Bush's social security privitization plan

I have a theory about why Bush wants to privatize social security that I haven't heard yet. (It may be out there, but I just haven't heard it.) I'd like some feedback.

Here goes: Bush, et al. are not really as worried about what the impending exit of the baby boomers from the job market will do to social security as they are about what it will do to the stock market. Baby boomers have been socking away their money in stocks, mutual funds and old fashioned savings accounts in 401K and other retirement plans for some years. Soome boomers have a lot of money stashed away and will be able to live on the interest without drawing on the principal right away, but most will have to start living off the principal pretty quickly. This is especially true because many boomers put their money in during the '90s, lost a lot in 2001 and, at best, have barely recouped their losses in the last year or so.

As boomers start withdrawing their money from their pension accounts really fast and over just a few years, the stock market is likely to fall apart. There are several reasons. First, there are more old people (sellers) than young people (potential buyers). Second, when the effect of the imbalance in the market becomes apparent to young people (buyers), the stock market is going to look even less attractive to young investors (buyers).

Everyone will lose, but those who have the most money in the stock market have the most to lose -- institutional investors, big business and the very rich. As we know, big business and the very rich, and to a lesser extent, institutional investors, are Bush's base. He's worried about how they will fare when the crunch comes. And it will start within the next five years when the first wave of baby boomers start buying their retirement homes and golf club memberships.

Social security will also be affected by the crunch, but the logical thing to do to save it is to raise social security taxes or protect the social security trust. The reason Bush isn't going that route is that he is more worried about his rich friends than about the millions of very poor baby boomers who have worked all their lives for low wages and are going to be forced into retirement in the next ten years with very meager or no savings of their own.

So, I think Bush, et al.'s real goal is to sucker as many young people into the stock market as possible before they realize what is going to happen. It's kind of a sophisticated Ponzi scheme.

We've heard so much about the effect of the baby boomers' retirement on social security. Maybe I just missed it, but the media doesn't seem to be talking about its effect on the stock market. What do you think?

But I still think the main motive is to destroy SS for good and steal a tone of money for corporate cronies in the process.

against SS by the government it is now in a position that it cannot ever replace the money taken. We presently put in more money then is used but, still can't keep it a float. Bush and company want it to end period. I wish I could get out all I've put in.

The "Trust Fund" is totally intact! That money is socked away for future generations! There is nothing more solid than a government bond!

Now you got the memo, but I hope you know better :)

Demographics may lead to a desire to pump up stocks, but I think there would be a desire to pump up stock prices anyway. Why? Bush people own stock. Lots of stock. But it isn't worth anything without buyers. So Bush makes a huge class of buyers of little or no sophistication in picking stocks, who will just throw money at the market. Perfect.

Thanks. I agree that getting rid of social security (and everything else that remains of Roosevelt's legacy) is a major goal of the Bushies.

The media hasn't picked up on the whole issue of the impact of the baby boomers' impending exodus from wage slavery other than how it will affect social security. In addition to the stock market, it is going to affect every other aspect of our economic life -- the housing market, transportation, medical care, you name it.

It is probably going to be necessary to set up incentives that keep baby boomers in the workforce as long as possible -- like enforcing age discrimination laws -- even bigger bonuses for later retirement. Talking about lower social security benefits in the future is counterproductive. It will cause people who are near retirement age to look at the Social Security benefits schedules and consider whether taking early retirement isn't a good idea after all. The early retirement pay-outs are lower over the long run, but, if the pay-outs are not going to rise in the future anyway, maybe it is best to take present value and run with it. Downtalking social security is going to contribute to its failure. Do you suppose that is the point?

If you look at what the govt has done in the past to push up the stock market (401Ks, trad IRAs, Roth IRAs, Education IRAs, dividend tax break, next Bush's lifetime accounts), this isn't out of line. I also don't think it is actually only one party to try to push up the stock market or housing.

And yes - you have to wonder about investing in the stock market - it seems that it's crazy not to when they do everything they can to flood new money in and it has to go up - but crazy to be in such a precarious ponzi scheme when only those in the know will get out whole.

But I also think the Republicans have always wanted to kill the new deal and any entitlements. If not, they'd just adjust the benefits or increase the Soc Sec tax base to all earned income. So the only explanation for them diverting contributions rather than looking for additional contributions is to end Social Security.

One thing I've noticed about many of Bush's plans is that they often have multiple goals - kill two or more birds with one stone.

Example: Iraq - political goal of being war president, control over oil, foothold in Mid East, even (and I have seen this one elsewhere) access and possible control a growing population (Mid East) of potential consumers that might rival that of India and China as the US demographic world impact decreases, increase in defence spending (pays off political corporate cronies) - no reason to think any of these goals were not on the list.

Another example is the pro-life movement. In addition to the political control of Fundamentalists, part of it is aimed at increasing the birth rate in the US - demographic increases mean increase in US power and increase in # of consumers.