You'd think I could just leave it alone

I really should stop myself, but I was reading another one of those absurd Yahoo news reports.  This one was in their Finance section, talking about Social Security.  The news stories themselves are usually pretty innocuous stuff.  Nothing that took too much thinking to compose, but if the author stays away from trying to interpret the facts they have copied from Wikipedia then mostly harmless.  It is the moronic comments that get my blood pressure going.

Now the idiots who simply make fun of the the left, or the right for that matter, I can just gloss over.  It is the ones who parrot solutions that they have no comprehension of that I find most irritating.  You know the old adage. better to be thought a fool than to open your mouth and confirm it.

And the one 'solution' that I keep reading is to privatize Social Security.  I wonder how many of them (those not being paid by Karl Rove and his ilk) have any idea what that really means.

Put simply, the goal of Social Security is to replace some subset of your income when you are no longer able to work.  It does that by levying a tax on both employers and employees, and investing the money in US government debt.  That is nowhere near the highest possible return on the money, but it is the safest.  The cost of overhead is somewhere between 0.7% and 1.0% (I have seen figures quoted in that range from a number of sources).  How would you replace that.

Tell everyone you're on your own?  That's like telling everyone that they have to be their own doctor!  Imagine a minimum wage cashier in 7-11 being told to invest this money for their retirement.  Stock market, gold futures, mutual funds, or any Ponzi scheme that comes along, it is all up to him.

I do invest for my retirement, and doing so intelligently is not an easy thing.  I pay for advise not because I am stupid but because I am not a professional investor. I maintain a diversified portfolio of stocks and mutual funds.  The older I get the less time I would have to replace this money.  And if the market should tank, just before I have to retire, I am screwed.  But I would still survive.  If I were on the bottom rung of society, without the other assets I have accumulated in my life, it would mean homelessness.

How about government approved mutual funds?  In order to be eligible for investment, they would need to meet certain criteria.  We have seen just how well that has worked in the veterans benefits and student loan industry.  For profit colleges with absurdly low graduation rates, who exist only to suck students dry and then throw them away have been running rampant for years now.  Can you imagine the next time the debate for funding the people who would police these funds came around?

The people who are in favor of privatizing Social Security are the same ones who think we spend too much on food inspectors and who try to hamstring any attempt to rein in rampant abuses of consumers.  They continue to block the appointment of anyone to head the Consumer Financial Protection Bureau because they consider such things as contracts written in plain English to be an unfair burden on business.  You really think they will regulate the investment vehicles for Social Security?

Privatizing Social Security is just code for taking the money and turning it into additional bonuses for investment bankers.  People like me, who can afford to pay for professional advise, and have the education and the time to devote to monitoring their investments, will do OK. The people for who Social Security will be the difference between a modest retirement and living in a cardboard box, those are the ones that would suffer.

And the ones who are pushing these concept?  They know that too.

Tweet