Skeptical About Supplementing Social Security
September 17th 10:11:03 PM
The idea of universal savings accounts outside Social Security is back, as evidenced by Congressman Rahm Emanuel's Wall Street Journal commentary on September 13. Emanuel believes that the accounts are a short-term answer to the debate on retirement security. We are just as skeptical of the idea now as we were last time around, when Senator Jeff Sessions made an argument for portable savings accounts that would entitle newborn Americans to $1000. Which is to say that we believe Emanuel's plan is worthy of discussion and we welcome details. But it is also to say that we will likely find it hard to agree with his proposal. For starters, it is odd that Emanuel bases the argument for his new program on the personal saving rate, a statistic which the WSJ has all but abandoned. On February 3 of this year the newspaper reported, "For our part, these columns long ago began to watch a far more instructive figure known as 'household net worth.'" (See their explanation here.) And guess what? The Federal Reserve announced on Monday that household net worth increased by 2.1% during the second quarter of 2007, or nearly double the rate of this year's first quarter. Perhaps Mr. Emanuel should have held off on his commentary. Of course, the substance of our disagreement stems from Emanuel's failure to address the real issue: Our generation will be in trouble because Social Security will not meet more than 75% of its promised benefits to us. In light of this, a new mandatory savings plans seems a strange consideration. Why not get to the root of the problem?
Posted by Ryan Lynch
Comments
That's an unexpected take on the article. I thought it was interesting that now that the cards are starting to be placed on the table, we see that the Congressman believes these types of accounts are safe enough for ordinary americans. So safe, in fact, that he sponsored a bill to make them "opt-out" instead of "opt-in".
I applaud that, but let's not turn right around and start the fear mongering when we talk about accounts as PART of social security.
If he thinks these accounts are safe enough for an opt-out type plan, they're safe enough to diversify social security away from the all-your-eggs-in-one-basket (government promises) current system.
Ryan, I think your persuasive argument doesn't come until the last paragraph... if the Congressman wants to push opt-out, add-on accounts to Social Security, i'll stand right behind him. But let's be sure to draw attention to the fact that it's a huge smokescreen to avoid dealing with the real problem.
Posted by Jeremy on September 18th 12:23:02 AM
recently, i was at a townhall-type meeting with Presidential hopeful Senator Sam Brownback, and a guy from AARP was asking the Senator about this sort if thing, addressing the need for true retirement security for future generations. of course - he DIDN'T mean getting to the root of the problem,(i.e. - Social Security!) but instead was hoping the Senator would endorse some sort of supplement to Social Security...I just find it appalling that so many people KNOW SOcial Security is failing, yet insist on coming up with these other alternatives...it especially torques my wrench when the alternative plans they suggest are ones that would force me to continue to pay into a failing system of retirement (Social Security) AND a NEW SYSTEM. that just is silly.
Posted by evan on September 18th 01:30:43 AM
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