Oct 06, 2010
Crazy Keown Wants to Gamble Social Security on Wall Street
Democrats strongly condemned state Representative Mike Keown’s continuing support of plans to gamble Social Security in private Wall Street accounts. On Monday, Representative Sanford Bishop received the endorsement of the National Committee to Protect Social Security and Medicare and pledged to protect Social Security for privatization. Keown has supported a controversial plan for private Social Security accounts on Wall Street.
“Seniors in Southern Georgia aren’t going to sit back while Mike Keown’s moves forward with his crazy plan to gamble Social Security on the stock market,” said Jesse Ferguson, Southern Regional Press Secretary at the Democratic Congressional Campaign Committee. “This week, Representative Bishop pledged to protect seniors and their retirement by protecting Social Security but Mike Keown stands behind a plan to privatize it – slashing benefits and putting the whole program at risk. If Mike Keown had his crazy way a few years ago when the stock market crashed, you can only imagine what would have happened to retirement savings. Mike Keown says he wants to stand up for people but the only people he’s fighting for are the Wall Street fat-cats that profit from gambling Social Security on Wall Street. Sanford Bishop won’t let that happen.”
Background
Keown supports privatizing Social Security. [Campaign Event, 9/11/10]
Associated Press Fact Check: Personal Accounts and Privatization: “It’s The Same Thing”. In 2008, the Associated Press wrote a fact check on Sen. John McCain’s attempt to distance himself from support for Social Security privatization. The AP wrote, “McCain and other Republicans once spoke more openly of "privatization" but realized people didn't like to hear that. Now they talk of "personal accounts." It's the same thing.” [Associated Press, 6/14/08]
Politifact: GOP Changed Name of Privatization to Personal Accounts From Polling. According to the Pulitzer Prize winning Politifact, “It was around this time that Bush and his party decided that most people didn't like the idea of "privatizing" Social Security. Pollsters found that if you didn't call Bush's plan "privatization" but instead called it "personal accounts," you could increase support for the plan significantly — even though it was the same plan.” [Politifact, 6/13/08]
Leading Privatization Opponent: Individual Accounts Means “Privatization”. According to AARP, “’Privatization’ is often used as shorthand for the idea of taking some of the money workers currently pay into the Social Security system and diverting it into individually owned accounts, where each worker would bear some risk for how his or her investments performed. These accounts would be ‘carved-out’ of Social Security.”
From AARP:
Diverting money away from Social Security and into individual accounts is risky and involves trading some of today's inflation protected, lifetime guaranteed benefit for an account subject to market risk and not guaranteed to last a lifetime or keep pace with inflation. Inflation, market turns or loss of employment can mean that your private account may not have enough money to provide an adequate benefit.
Unfortunately, there is a lot of debate on the semantics rather than the substance. Essentially it doesn't matter if you call the concept ‘privatization,’ ‘personalization,’ or anything else—diverting Social Security revenues into individual accounts shifts risk to the individual and hurts the financial status of Social Security itself.” [www.aarp.org/money/social_security/a2003-03-26-ssprivatization.html]
Had seniors been relying on private social security accounts in the Stock Market during the 2008 collapse, they might have lost nearly 40% of their retirement savings in the 12 months leading up to the collapse. On October 9, 2007 the Dow Jones Industrial Average closed at 14,164.53. On October 9, 2008 the Dow Jones Industrial Average closed at 8,579.19. [History of Dow Jones Industrial Average, http://www.mdleasing.com/djia.htm;
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