Why don't politicians tell the truth, about "Privatization"?

Although every American knows that the Social Security trust fund takes in billions of dollars, per year, and uses these to buy Treasury bills, which earn interest, until the "bonds" come due, then this money is paid out, as retirement, and disability, benefits, to those in need,

I have yet to hear such a concise, and defined, explanation, of "Privatization".

Why do politicians try to make it sound like "Privatization" is an "alternative" retirement plan, when, in fact, Privatization is actually just taking ones money, and RISKING it, on the stock market.

That's right: Unless the investor is lucky enough, to choose a winning stock, they could, very easily, walk into an investment, with $10,000, or $100,000, yet walk out, moments later, with just $10.00 in their pocket.

This is why groups such as AG Edwards, and Merrill Lynch, advertise that investors should assess risk, PRIOR to buying stocks, or bonds.

Yet I never hear politicians, especially those, who support "Privatization", giving the public such a clear definition, of what Privatization actually is.

Why is the public NOT being told the simple fact that Privatization is NOT a "retirement plan". It is "playing the stock market", pure and simple.

Unlike Social Security, there is NO guarantee, with Privatization, yet this information is NOT being given to the public.

I really have to wonder WHY?????

4 Answers

  • 6 years ago

    I've been playing the stock market (your words), for 20+ years now. My 401k passed the mid 6 figure mark a couple of years ago.

    The market is up something like 1800% since it started it's current 'bull' market run. Check on treasuries, and see if they're up that much since 1982.

    The market has never had a rolling 20 year period when it lost money. I suspect if my SS money had been invested in the market & returning 8 -12%, as opposed to treasuries lame 2%, I would be a millionaire by now. And I would have retired years ago.

    But not to worry, I doubt our politicians would ever let ss be privatized. They would lose control (of the American people's money). They'll never let that happen.

  • Anonymous
    6 years ago

    Bull- it does not have to go into the stock market. It could go into a tax deferred annuity with a major insurance company. These investments are usually very safe and pay more interest than what you get at the banks. I sold a lot of these in the mid to late 1990's. Back then, they going rate of return was 7.5%, but they had a guaranteed minimum annual rate of 3%. In the late 1990's, the stock market was booming with people making 15 to 20 percent a year. In 2008 and 2009, I wondered how many of those people wised they had put their retirement funds into a safe tax deferred annuity. They would not have lost a penny, in fact, they would have made 3% when the S&P fell over 40%. For those who balk at a minimum return of three percent, that is still about twice the rate of return as Social Security during its existence.

  • 6 years ago

    Most are saying allow young people a small bit of the total to gamble in the market. Current income pays current retirees with only the remainder invested in treasuries. This covers current retirees, disabled and survivors and guarantees a floor for future retirees but doesn't grow as fast as private investments or leave anything for your estate. This means some will only pay not benefit if they die leaving no survivors before retirement age. Insurance is like that buy term life and don't die you lose, buy car insurance and no accident you lose.

    If we allow someone to redirect 10% of what they currently pay a year into private investments it would be tiny like $300 a year but the young could watch it grow and shrink over decades and make them feel better.

  • 6 years ago

    Privatization = Risk

    You will never hear a politician mention privatization when the stock market is falling.

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