No!! Let Wall Street Invest It For Us

Anyone calling it a Ponzi scheme doesn't know what they're talking about (via Digby): Social Security Sense and Nonsense

Just Think!

If Social Security were privatized, and your retirement money ended up in something like this, you could end up with...nothing! Bloomberg (11.28.07):

"Florida local governments and school districts pulled $8 billion out of a state-run investment pool, or 30 percent of its assets, after learning that the money-market fund contained more than $700 million of defaulted debt."

Florida School Fund Rocked by $8 Billion Pullout Amid Defaults

In a nutshell, the "State Board of Administration manages about $42 billion of short-term investments, including the pool, as well as the state's $137 billion pension fund. Almost 6 percent, or $2.4 billion, of its short-term investments consist of asset-backed commercial paper that has defaulted."

"Should the withdrawals continue, Florida's pool may have to consider filing for bankruptcy protection, says John Coffee, a securities law professor at Columbia Law School in New York. 'A bankruptcy could handle these kinds of problems if they feel they'll become insolvent,' he said."

"Coffee predicts the pool will likely file lawsuits to recover losses. 'I'd expect the pool is going to sue the people who sold them the commercial paper, saying the risks were hidden,' he said."

"Lehman Brothers Holdings Inc. sold Florida most of its now-default-rated asset-backed commercial paper. Lehman spokesman Randall Whitestone declined to comment."

Busy calling the lawyers, no doubt.

Once Again, Very Slowly

Repeat after us. Washington Monthly (10.29.07):

"(T)he number of people who either don't understand (or pretend not to understand) just how insignificant Social Security's problems are and how easily they can be repaired is really staggering.

A decade ago I used to be one of them, but all it took was a very modest amount of reading on the subject to convince me that I was off base."

Social Security For Dummies

"Considering how simple the math is, I really don't understand why so many otherwise bright people continue to be fooled by all this."

Bone up folks. It ain't rocket science.

Bamboozlement, 2007

Dean gets all crabby with the Wall Street Journal. As well he should. Beat The Press (04.23.07):

"The Wall Street Journal told readers today that, according to the SS trustees, it would take a 16 percent increase in Social Security taxes to make the program solvent over its 75-year planning period.

Most people don't know that the current size of the SS tax is 12.4 percent (6.2 percent on both the employee and employer), so when they read this article they probably thought that it would take a tax increase of 16 percentage points rather than 1.95 percentage points [ed. - which means an employee would see about a 1.0% increase in what he or she would have to pay.] under the trustees projections."

Scaring People on Social Security

More from Dean here.