Edwards' "flip-flop"

Let me put my two cents in about this inane "Edwards supports Social Security privatization" attack that's been floating around, courtesy of Drudge. If you read the Drudge smear, its very obvious what Edwards was talking about: investing a piece of the Social Security trust fund in a very, very broad market index fund. This is an idea that lots of Social Security loving people were considering back in the heady days of the late 90s, and truth be told, its still not such a bad idea. Over time, the 10 percent of the trust fund does stand to make a better return than the other 90 percent in treasuries. If the market has a down year, the government can cover that loss with other money, to be paid back when the bull market returns. Social Security makes a little more money, and everyone is happy. Granted, no one is crowing about it now because it would be politically stupid, but sure enough when the market has been humming for an acceptable period of time, this idea will reemerge.

Now, that is NIGHT and DAY from G2's individual investment scheme. That proposes we remove money from the Social Security account, and give it to the recipients early, allowing them a wide degree of latitude in how to invest it. Then, when it comes time for them to retire they get whatever is in the account. For some lucky people, that will be a lot, for other cautious people, it will probably be comparable, but for unlucky people, and for most people if they are trying to retire during a market downturn, that account will be real disappointing. And the government won't be around to cover the loss, because they already gave you the money in the first place. This is a stupid, stupid idea. Not to mention the fact that its already moot, since government would have to cover the deficit in the Social Security account now or cut current benefits to retirees. Sorry grandma, you only get $300 this month. Your grandson is going to take the stock market for a little test drive. When Social Security gets taken out of your paycheck, the cash isn't squirreled away in some box with your name on it somewhere in the Treasury Department, to await you when you're 70. It ends up in a check to an 80 year old somewhere. This should be common knowledge, but I think the Bushes realize it isn't, and are capitalizing on that.


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