Thursday, May 24, 2012

Bernie Sanders on Social Security

Social Security is essentially a federal retirement savings plan and is not a welfare program. Employees pay a monthly FICA payroll tax to fund Social Security and Medicare.

Private enterprise will try to suggest it can better invest the money, but when CEOs are making 400 times what he average worker makes, and you take away profit and management fees for private retirement funds, you end up without about half of what Social Security provides.

Both the UK and Chile tried to privatize their social security systems. The UK abandoned there system because pensioners lost half of their pensions.

The Chileans have a privatized system that primarily benefits the affluent. The Economic Opportunity Institute noted the Chilean private system is a case for caution:

  • Transition costs have negatively impacted public spending.
  • Pension fund management fees are exorbitant.
  • Non-participation threatens the overall viability of the system.
  • Individual accounts replace less of low-income workers and women’s wages.
  • Private accounts leave workers susceptible to market downturns.
Another problem is that age discrimination laws in the US are weak. 

During economic downturns that occurs every 7-10 years, seniors lose their jobs and have little recourse. 

What is a 50 year older worker to do between age 50 and the new Social Security retirement age that the GOP is proposing that is 69 or 70? 


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