President's Message (Jackie Parnell)|
We Must Make Bottle Bill Work (Pearl Johnson)
League Supports Legacy Lands Act (Pearl Johnson)
Kenneth Starr Debates
Social Security Revisited (Pearl Johnson)
Social Security Revisited
Last month, Jean Aoki laid out the facts of Bushs plans for Social Security. Perhaps we can learn from the experience of other countries. Britain and Chile have tried similar schemes with dubious results.
Paul Krugman, said in the New York Times on Jan. 14 that Britain's 20-year experience with privatization is cautionary tale for Americans being encouraged to accept Pres Bush's plan to privatize Social Security. Guaranteed benefits were cut and workers were expected to make up for those benefit cuts by earning high returns on their private accounts. After 20 years, Britain's Pensions Commission is warning that at least 75 percent of those with private investment accounts will not have enough savings to provide 'adequate pensions'. Now many Britons are calling for imposition of system similar to America's Social Security system.
As for Chile, New York Times columnist Larry Rohter wrote on Jan.27: Chileans find that the pension privatization plan launched 25 years ago, which Bush has cited as a model for his plans to overhaul Social Security, is falling far short of what was originally advertised. Under this program, millions of people have been paying 10 percent of their salaries to private investment accounts that they control. Many lower-paid workers' contributions were not large enough to ensure even a minimum pension of $140 a month. Even middle-class workers who contributed regularly are finding that their private accounts--burdened with hidden fees that may have soaked up as much as third of their original investment--are failing to deliver as much in benefits as they would have received under old system. The government continues to direct billions of dollars to a safety net for those whose pensions are below minimum.
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