One of the things we must be thankful for during this time of economic instability is that former President George W. Bush never got his way in privatizing social security. Bush had wanted social security accounts transferred from the government to the stock market.
If millions upon millions of Americans today had had their social security accounts invested in the stock market, consider the situation.
The distress of folks has been intense enough seeing their 401(k) retirement accounts—heavily based on stocks—lose a good part of their value with the decline of Wall Street. Imagine if this had happened to their social security accounts.
This privatization of social security was not some incidental issue for the Bush administration. Bush built is second-term domestic policy agenda around it.
There were critics of the scheme. It was a “lethal plan,” insisted Edith Weller of the Economic Policy Institute. She wrote that social security under the Bush proposal “would no longer be a social insurance program providing a guarantee of…lifelong retirement income. Instead,” peoples “core retirement income would be put at risk.”
She said “social security is too important a source of income for America’s families to be left to the uncertainties of the stock market.”
And this was well before the stock market demonstrated something beyond uncertainties—it had a meltdown, as it has every few decades in U.S. history.
The AARP campaigned against the Bush plan and was part of the coalition that successfully stopped it in Congress.
Importantly, polls showed that a majority of Americans were dead-set against it—although that often doesn’t deter politicians.
The AARP noted that Bush’s line was that with privatization, Americans would have “a chance to make money in the stock market.” It emphasized that it “and other critics contend that private accounts carved out of social security funds add an element of risk to retirement savings.”
Bush was on social security privatization—as he was on so many issues—as stubborn as could be. Even as he saw his plan failing, he insisted he was “confident that eventually the will would be there to make it a reality.”
It’s a new day today. This and so many of Bush’s bad calls—from environmental protection to regulatory issues to health matters and on and on—are gone, thank the democratic process.