, really funny. You have the Uncivil Right to be an IDIOT. "Give me LIBERTY, or give me DEATH!"

Sunday, February 20, 2005

The Hypocrisy of and at the AARP

The AARP is strongly against Social Security PSAa. They claim that putting money in the stock market is as good as throwing it away. They claim that it's not broke, it won't go bust for a long time, any changes will weaken the current system. The fact is, it will go broke in the future. Are we to leave that problem to our kids and grandkids, or fix it now?

The Social Security stystem as we know it is NOT a guarantee. Benefits are NOT guaranteed. Yet all the rhetoric to convince us NOT to change it says these benefits are guaranteed.

The fact is, all the money in the "trust fund" is non-existent. It is in treasury bonds that must be paid, to the tune of $1.6 trillion. Bail out plans are said to cost $2-$3 trillion, this amount for a complete fix, once and for all, and once fixed, individuals will have their own private savings accounts that are out of the reach of Congress. It will be YOUR money.

If one were to peruse the AARP website, you'd find some interesting things. The article on saving social security has some points to consider.

Second, diverting a portion of Social Security money to private accounts means that there would be fewer dollars available to pay Social Security benefits. That would leave the whole system with less of a reserve, as well as less cash on hand to pay beneficiaries. This situation would lead to hard choices: cutting benefits, raising taxes, or doing none of the above and watching the trust fund run out of cash sooner.

According to a letter entitled "The Consequences of Social Security Privatization," signed by Congressmen Charles B. Rangel (D-NY) and the late Robert T. Matsui (D-CA), diverting a portion of workers' current Social Security contributions to private accounts "blows a hole in the Trust Funds…and directly threatens our ability to pay current retirees." They predict that under privatization the trust fund reserves will be wiped out by 2021, a full 20 years sooner than if the system had been left alone.

This is where the $2-$3 trillion comes in. It is to bridge the gap while the PSAs go into effect. There will be no reduction in benefits and no raise in taxes due to the transition costs. But they don't tell you that.

Myth: Individuals will get higher returns with private accounts.

Surely you can do better with your investments than a big bureaucratic government agency can, say those who favor private accounts. Well, the truth is, some people may do better. But who's going to pay for the care and feeding of all those who do worse?

"Under privatization, current workers will have to pay three times," says Certner. "Once to ensure the benefits for those currently at or near retirement, once for themselves, and once more for those whose investments didn't pan out." In the current Social Security system, the risk is near zero. You know it will be there regardless of what the market does. That's because U.S. Treasury bonds don't crash when the stock market does.

Some people will do better? The stocks and bonds available will be conservative to limit liability. Then again, it will be up to the individual to choose those options.

Myth: The Social Security reserves are only on paper.

Well, yes, but that paper is U.S. Treasury bonds, which have been earning a combined interest rate of about 6 percent a year. For more than 200 years, in good times and bad, during wars and depressions, American bonds have always paid off. They're one of the safest investments in the world. In 2003, some $80 billion, about 13 percent of Social Security's total income, came from the interest from these bonds.

First they claim it's a myth, then they say it's true. Then they claim American bonds HAVE ALWAYS PAID OFF! 6% a year is much better than 1.8% that SS is getting now, isn't it?

I guess the argument that really pisses me off is when AARP claims the market is risky. How risky is it? If it is too risky to put your retirement funds, then why is AARP offering THAT service to its mebers?

As the only investment program specifically for investors 50 and over, the AARP Investment Program's information, services, and investment products are designed to help you prepare for whatever may be on the horizon.

The fact to which peole MUST pay attention is that the PSAs are OPTIONAL. You can take the option to put a portion of your payroll taxes into a PSA, or you can continue in the current system as is. The best part is, once you are in a PSA, that money is YOURS, and Congress will NOT be able to spend it.
totalkaosdave, 8:24 AM