Oct 23, 2013

Why Social Security Is Essential

     Alicia Munnell of the Center for Retirement Research explains in simple terms why Social Security is absolutely essential and why replacing it with a defined contribution plan would be a horrible idea: People are so financially illiterate that they cannot be counted upon to make rational retirement decisions and more financial education won't solve the problem.
     And, by the way, to prove her point do you, gentle reader, even know what a defined contribution plan is?

7 comments:

Anonymous said...

Yes, I do.

Anonymous said...

That's exactly the liberal view: "People are too stupid to care for themselves so we need to hold their hand and do everything for them."

What a terrible ideology. When you've made that decision, you've removed all hope.

Anonymous said...

The problem with the alternatives to SS is that they don't provide the same level of guaranteed payments. Imagine what the cost would be for a private plan that offered the same level of benefits provided by SS!!

As has been mentioned before, SS is a pyramid scheme...but it's the last lifeline for most people.

Don Levit said...

I agree wholeheartedly with Anonymous at 6:57 am. We need to empower people by providing am environment in which they can utilize their gifts, talents , and abilities. Too many people go to their graves with their music still in them.
Providing such a liberating environment will also make more people aware of what defined contribution plans are, and take advantage of their benefits!
Don Levit

Anonymous said...

Anybody who thinks that a 401k plan is a better idea that the current Social Security system is out of their mind. Nobody except a small pack of eccentric libertarians (who think the entire Social Security system is unconstitutional) advocate that. Even George W Bush, on his worst day, was not crazy enough to advocate that (he only suggested that workers be allowed to set aside a "portion" of their FICA into investment accounts).
A worker would come out ahead on a 401k if the worker died at age 64, but as the foes of the SS system keep pointing out, people are living longer.

Gayle Myrna said...

A "defined contribution plan" is a recipe for old age poverty.

Anonymous said...

Social Security is extremely important, but that may not stop them from cutting it.

In budget battles, one very important thing has changed, and I wonder if people are aware. It was bad enough when any cuts to S.S., such as Chained CPI, would only occur in the context of a "grand bargain". Now, they're talking mainly about undoing the sequester, a much narrower scope, which could still include Chained CPI. That wasn't the deal folks.

The president is wholly responsible for the sequester, which resulted from him caving during the debt ceiling debacle of 2011. And then the supercommittee deadlock lead to the sequester. The purpose of Obama's sequester was to force congressional democrats into accepting "entitlement" cuts. That was Obama's plan. In fact, he threatened to VETO any attempts to repeal the sequester!
He totally played up the devastating cuts it would have, even going to the point where he paraded people on stage with him that were suffering due to the cuts. That's the definition of despicable behavior.

So the bottom line is that now we could see S.S. cuts, not in the context of a broader deal where increased revenue is required (to help reduce the deficit), but just as a trade to undo the artificially created sequester! That would be bait and switch fraud. Of course it remains to be seen if something like this could pass. It would allow Obama his S.S. cuts, possibly without the "balanced approach" revenue.