Do you remember when Republicans tried to privatize Social Security?
You may remember that it was fairly recently, and while that is true, this idea has been on the Republican drawing board for a very long time.
The concept is intriguing. Instead of the ‘boring old government’ giving me a ‘boring old rate of return’ on my money, why not invest it in the exciting stock market and retire rich? Nobody handles money worse than our government! Make me rich!
Is there something wrong with Social security? If not, why would Republicans want to change the funding of a successful program?
Hmmm. Do you suppose some Wall-street execs got in the ear of some (or all) Republican congressmen?
Is there any chance they didn’t?
Think about it, billions & billions in ready cash. What would that influx of money do to the stock market? It would hyper-inflate all manner of stocks. The CEO’s of those companies would look like geniuses.
Remember, too many CEO’s have contract incentives to promote short term gains. In some cases, a surge in the stock price can mean tens or hundreds of millions of dollars in bonuses being paid to a single CEO, so CEO’s have great motivation to access the mass of cash that is Social Security.
Does the image of stock prices rising excite you? It should, but only when the rise is due to actual corporate value. Increasing the price of a stock is significantly different than increasing the value of a stock.
Artificially inflated stocks will inevitably collapse. This, of course, is what we are witnessing now.
If we switch to having people invest their own Social Security money, some will gain, and some will surely lose. All stock market investments are risky. Even without a crash or recession, some people will lose money.
What happens to these people? Do we guarantee THEM some minimum income? If so, you are encouraging people to make high-risk investments. When more people opt for high-risk, more will fail, and the more that must be financed for their bad decisions.
Of course, we don’t HAVE to guarantee them a minimum income. We could just ignore them, and let them live on the streets. They would only have themselves to blame for being such poor stock-pickers.
Because of the current financial disaster, Republicans have backed away, but only temporarily, from the push to put your Social Security money in the market. But don’t be surprised if some reintroduce it soon, as a way of ‘revitalizing Wall Street’.
And know for certain, when things get better they will try to sneak this past us again. They will again try to scare you with the word ‘socialism’ and by saying ‘government is the problem, not the solution’.
It was simple corporate greed that led to the current crash. Do we think this thirst for instant riches has magically gone away? Nope. These money managers make Trump look like Mother Teresa.
And they have the ear of the Republican party.