A Stitch in Haste

Looking back at the Bush Social Security reform plan — and forward to the (oddly similar) Obama version.

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The "burdens" of switching from traditional pensions to 401(k) accounts hardly exist in a vacuum.

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The Urban Institute:
Traditional social policies to bolster income for the poor aren't enough to meet 21st-century economic realities, write Signe-Mary McKernan and Michael Sherraden in the new book Asset Building and Low-Income Families, from the Urban Institute Press.
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Their analysis finds that building wealth — putting money in a bank account, saving in a retirement fund, [...]

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To review: Social Security can be viewed, conceptually, as either a system of compulsory retirement saving, or as an intergenerational wealth transfer. It cannot, however, be viewed as both simultaneously. Its defenders must pick one paradigm or the other and run with it, lest they be rightfully dismissed as disingenuous.
Furthermore, while Social Security (as a [...]

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Or, perhaps better stated: Do the Democrats even understand the implications of their proposals?
Powerful House Democrats are eyeing proposals to overhaul the nation's $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. [...]

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Barack Obama, October 27:
No matter what Senator McCain may claim, here are the facts – if you make under $250,000, you will not see your taxes increase by a single dime – not your income taxes, not your payroll taxes, not your capital gains taxes. Nothing. Because the last thing we should do in this [...]

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The Social Security Administration recently announced its annual (and automatic) increase in old-age benefits: 5.8%, the largest in recent memory, thanks to the recent (and temporary) oil price spike.
Of course, as is always the case, year after year, one has to read a bit further down to find any mention of the flip side of [...]

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John McCain has yet another proposal to save the financial markets:
John McCain proposed Friday that the elderly be allowed to hang on to the stocks in their retirement funds and not be forced to sell them in a bad market.
The Republican presidential candidate would suspend requirements that people start selling off retirement investments when they [...]

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The Urban Institute analyzes income inequality in post-retirement America:
Without savings, low-wage workers will have to rely on other sources of retirement income, such as Social Security and pensions. Yet these sources of retirement income are based on earnings. The Social Security benefit formula replaces a greater share of earnings for low-wage workers than for higher-wage [...]

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They support it:
The Congressional Budget Office reported on Tuesday that the government's finances are deteriorating rapidly: the budget deficit for this year is expected to reach $407 billion, more than double last year's shortfall, and to exceed $500 billion in 2009. The takeover of Fannie and Freddie, necessary though it is, will add to the [...]

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