Social security is essentially a forced savings plan that helps Americans prepare for the senior years. Privatization offers no solutions. It was tried in the UK and seniors lost half of their benefits before the private pension program was scrapped. Other nations such as Chile have also dumped heir private pension programs.
The decline of pensions is likely well past the tipping point already. No so long ago, the defined benefit pension--guaranteed retirement income--was a prevalent aspect of the U.S. financial scene. But no more.
In 1980, 38% of Americans had a defined benefit pension as their primary retirement plan. By 1997, just 21% of Americans had such plans, according to the Pension Benefits Council. That percentage is certainly lower now, and more and more plans have been passed off to the Pension Benefit Guarantee Corporation (PBGC) a federal agency that insures pensions, but which does not necessarily pay the benefits retirees expected.
The 401K and Roth IRAs were never designed to be pension plans. They were designed to be savings plans. The IRA fees are not regulated and many people who lost their jobs in the Great Recession, found out that a third of their assets had disappeared because of management fees.
Social Security is easy to fix, and that is what the right wing is afraid of. This program has been paid for by the Middle Class since it was founded because the FICA cap exempts the income of billionaires and millionaires form the brunt of the tax.
Since the top 1 per cent of Americans take in 50 per cent of the Gross National Income. the FICA tax should be reformed to shift more of the burden to the affluent. The Medicare FICA tax has no cap and is applied to 100 per cent of a wage earner's income.
The Party of the 'Have Mores knows' the FICA tax has to be reformed, but they will resist it like they did with the health care reforms.
What is the alternative to Social Security with public and private pensions only covering 1 in 5 Americans?
America is one of the wealthiest nations in the world and can afford to provide old benefits to seniors. Keep in mind this program was founded during the Great Depression. The economics today are not as dire as they were in the Great Depression.
Why does the the right want to privatize Social Security? Wall Street would love to loot the Social Security Trust fund. Management fees for a privatized system would generate billions for corporation, but not for seniors.
The 'man" would also have seniors under his thumb and the distribution of wealth and income that already favors the affluent would become even more lopsided.
The GOP is going to get bruised in this battle. Eight five per cent of Americans support Social Security and 72 percent strongly support it.
source: Forbes Magazine
Bold emphasis mine
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