| Summary:
Social security privatization is a hot topic and
everyone seems to be talking about it. But
what does it mean for you? How is
privatization going to work? What are the
risks and rewards? Who is right and who is
wrong? If you know nothing about social
security privatization issue, this is a primer.
We have already discussed how
social security works and if it is in trouble.
We also discussed about personal
retirement savings accounts? Complete
coverage is also available in Social
Security Privatization news center.
Why is President Bush pushing for privatizing social security?
There are several reasons why Bush is promoting privatization of social security:
- Privatization will immensely benefit financial services firms that have contributed millions of dollars to President's campaigns. This is one of their major demands and was a condition for their campaign contributions.
(Related article: New
business opportunities from privatization of social
security)
- Since billions of dollars will be pumped into the stock market, the stock prices will go up, at least during the short term. This will benefit rich Americans who have contributed to Bush's election campaigns. Privatization will make many of these people even richer overnight.
- More money in the market means that businesses, traditional supporter of Bush, will be able to borrow money more cheaply. While no one knows how that money will be spent, many analysts argue that the money will be used to make investments
overseas, where the returns are more attractive.
- Since President Bush came to power, the
US economy has been terrible with millions of Americans without jobs. Even those that have jobs see that their incomes have dropped in real terms and their expenses have gone up due to higher local/state taxes, high energy prices, rapidly rising health insurance premiums, and fees on almost everything that used to be free. Privatizing social security means that some of the numbers will look good around the mid-term election in 2006 and that will help the Republicans.
Are there other alternatives to fix social security?
There are several options being offered by experts but
no debate is being conducted and, like the push for Iraq
war, Bush has decided that privatization of social security is the
best solution.
What can you do now?
If you do not support privatization of social security, you can let your opinion known to your representatives. Most analysts expect that the opinion of Americans will not matter in this case. In the meantime, you must start to research this issue more and try to learn as much as you can about investing and portfolio management. Recommended
articles: Retirement
planning Tips
on guaranteed retirement income
Americans
need retirement help
Financial
advisors key to retirement planning
How
to write a living will?
Tax refund |
