The Reality of Social Security Privatization
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The problem for the privatizers, however, is that the more people learn about the plan, the more they oppose it. One thing that Bush & Company really hope you don't learn is that other people have already experienced privatization. George is presently hopping around the country with Little Rosy Scenario on his shoulder promising a golden future with privatized retirement. But folks in several states here in America and in several countries have seen that future ... and recoiled from it.
For example, Nebraska, West Virginia, Montana, Michigan, Ohio, and Florida have tried shifting their public employees into do-it-yourself, private retirement accounts, but the efforts failed. Once the employees saw the plans, very few took the bait, and those that did generally ended up with lower benefits than they would've gotten from the public system they left.
Likewise, the rush to privatize pensions in Chile, England, and elsewhere has not ended happily for retirees. In Chile, for example, the government now has to pour billlions of dollars annually into the private system, for it can't provide enough benefits to poor workers to assure even basic needs, and middle-class retirees find that hidden fees in the private accounts take as much as a third of the money they had put into them, leaving retirees with far less than they would've gotten under the public system. And England's 20-year run with its privatized system has produced fraudulent brokers, exorbitant fees, taxpayer bailouts, and the harsh reality that at least 75 percent of those with private accounts will not have enough in them at retirement time for "adequate pensions."
Before you buy Bush's rhetoric, check the reality of experience.