Looking at your profile, it is clear that you are uneducated with regards to the current state of SS and that the money is already spent. No investment ever occured, instead current confiscated money is distributed to current recipients. If any private business set up a pension plan with the same operating procedure, the CEO would be thrown in jail for running an illegal ponzi (sp?) scheme.
In addition, your questions seem to indicate that all this time on FR and you haven't figured out that politicians will spend every dollar available to them. That is how they buy votes, and the SS "trust fund" is filled with IOU's from the politicians spending the money on vote buying.......
Exactly. Let me draw a picture for you. First, the Cato Institute says there's a $12 Trillion dollar deficit in Social Security for the Boomers. So, to make it easier to illustrate, let's say from 2010 to 2040 we have a $12 Trillion shortfall.
Next, the proposals I've seen show creating a private account - let's say a start date of 2007 to give them a good amount of time to pass it. Sec. Snow says the government will BORROW money to set up these private accounts and pay SS benefits while participants contribute to their private accounts - you can view his speech on the White House web site.
So, let's say 20% of the approx. 100,000,000 workers in the US today want to opt for the private accounts. What I've seen thus far states a maximum of $2000 per year for each participant, so we'll use that figure. 200,000,000X2000=40 Billion. So the government borrows $40 Billion per year to cover the costs of the accounts, and I'm assuming it gets added on to the federal deficit.
Here's how it breaks down as a time frame illustration:
(----------------------2007 start of private savings ---------------------->
(-----------2007 start of gov't borrowing $40 Billion per year------------->
(-------2008 incremental start of saving account offset to SS-------------->
(-------2008 interest starts accumulating on borrowed money----------------->
Now do you see any problems with that picture? The government is BORROWING money (and racking up interest) so people can contribute to private savings accounts during the time frame that SS is ALREADY $12 Trillon dollars short, and the incremental recoupment from the savings accounts won't peak until after all the baby boomers have retired because we're starting them right before the shortfall and not enough of the boomers can accumulate money in them to offset what they collect from Social Security!
It's a recipe for financial disaster and we'll be left holding the bag!
EXCERPT: http://niemanwatchdog.org/index.cfm?fuseaction=ask_this.view&askthisid=0084
Important questions about Social Security
ASK THIS | January 24, 2005
The press needs to dig beyond the political rhetoric and make sure people understand what's motivating the push for private accounts, and what's at stake.
Redistribution of wealth
It's also the engine for a massive redistribution of wealth. By design, Social Security involves colossal subsidies not just from workers to retirees, but from single people to married couples, from two-earner couples to one-earner couples, from high-income earners to low, from men to women, from the able-bodied to the disabled, and from those who die early to those who die late.
Get a passing acquaintance with Social Security formulas and payment statistics, and you learn all sorts of things. For instance:
A retired couple receives more benefits than a retired single person, even if only one member of the couple contributed to Social Security;
Disabled workers collect benefits even if they've barely contributed at all.
Widows and other survivors of the retired and the disabled get benefits whether or not they contributed.
Low-income workers get a much higher percentage of their working incomes back after retirement than higher-income workers.
People who die early may not see any Social Security benefits at all, while people who live decades after retirement receive benefits the entire time. This is because Social Security is a lifetime guarantee that pays benefits to recipients until they draw their last breath – regardless of how much money they contributed.
Do most people realize that only two-thirds of Social Security beneficiaries are actually retired workers themselves? The rest are disabled workers, and survivors and dependents of retired and disabled workers.
See all that social engineering at work? Bush and his associates surely see it. They see the government taking away their money and using it in ways beyond individuals' control – often to help other individuals who aren't sufficiently self-reliant. They see a system in which, with some notable exceptions, what you get is what you need. Finding that vaguely socialistic, they want to replace it with a system in which what you get is what you paid.
If people don't fully understand what Social Security is, they can't understand why conservative anti-government Republicans want so much to change it. And they can't understand what effects changing it might have on society.