Republican U.S. Senate candidate Pat Toomey defended his proposal Thursday to ensure Social Security's future with a form of privatization and accused Democrat Joe Sestak of distorting his position.First Toomey's proposal: No change for anyone getting Social Security benefits now.
"I've put a proposal on the table and the result is my opponent has mischaracterized it, attacked me for it and demagogued on it while he has said nothing about the long-term structural problems we've got with entitlements," Mr. Toomey told The Times-Tribune editorial board.
But (as we've seen before) for younger workers
Mr. Toomey would allow younger workers to voluntarily divert a portion of their Social Security payroll tax into private savings accounts they would control and invest any way they want. A young worker who did not want to do that could stay with the current system of a guaranteed benefit.But it's not "anyway they want" is it? Congressman Wall Street would require the private accounts to be managed by Wall Street - and those requirements seem to include a schedule of some sort for moving the investments from greater risk to lesser risk as the person ages.
"Over the course of 45 years or so, the accumulated savings from putting a little bit of money away every week or every month for 45 years would add up to a very significant nest egg, and that could form the basis of a very significant portion of their retirement," he said.
Mr. Toomey said he would require the private accounts to be professionally managed with diversified investments to minimize the risk. The money would be shifted to less risky investments as a person approaches retirement age.
ut what if that person doesn't want to invest with Toomey's friends on Wall Street? What if that person doesn't want Toomey's friends on Wall Street to shift all that money around at the end of his/her life? What if that person wants to keep the money in a sack under the bed?
That person's outta luck, as the small-government/Club For Growth Toomey has already made those decisions. A conservative meme in the Social Security discussion is how the government is arrogant for deciding that it knows better how to invest a person's money. But Toomey's plan does the same thing - only this time Wall Street gets to play with the funds.
All in all a good plan from Wall Street's man, doncha think?
The Times-Tribune goes on:
Critics say removing the money to create private accounts would require massive new borrowing to pay current benefits, and people could lose in the stock market and be left with a diminished retirement. They point to the stock market meltdown of two years ago.So Toomey's plan would increase the deficit now with the massive new borrowing needed to cover the Social Security shortfall his plan will obviously cause. He says that eventually borrowing will no longer be required. But paying it back will. Where will that money come from?
But Mr. Toomey said massive new borrowing will be required anyway to keep current benefits the same once the trust fund is exhausted. Borrowing would no longer be required once the number of retirees in the traditional system is small enough to reduce what the system must pay out to a figure that's less than the taxes the fund takes in.
He argues that would happen because retirees in the traditional system would want to shift once they see people with private accounts earning more for retirement.
Toomey doesn't say. In the mean time massive amounts of money will have been diverted to Wall Street.
Pat Toomey - Social Security privatizer and ever lasting friend of Wall Street.