WEEKLY DOW JONES INDUSTRIAL AVERAGE, 2002-2008When viewed from perspective of an economy on the verge of a nervous breakdown and the battering that venerable Wall Street institutions and the Dow Jones Industrial Average have taken, President Bush's plan to privatize Social Security would have wreaked extraordinary havoc had it seen the light of day. And if John McCain were to get his way, that may yet happen.
In fact, McCain wants to radically transform Social Security and employer-provided health care, two of the precious few safety nets left for middle-class Americans, by setting up so-called private savings accounts for each, in essence letting the market -- the very folks who have royally screwed up the economy with a big assist from McCain and his Washington helpmates, to decide what's best for we mere mortals.
It is hard to say which is more troubling.
Not only would SS savings accounts be tied to the health of the economy, as opposed to being a safe harbor in any economic storm when it comes time for Americans to retire, McCain also wants to reduce benefits. And provide a windfall of hundreds of billions of dollars in fees to the financial industry.
Health-care savings accounts would be similarly vulnerable, and worse yet would remove an employer's incentive to provide a health-care plan for his employees, leaving them more exposed to the same profit-hungry ethos that already runs roughshod in the health-care system. According to one study, up to 20 million Americans would lose coverage under the McCain plan, joining the 45 million who already are uninsured.
For the record, Barack Obama likes Social Security just the way it is, which according to a recent Congressional Budget Office report is in rather robust shape despite the claims of doomsayers, many of whom are of course tied to that selfsame financial industry. There is no foreseeable shortfall until the year 2049 even when taking into account that payouts then are projected to be 30 percent higher than they are now.
As for health care, Obama would modernize employer- and government-provided health care by making investments that hypothetically would lead to a more efficient health-care system, including pooled care and a long-needed emphasis on preventive care. Obama's plan also calls for increased tax credits, while McCain's astoundingly calls for a tax on health-insurance premiums that he disingenuously argues will be covered by tax credits elsewhere.
For those with short memories, Bush's plan to privatize Social Security was a signal failure of his first term because virtually no one was buying -- including senior citizens, junior citizens and in-between citizens.
Under the Bush plan, retiring workers would have suffered a 10 percent benefit reduction after the plan was implemented. Workers retiring 20 years after the plan kicked in would see a 20 percent cut and workers retiring 40 years on a 40 percent cut.
This may be why, for all intents and purposes, McCain is proposing his own SS privatization plan more or less in secret, which is to say that while he was pitching it during the primary campaign, it has been conspicuously absent from his stump speeches since. It is not hard to see why. It's a drop-dead loser, especially as the economy hemorrhages, but he doesn't have the guts to acknowledge having second thoughts.