On the campaign trail, Hillary Clinton tried to fire up her supporters, saying:
“After Bush got reelected in 2004, the first thing he said was, let’s go privatize Social Security. … And you know what, their whole plan was, their plan was to give the Social Security trust fund to Wall Street. Imagine that.”
Yes, imagine that.
Now, you can go either way with her claim about President George W. Bush. Yes, President Bush proposed voluntary personal retirement accounts for Social Security. Under the Bush plan, workers could choose to have some of their Social Security payroll taxes contributed to a personal account similar to a 401(k). And those workers could also choose, if they liked, to invest some of those personal account contributions in a broad stock index fund that would be managed by a government entity similar to the Thrift Savings Plan for federal government employees. Would the trust fund itself have been given to “Wall Street”? No. Would President Bush have forced anyone to give any of their Social Security dollars to “Wall Street”? No. But if you don’t want Social Security funds to have any risk, then you might excuse Mrs. Clinton for her shorthand description of the Bush proposal.
But guess who did want to give the Social Security trust fund to Wall Street, as in having part of the trust fund itself invested in stocks? Oh, what’s his name again? President Bill Clinton! Back in 1999, President Clinton proposed investing about 15% of the Social Security trust fund in the stock market.
If those stock market investments paid off then Social Security’s solvency would have been extended. If those investments didn’t pay off – and things have been a bit rocky for the stock market over the past 15 years or so – then Social Security’s solvency would have been hurt. And if the trust fund goes insolvent then by law retirees’ benefits get cut.
And guess what? Unlike the Bush plan, there was no room for choosing under the Clinton proposal to invest the trust fund in stocks. Individuals couldn’t opt out and they couldn’t choose to have their money invested in bonds rather than stocks, as they could have under the Bush plan.
Did Hillary oppose Bill’s idea to invest the trust fund in stocks? Does she even remember it?
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What is the definition of a trust fund?
"money that belongs to one or group but is legally held or managed by another person or by an organization.
Sounds good, but is that what the social security trust fund is? The Trust fund has never held much in the form of "Trust" Today's workers are putting hundreds of billions into Social Security each year, but sadly the trust fund is not rising by hundreds of billions each year. Looking at past history it put in less than 5% of a workers payroll tax.
Now the article tends to imply the stock market/investing the trust fund is a bad idea. Is it the worse thing that could be happening before our very eyes?
Trust - belief that someone or something is reliable, good, honest, effective, etc.
So I guess the worker knows that for every $1 in payroll tax they pay, less than 5 cents is going into a trust fund to be used to fund their benefits in the future. Social Security has been up front with workers since 1937 sot this should not be a surprise.
But wait, the SS-OASI trust fund in 1983 was near exhaustion and borrowed $11 Billion from SS-DI and Medicare to cover near terms benefits.
So who does the trust relate to? Does it relate to those operating the program for if it is, I certainly would not trust them. When I give to charity I attempt to learn how much actually goes towards those in need, where is the money going. With Social Security I know they allocate less than 5% to the trust fund to pay future benefits. I cannot remember ever seeing a charity that was worse than 5%. So maybe it is not charity. I know it is not trust. Could it be a Ponzi Scheme? Please don't let it be true. I will just bury my head in the sand and hope it goes away.
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