I hope you had the chance to hear our interview with Congressman Paul Ryan on the Morning News Focus yesterday. He joined Bob to talk about his new "Roadmap for America's Future". I applaud Ryan for actually proposing that Congress take proactive steps to fix some of the problems we face today.
I'm sure Ryan will take the greatest amount of heat for the part of his plan that would allow younger workers like myself to invest a third of our Social Security savings in a government-administered investment fund--just like Congressmen can do themselves. Alarmists---like AARP will pillory Ryan for "putting Social Security funds at risk". Never mind the fact that there is no way my generation can put enough into the SSA fund to keep up with the payments that will have to be made to Baby Boomers over the next 25-years. And it would be nice if I could get better than negative one percent growth on my retirment money.
Even if we didn't go to socialized medicine, Medicare and Medicaid are threatening to overrun the economy in the future--taking up 40-percent of all government expenditures. Ryan's plan would give working families tax breaks for buying their own insurance--and would set up 95-hundred dollar Medicare payments to help seniors and the poor to go out and get their own private insurance as well. That would go a long way toward shifting some of the future health costs back into the private market and off of the taxpayers backs.
Of course, everyone else in Congress will attack Ryan's plan. It would draw the ire of every special interest group that pays for Congressional re-elections--as they roll out the tired old scare campaigns about how we can't "privatize" Social Security and how nobody can be trusted to make their own health care choices--because we all know that the government knows so much more than the rest of us. As least Ryan is trying to get us off the slippery slope that threatens to bankrupt us all.
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That nutty liberal Steve Dedow has a "don't privitaze social security" on his anti wal-mart show. If he's against privatizing social security, I'm for it.
ReplyDeleteAren't we already bankrupt? The entire 'economic stimulus package' is more money borrowed from China so we can go to Wally World and buy more Chinese stuff.
ReplyDeleteROBERT REICH: The best thing to have happened during the Bush administration is something that did not happen. We did not privative Social Security.
ReplyDeleteHad we done so, boomers facing retirement over the next few years would be even worse off than they are today. Now they're struggling with pension plans worth less than they counted on and home values that are tanking. At least they can rely on a monthly Social Security check.
But had we privatized, they'd be totally reliant on the stock market, and look what's happened to the market. Compared to stock values ten years ago, the S&P 500 has risen a little over 1 percent a year, adjusted for inflation. Treasury bonds have done better. Go back nine years, and there's been no gain at all.
Yes, I know, it's been a rough time. First the tech bubble bursting and then 9/11 and then Enron and then the housing bubble bursting and then the credit crunch, but that's my point. We can't necessarily rely on the stock market.
And anyone who thinks the market will shortly regain all the ground it's lost over the last few years, has been drinking Wall Street cool-aid. The Fed can only do so much. The stimulus package is a laugh. Consumers paying much more for fuel and food and health insurance, with shrinking paychecks, large debts and declining home values, won't be turning around this economy any time soon.
Now sure, the stock market has done well over the past half century, but there have been decades, like the 1970s and this one so far, where it's been a disaster. That's why we have Social Security, so that if your timing is bad and you get caught in a downdraft, you still have something to fall back on in retirement. If we had privatized, you'd have nothing to fall back on.
You'd crash.
Robert Reich teaches public policy at the University of California, Berkeley. Farther down on his resume, he was the Secretary of Labor for President Clinton. His latest book is called "Supercapitalism."