My personal musings about anything that gets on my radar screen--heavily dominated by politics.


Am I Seeing This Right?

I've been working pretty hard to try to get my arms around the whole social security thing. I'm not an actuary, and I don't play one on TV, so it's all pretty vague to my mind. So what I'm trying to do is come up with an analogy--let me try it out on you and somebody out there tell me if I'm on the right track.

Let's say Social Security, as it stands right now, is your dad's Oldsmobile. Comfortable, but not glamourous; steady, but not fast; and when you're done with it (i.e. you die) your car goes back to where it came from.

What I think the President is trying to create is a two-car system. One of them, the two-thirds of your taxes, is your dad's Oldsmobile, but the compact model. It may only be about 60% of what you used to get, but it has all the characteristics of the old car. But on top of that, if you want to, you can get a second car. This one is not as steady or certain, but it does have the potential to be a real performance model--it could also be a lemon. The difference is, when you're done with this second car, you get to pass to down to your heirs.

So I guess, as much as you're willing to undertake risk, you might get unsteady returns which could be great or could be weak--but it's yours.

Is this close? For my money, give me that second way--even if it's not going to outperform my dad's Oldsmobile. When given the choice of two uncertain policies, it seems to me that the best approach is to take the route that involves more, not less, liberty.

By the way, can somebody PUH-LEEEZE explain that the President's plan involves VOLUNTARY personal account diversion. If you all (speaking to the left) are so darn certain that this ship won't float, then don't opt in. But leave me the freedom to do as I please, if you don't mind.

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