But my hand has been forced by an angry white man, who left an angry comment on my blog. It reads as follows:
What is so wrong with a VOLUNTARY plan where you can put away up to 10% of your money? Right now, I know that when I retire I CANNOT count on SS to be there. Beside the fact that the ROI is 3%, by the time I retire, there won't be any money left. In addition, SS was never meant to be a retirement system, it was meant as a system to help people out during the Great Depression to get by. At least Bush is talking about a plan, what are the Dems doing? We know that there is a problem. Bush's plan WILL NOT change benefits to those 50 or over. Those 50 or under know that they can't rely on SS anyway. The real answer is that the Dems see SS as one more step in making the US a socialist country, where Papa Sam takes care of everyone.The mistakes in this comment are multiple, but it contains a glimmer of fact. Social Security is in danger. A voluntary plan, such as the one Bush has proposed, encourages saving (a worthy economic goal) and provide people with more choices (a worthy political one).
However, MUOYG is wrong about why Social Scurity was created (It was originally devised as an insurance scheme to protect people against the ups and downs of life, to alleviate poverty among children and the elderly.) and he glosses over the fact that insurance is as crucial a concept as ownership. Insurance is hardly "socialist," as he suggests; rather, it's integral to capitalism's smooth functioning.
True, Social Security needs to be fixed. But Bush should be careful. If he gets it wrong and abolishes the insurance guarantees SS provides, growing inequality and social unrest are likely to follow. An ownership society should build on the social-insurance system we already have, not replace it.
Americans, of course, are optimists. But too much optimism can be dangerous: among other things, it can blind us to the risks of unalloyed exposure to markets, and make us willing to forswear insurance in pursuit of larger returns. The constellation of factors now in place—increased volatility in the job, housing, and stock markets; growing blindness to the risks of investing; and the administration's intention to expose more Americans to market risk through its ownership-society proposals—threatens to transform the United States into a nation of gamblers. And as anyone who has visited a casino knows, most gamblers lose.
[Note: Much of the above was lifted whole from American Casino by Robert J. Shiller]