. . .
[But] the boomer beneficiaries of federal spending are going to be unwilling to pay the taxes that make the spending possible -- especially if the taxes don't seem fair. Despite currently low inflation, Boskin notes, much of the taxable gains in retirement accounts are merely nominal -- that is, they are the result of inflation rather than real investment returns.
. . .
Long before Americans have paid those $12 trillion in taxes, there will be a tax revolt, there won't be any money for Social Security, after all, and we'll have to bring Henny-Penny out of retirement.
IOW, after we've paid for our elders' social security and saved for our own retirement outside of Social Security, we're gonna pay for our own Social Security with taxes on our IRAs.To the extent, of course, that we don't stick our grandchildren with the bill! But at least it does show that the Social Security Trust Fund does have a funding source ace in the hole.
;-)
Withdrawls are taxed at the marginal tax rate while if you invest outside of the accounts the earnings from capital gains and dividends are taxed at a lower rate. Also, tax rates will likely go up in the future to pay for social security, medicare and the new drug benefits. Investments which are not tax deferred will be immune to those tax increases, while tax deferred investments will take the full brunt of them.
Both major political parties perpetuate The Big Lie regarding Social Security. The Big Lie has existed since Social Security's inception. The debate over "privatization" is only the latest version of The Big Lie.
The Big Lie is that Social Security is some kind of retirement savings plan.
It is NOT.
Social Security is a socialist income redistribution scheme, nothing else.
Those who are working are taxed to provide a "safety net" for those who are less fortunate.
Originally, this meant retirees and surviving dependents.
Congress has, of course, complicated it far beyond this over the last 65 years.
But one fact remains: it is NOT a "savings plan", it is an income redistribution scheme.
A major facet of The Big Lie is that "we have to do something so that Social Security remains solvent in the future.
Poppycock!
In today's age of modern computerization, the computation for operating an income redistribution scheme that remains perpetually solvent is quite simple:
The only change necessary to the current system is that monthly payments to eligible recipients would be a variable amount, not fixed.
THERE IS ABSOLUTELY NO NEED FOR A MULTI-TRILLION DOLLAR "TRUST" FUND!!!
Congress should NEVER have been permitted to confiscate so much money from the American People in the name of The Big Lie. This fund is nothing but a slush fund that Congress raids to pay for other government expenditures. If private sector employers did the same thing with their companies' pension funds, they'd be placed in prison. The "privatization" plan proposed by Bush is merely an attempt by Wall Street brokerage firms and financial institutions to get in on the scam: grab a portion of a constant revenue stream (guaranteed by taxation) from which they can skim their commissions.
Daschle's "concern" over the Social Security system is a lie.
Bush's plan to Enronize the system is worse.
The American People need to wake up and put these liars and thieves in prison.