Jeb Bush Brings Back the “Privatize Social Security” Argument

Republican Presidential Candidate Jeb Bush admitted at a town hall meeting last week his belief that the next president will find it necessary to privatize Social Security.  Of course, that statement got the liberal media outlets talking. But, while this won’t garner him many votes from the AARP crowd… is he right?

Let’s see what International Business Times had to say on the topic:

WASHINGTON — Jeb Bush thinks the next president will need to privatize Social Security, he said at a town hall meeting in New Hampshire on Tuesday — acknowledging that his brother attempted to do so and failed. It’s a position sure to be attacked by both Republicans and Democrats.

Bush has previously said he would support raising the retirement age to get Social Security benefits, a common position among Republicans. And he backed a partial privatization that House Republicans have proposed that would allow people to choose private accounts.

This is hardly a new idea, even within the Bush family.  Former President George W. Bush pushed the idea for the privatization of Social Security back in 2005.   He made Social Security reform a top priority during his second term.  He failed resoundingly as public disdain for his plan grew quickly as the year progressed.

Bush tried again later in the term unsuccessfully, stating in his final State of the Union Address:  “Congress did not act last year on my proposal to save Social Security. Yet the rising cost of entitlements is a problem that is not going away. And every year we fail to act, the situation gets worse. So tonight, I ask you to join me in creating a commission to examine the full impact of baby boom retirements on Social Security, Medicare and Medicaid. This commission should include members of Congress of both parties and offer bipartisan answers.”

The future of Social Security has become one of the most hotly contested issues in national politics, and both parties have accused the other of threatening its survival. Republicans argue that Democrats’ refusal to change the program will lead to its bankruptcy. Democrats say privatization would kill the program and leave elderly Americans at the mercy of the stock market. Plus, any discussion of changing the system often creates fear in older Americans beyond or nearing the age of retirement, who also tend to vote in the greatest numbers.

Republicans have split on the answer to fix the program, which could begin to pay out more than it takes in as more baby boomers retire and younger generations aren’t able to pay enough into the system to keep it going. Understanding the fear privatization proposals create, some Republicans have argued that the retirement age should be increased or means-testing established instead. Many Democrats advocate raising the ceiling for the tax that funds it.

This is hardly a new idea, even within the Bush family.  Former President George W. Bush pushed the idea for the privatization of Social Security back in 2005.   He made Social Security reform a top priority during his second term. This failed resoundingly as public disdain for his plan grew quickly as the year progressed.

Bush tried again later in the term unsuccessfully, stating in another State of the Union Address:  “Congress did not act last year on my proposal to save Social Security. Yet the rising cost of entitlements is a problem that is not going away. And every year we fail to act, the situation gets worse. So tonight, I ask you to join me in creating a commission to examine the full impact of baby boom retirements on Social Security, Medicare and Medicaid. This commission should include members of Congress of both parties and offer bipartisan answers.”

George W. Bush’s actions in office set this country back irreparably, but he recognized that it was unsustainable in its present form.  I can only applaud this statement from his 2005 address; “As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers.”

I wish he stopped here, but he continued;  “And the best way to reach that goal is through voluntary personal retirement accounts.”

Voluntary personal retirement accounts are pointed in the right direction, but they were barely a step in the right direction.  Yes, younger Americans would have been able to invest a portion of their Social Security contribution, which is almost guaranteed to provide a greater return than what they would receive from Social Security upon reaching retirement age.  However, Americans would have been allowed to put their money in a limited amount of investment vehicles.  This would potentially handcuff account holders investment options. They who would only be allowed to invest only in stocks or instruments that were deemed acceptable.

What if an account holder wished to take their money and invest in physical precious metals?  What if an account holder wanted to invest in themselves by taking a college course?  What if they wanted to take their money to pay down a credit card or medical bill?

This topic is explained in greater detail in my upcoming book; How Are You Not Angry Yet: How Social Security is Destroying the Futures, Finances and Hopes of Generations X, Y, and Z and How We Can Put an End To It

The best possible outcome would be for Americans to be able to choose whether they want to financially participate in the Social Security program at all.

-R.J. Renza, Jr.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Add a Comment

Your email address will not be published. Required fields are marked *