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Barr Says We Should Create Private Social Security Accounts

President Bush dipped his toe in the Social Security reform waters a few years back, but at the first sign of political difficulty, he retreated and then gave up. Nary a peep from McBama on the reforms Social Security desperately needs. Enter Bob Barr. He would promote private accounts, and the option for young people to opt out!
August 14, 2008 11:27 am EST

Atlanta, GA - “The U.S. is facing a financial tsunami as the Baby Boomers retire,” warns Bob Barr, the Libertarian Party candidate for president, on the 73rd anniversary of Social Security being signed into law. “The total unfunded liability for Social Security and Medicare is more than $100 trillion—that is ten times the official national debt! The longer we wait to act, the harder it will be to reform the system,” says Barr.

“Social Security was sold to the American people as a system of social insurance, but that was merely a polite fraud to win their votes,” notes Barr. “It is a pay-as-you-go system. If it was run by a private company rather than the government, the managers would be jailed for running a Ponzi scheme, one of the classic investment swindles. The so-called trust fund doesn’t exist: in reality, it is a file cabinet full of IOUs rather than a vault full of cash,” he explains.

“The system is headed towards financial collapse,” Barr adds. “It starts running a deficit in 2017 and the red ink piles up fast. In essence, to keep the system afloat we will either have to double taxes or halve benefits. Neither is an appealing option.”

“Moreover, the rate of return for beneficiaries keeps falling. Many Americans are now losing money. Over the long term the most the majority of people can hope for is to make a percent or so—compared to 5.5 percent a year on average for a private investment in a mixture of bonds and stocks,” Barr observes. “The U.S. government is literally stealing people’s retirement from them.”

“I am proposing a system of private retirement accounts,” explains Barr. Younger workers will be able to put increasing amounts of their tax payments into individual accounts. New workers entering the system will be able to exit Social Security entirely. The transition will be paid for in part through savings from adjusting benefits to account for the erroneous use of a wage rather than price index for setting payments and the fact that beneficiaries are living longer. Other savings will be achieved by cutting nonessential programs throughout the government, including corporate welfare,” he adds.

Just more evidence that the "Maverick" candidate and the "Change" candidate are both Status Quo candidates, while Bob Barr is the one who would shake things up for the better.

Link to full statement.

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posted by Mike Kole @ 10:39 PM, , links to this post