Eric Seymour is repeating a common argument of those who support social security privatization - it’s “voluntary”:
And give yourself 10 points if you said that under every proposed plan private accounts are an option. If you want to stick with the government’s scheme, you are free to do so.
This is, of course, literally speaking, true. You have the option of NOT investing your 4 percent in the stock market. However, it’s not much of an option, considering the fact that the rumored Bush plan would index benefits to prices rather than wages, resulting in an almost 50 percent cut in benefits for younger workers. OUCH!
So in effect, you’re going to be forced to “voluntarily” opt in to the privatization system and try to claw back to the same level of benefits as you would get under the current system.
Unfortunately, even this is unlikely, as projections show that even with private accounts, on average only 60-70 percent of the current benefit levels would be recouped. Which, by the way, is short of the 73 percent which can be guaranteed by the current system even if it “goes bankrupt.”
Maybe we should just call Mr. Bush’s plan what it is - the “Dog Food Retirement Plan.” Because if you’re unfortunate enough to not be able to save for your own retirement, that’s what you’re going to be eating if it gets passed.
