Actually … you need to feel a little sorry for the Democrats as they try to make their case for the reelection of Barack Obama. They have absolutely no record of accomplishment to run on. Obama has been a complete failure by any metric.
Here’s a new drinking game for you – and the longer Obama remains in office the more we need some good drinking games. Just watch any news interview program and wait for the panel discussion with the ubiquitous “democratic strategist.” At some point in the discussion the prog will start taking about Republicans “wanting to end Social Security as we know it.” When you have nothing going for your side try to frighten the old folks.
I don’t think that any GOP candidate has done a good job of putting this point across (though Perry tried last week). For people who are now eligible for Social Security benefits and people who are nearing retirement age — say those over 55 — there is simply no reason whatsoever for them to worry about their benefits either being reduced or stopping altogether. It’s just not going to happen. There is no Republican candidate out there who would allow that – and the voters would make sure it doesn’t happen. Those who talk of Social Security reform are looking into the future – not the present – and the future is where the collapse of our Social Security lies.
In 1981 the Galveston County Commission made a proposal to the county workers to ditch the Social Security system and go with a private plan they called the Alternate Plan. The county employees voted on the issue amidst great pressure from unions to turn it down and remain with Social Security. The Alternate Plan won, but not by a wide margin. The Social Security Administration was notified that Galveston County employees would no longer participate, and the private alternative was instituted.
Financially, nothing really changed with the county employee paychecks. There was still the 6.2% deduction from every paycheck for the employee’s contribution to the plan. The county still paid a matching contribution — actually a bit more. That’s where the similarity to Social Security pretty much ended. Galveston County hired a financial planner to set up the plan. The goal was to be a good replacement for Social Security .. with better benefits guaranteed. Every worker had his own account and account balance. The money was pooled into a private sector investment account with a guaranteed minimum rate of return.
So … now the payoff. How are the employees of Galveston County, Texas doing with their Alternative Plan vs. other Americans who were not lucky enough to get out of Social Security?
First … let’s deal with retirement income.
If you’re a low-income worker making about $26,000 a year when you retire you get about $1,007 a month from Social Security. Make that $1,836 per month under the Galveston plan. That’s a difference of $829 a month or almost $10,000 a year. Are you low-income workers out there glad you were able to keep Social Security “as we know it” and not become a part of a plan like Galveston County’s? Yeah — that’s costing you ten grand a year.
What about middle-income workers? The difference there is $1,540 from Social Security and $3,600 from the Alternative Plan. The monthly difference? Try $2,060 per month or almost $25,000 a year. That’s your penalty for letting the Democrats demagogue any attempt to privatize Social Security over the years; $25,000 per year. Don’t you just love your Democrat masters?
And now for the high-income Galveston County workers. These are the people who max out on their Social Security taxes. They get about $5,000 to $6,000 a month from their Galveston Plan vs. $2,500 from Social Security. That’s a difference of between $2,500 to $3,500 per month or $30,000 to $42,000 a year MORE from the Galveston private plan than from Social Security.
There’s something else we need to cover here. The death benefit. If you’re part of Social Security your survivors get the incredible sum of $255. That ought to pay for one spray of flowers for your casket, not much more. After that $255 payment the rest of the money you have paid into Social Security is pretty much gone. Wow! What a deal! But what if you’re part of the Galveston County Alternative Plan? You’re survivors don’t get the princely sum of $255. They get four times your salary tax free. There’s a maximum of $215,000. So there you go! Under Social Security, $255. The private plan? Four times your salary.
There are two other counties in Texas, Matagorda and Brazoria, who pretty much did the same thing that Galveston County did — pull out of Social Security for a private plan with similar results. So … you might wonder why more government entitles haven’t done the same thing! With spectacular results like this you would expect government workers would be clamoring for a private plan of their own. Well you can blame that on the Democrats too. They saw these local government entities bailing on their precious Social Security system and passed a little law in 1983 shutting that door for good. To put it just a bit differently — in 1983 the Democrats erected an economic Berlin Wall around Social Security; not to keep people from getting in on their wonderful ponzi scheme, but to keep people from getting out.
So … for all of your senior, wizened, wrinkled citizens out there just waiting to cast your votes for Obama next year so that you won’t lose your precious Social Security. Just think about the statistics you’ve read above.