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The Demagogues of Washington

True to his word (and isn’t that a refreshing change in the White House?), President Bush has appointed a new commission designed to look into the possibilities of the partial privatization of Social Security. Since there are so many people demagogue-ing this issue, it is important at the outset to go over, once again, what the proposed commission is likely to come up with for a plan and what they are not. We’ll get to the demagogues in a moment or two.

First and foremost, ALL SENIOR CITIZENS CURRENTLY ON SOCIAL SECURITY WILL NOT HAVE THEIR CHECKS CHANGED, CUT OR INTERFERRED WITH BY EVEN ONE PENNY. Second; since the plan will be voluntary, nobody, but nobody, who doesn’t want to be in a new plan will be forced to participate. That’s why they call it "voluntary."

The President has appointed quite an impressive commission, comprised of seven Republicans and seven Democrats, from diverse backgrounds. Former Democrat New York Senator Daniel Patrick Moynahan and Richard Parsons, AOL/Time Warner’s co-chief operating officers, were named co-chairmen of the commission. The commission is to report back to the President on its findings and suggestions later this year, which in Washington terms is almost breakneck speed.

So, where’s the controversy? Where’s the opposition coming from? The new plan that will be submitted by this commission will involve taking only a small portion of the money for those who choose to volunteer to do it, and open up accounts that will be variable as opposed to those guaranteed by Treasury securities. Well, the day the Presidential commission was announced, two of the opposers crawled out from under a rock, and held what I consider to be a shameless and even deceitful press conference. The two men I am talking about were the Democrat leaders (?) Senator Tom Daschle of South Dakota, a Senate minority leader, and Richard Gebhart of Missouri, the House minority leader. These two gentlemen had the nerve to sit in front of a television camera and say that if some people went into this voluntary program, it would ruin the whole system. They had the nerve to challenge the validity of variable investing vs. fixed, and then, winning the "great mind award for the 17th century," said, "How many of you out there would rather have had your money in the NASDAQ last year vs. the Social Security system?"

That is such an unbelievable comparison to draw that I’m really surprised that even these men, who over the last four or five years, you recall, told us that morality and honesty and integrity don’t matter in the White House, had the nerve to come out with such a question and statements as they did. As both Dashle and Gebhart know all too well, the comparison isn’t about last year, and shouldn’t be. Everyone knows last year was a bad year in the stock market. The comparison ought to be, ‘Would you rather have had your money in the stock market in general, or Treasury securities over the last 2 or 4 or 6 or 10 or 15 or 20 or 30 years?’ The reason they didn’t say something sensible like that is that they know what the answer to that one is, because, by and large, most people would pretty much rather have their money in the market.

Variable investing isn’t for everybody. If, when the new plan comes out, you don’t want to be a part of it, don’t be a part of it! I repeat, IT’S VOLUNTARY. But for the leaders of the Democratic party to come out and oppose it on the grounds of last year’s performance, and the fears that you and I will do something irresponsible is, in fact, irresponsible in and of itself. They must know better—God help us if they don’t. In the meantime, as one of my clients suggested previously, if you want to solve the Social Security problem once and for all, just force Congress to be a part of it. That’s right (didn’t you know that?)-- your Congressmen and Senators are not a part of the Social Security system, and never have been. Think of that the next time one of those hypocrites lectures you about what you ought to be doing with your Social Security money.

(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc. in Milwaukee. The views are his, and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)

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