Nerve Endings Firing Away

If you evince even a slight interest in U.S domestic policy (not many desis who incidentally are the majority of my readers do; hence this disclaimer), then you surely must have gotten a whiff of the most drastic changes that Bush has planned for his next term. If Iraq was the trump card for his first term, the overturning of Social Security will be his baby for the second term. Thankfully, it was failed to win even the support of the conservatives and might be nipped in the bud. NY Times ran an excellent editorial few weeks back on this issue.

Social Security is a federally-administered program funded by almost 6-12% of your income tax. It provides almost a third of the pre-retirement income to the retiree and provides for an inflation-free income for the rest of the retiree’s life. Bush, on the other hand is advocating replacing it with a system centered on private accounts, harping on Republican ideology of less government.

“The administration wants workers to divert some of the payroll taxes that currently pay for Social Security into private investment accounts, in exchange for a much-reduced government benefit”.

Privatization which works excellently otherwise, doesn’t quite make the cut in redistributive policy decisions. The individual investors thus created might be expected to play the stock market. But as the Times puts it eloquently:

“The stock market’s historical returns – some 7 percent a year – are predicated on a hypothetical investor who bought an array of stocks in the past, reinvested all dividends, never cashed in and never paid commissions or fees. That’s not how investing works in the real world”.

The wealthy with the advantage of professional investing advice might unfairly benefit from such a system and the only possible winner as seen by the Times, is Wall Street by charging for managing millions of new accounts thus created. Expect Bush to elaborate on this dicey issue during his State of the Union address today.

This dilemma might be ponderous for the Libertarians (cartel members?).

Finally, to end it off with a light note, Fafblog has this amazing satirical piece on the supposedly imminent Social Security crisis, as seen by Bush [via Boing Boing].

Q: Is Social Security in crisis?
A: Yes it is! And if we don’t do something right now it is going to EXPLODE!
Q: Oh no!
A: In forty years.
Q: Then what happens?
A: Then Social Security runs out of money! That means either your benefits are reduced, or all Social Security everywhere explodes in a giant fireball and we will have to run away from the fireball and jump away from it in slow motion to escape!
Q: Tell me more about this crisis in gritty detail!
A: The fireball is huge and loud and expensive and there is grinding guitar music on the soundtrack informing everyone that we are bad, bad dudes! The radiation turns all old people into very poor mutants who must scavenge and eat each other for food. Eventually the robots come: they are unstoppable. What has science done!