Sunday, March 20, 2005

Alpo Accounts: Why Bush's con isn't working with the 20-somethings either 

I realize The Department of Changing the Subject has done a masterly job in moving the topic of the day from Bush's debacle on Social Security to the Schiavo cause celebre— but the Republican plan to phase out Social Security is a win for us—that is, a win for the kind of country we want, and the kind of life we want to lead—and so we shouldn't let it drop.

The long excerpt that follows is the only cogent discussion I've seen about Bush's plan to phase out Social Security from the 20-something perspective. It shows, quite clearly, why Bush hasn't been able to divide and conquer in that demographic, either.

Naturally, work like this is not to be found in Pravda on the Potomac or Izvestia on the Hudson, but in the Metro, the freebie I read every day on the train. J. Edward Conway writes:

I do have one request of Chicken Little: You may speak to me about Social Security all that you want, but please do not speak for me.

In a recent radio address, the president claimed his privatization plan to be “a better deal for younger workers,” and in an early February release from the White House, the president speaks of a young worker’s desire for “ownership and control.” In this same release, titled, “Strengthening Social Security in the 21st Century,” in two separate bulletpoints he claims that a personal account is good because it allows younger workers to “watch it grow over time.”

Watch it grow over time? Here is a short history of my observations of the stock market:

•1983, age 1: Stock market boom due to home computer sales and biotechnology firms. My parents buy their first house.
• 1987, age 5: Black Monday. Stock market crashes and recession begins. Dad is laid off.
• 1999, age 17: Height of dot-com era. Dad is paid mostly in stock options.
• 2001, age 19: Bubble bursts.

Dad’s stock trades in the high 70s one day, trades at around $10 a few months later. Stock options worthless, salary is cut in half, Dad quits and spends next 2 years jumping from sinking dot-com ship to sinking dot-com ship. Mom decides to get full-time job. I take out student loan to help pay for college.

• 2004, age 22: Feds investigate Mom’s company. Stock plummets.
• 2005, age 22: Bush thinks young workers want a personal account vested in Wall Street so that they can “watch it grow over time.”

What it all comes down to is risk. If I really want to be risky, I can play with Wall Street straight-up and take my chances. If I want minimal risk (which is the way the President promotes privatization), I can work with my 401(k). If I want no risk, I can stay with Social Security as it stands today — guaranteed payoffs upon retirement. An entirely separate editorial could be about why privatization doesn’t actually even solve the projected Social Security deficits in the first place. But, even if privatization was a possible solution, the young workers will never buy into it. Our 401(k) fills our need to play the market with minimal risk — Social Security today fills our void for no risk and I like no risk — President Franklin Delano Roosevelt understood that in 1935 (during the Depression!) when he made Social Security guaranteed. It baffles me why the same promise cannot be made today.
(via Metro)

Case closed. No wonder the Repubublicans don't want to talk about phasing out Social Security anymore.

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