http://www.nytimes.com/2004/12/23/business/23scene.htmlHOW can Americans be anything but confused by the complex debate over the privatization of Social Security? Investing part of the payroll taxes we pay in stocks and bonds to produce a personal nest egg is alluring. But until there is a detailed plan to analyze, we cannot know the true consequences.
At last week's economic summit meeting, the Bush administration began to give clues as to its plan. The administration appears to be leaning toward the Reform Model 2 proposed in December 2001 by its Commission to Strengthen Social Security, which was under the direction of former Senator Daniel Patrick Moynihan and Richard D. Parsons, the chief executive of Time Warner.
The plan is disheartening. Based on an analysis done by the Social Security Administration and the Congressional Budget Office, it will result in significant benefit reductions from the levels promised under the present system.
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And there are other costs to privatization. Consider the potential impact from borrowing as much as $2 trillion, which many experts see as the projected transition costs to cover the gap that would arise in payments to current retirees and those retiring soon once workers started diverting into private accounts some of the payroll taxes used to pay benefits.
Financial markets may not absorb that debt without interest rates rising and the dollar falling.
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Fits right in with the plan to destroy the US economic future.