Bush Admin has been Overstating Return on his Private Accounts
A Yale Economist has calculated that most retirees will lose benefits under Bush's provatization plan.From the Washington Post
By Jonathan Weisman
Washington Post Staff Writer
Saturday, March 19, 2005; Page E01
Nearly three-quarters of workers who opt for Social Security personal accounts under President Bush's "default" investment option are likely to earn less in benefits than those who stay with the traditional Social Security system, a prominent finance economist has concluded.
A new paper by Yale University economist Robert J. Shiller found that under Bush's default "life-cycle accounts," which shift assets from stocks to bonds over a worker's lifetime, nearly a third of workers would bring in less in benefits than if they remained in the traditional system. That analysis is based on historical rates of return in the United States. Using global rates of return, which Shiller says more closely track future conditions, life-cycle portfolios could be expected to fall short of the traditional system's returns 71 percent of the time.
Shiller's paper is found on his website. [Do you really want to read a paper by a Yale Economist? These items are normally read by masochists and other economists.]
Not only do retirees give up government guaranteed benefits but probably get less in retirement by doing so. Sounds like a typical Bush plan to me. No doubt the wealthy and Wall Street will make out like (dare I say it?) Bandits. The rest of us will be screwed.
posted by Richard @ 10:20 PM
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