Proponents say the necessary amount of borrowing could vary widely, from hundreds of billions to trillions of dollars over a decade.
Why is such massive borrowing needed?
Under the current system, the payroll tax levied on workers goes to benefits for people who are already retired. Personal accounts would be paid for out of the same pool of money; they would allow workers to divert a portion of their payroll taxes into accounts invested in mutual funds or other investments.
The money going into the accounts would therefore no longer be available to pay benefits to current retirees.
So they want to take a reasonably solvent, quite workable system, and instead of fixing it, break it entirely, taking huge loans to finance it.
The beneficary here is Wall Street and the ruling elite. They are the ones who will make the money on the loans, and charge fat fees to “manage” the privatized investment accounts.
This is yet another Bush-led transfer of money from the middle class to the already wealthy. Retirees will be hurt, pensions slashed, all so a tiny few can get wealthier. Nowhere in these plans is an explanation of how this will aid retirees and preserve pensions.
Does your Social Security money feel safer knowing Bush wants to privatize it? I didn’t think so.