The Social Security trust fund is invested in a bunch of government bonds, which are nothing more than government promises to pay. These are worthless according to Bush. So we should all switch our retirement from a government-guaranteed promise to pay to private accounts invested in stocks and bonds that we "own."
Which is safer? A government promise to pay its' bonds, or a private corporation's stocks and bonds?
United Airlines just got a bankruptcy judge to let it walk away from its promise to pay pensions to its' employees. The US government has not defaulted on its bonds in over 200 years. UA has a stock that is worthless, and it's bonds are worth - what?
A bond is a promise that if you will loan someone money, they will give you a bond that says they will pay your back with interest. The issue is how credit-worthy is the person or organization you loan your money to.
So if you have private accounts filled with stocks and bonds, what do you own? You own whatever the issuers of those stocks and bonds say you own. Nothing more than a promise. Like a pension from United Airlines.
Here is a further discussion from Talking Points Memo.
As you read it, ask yourself - when Bush takes away your guaranteed government Social Security and 'allows' you to have an account filled with promises to pay such as bonds and stocks, what have you gained?
Remember, you are giving up a guaranteed government retirement benefit in exchange. And you won't get rich with private accounts because they won't let you spend the money on lottery tickets.
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