Newt Gingrich and Social Security

2017-07-10T16:23:23+00:00January 23rd, 2012|Uncategorized|

There are many reasons primary voters cast the ballots they do?unfortunately, a deep understanding of the candidates? positions on important (and sometimes complex) policy issues isn?t always at the top of the list. This often leads to ?buyers remorse? once voters actually get a good look at the nominees? positions on issues that truly impact the average American. Issues like Social Security for example.We weren?t in South Carolina doing exit polling but are still willing to bet most voters have virtually no idea what the former Speaker plans for Social Security. Not only does he support privatization, he doubles down on the failed Bush plan, by promising the private investment companies who might someday control your Social Security contributions that the government will back them up if/when they lose your money. Sounds like a sweet deal for investors that would also cost taxpayers big time. Think Progress describes the plan this way:

?As we pointed out when Sen. Rob Portman (R-OH) suggested a similar idea, promising to make investors whole again sets up a huge moral hazard problem. If investors know full well that the government is going to provide them with a minimum benefit, no matter what they do, then the incentive is to make risky investments and hope for a big payoff. After all, why not take the risk if the government has guaranteed that you can?t lose money? Investors have every incentive to bet big in the hopes of a large payout, because if they go bust, the government will bail them out. Add to this the fact that the privatized systems in Chile and Galveston aren?t as wonderful as Gingrich makes out. In fact, while they work quite well for the wealthy, middle- and lower-income participants wind up worse off.??Gingrich?s plan would alsocause the deficit to explode, as money meant for Social Security would have to be diverted into the creation and administration of private accounts. Social Securitykept 14 million seniors out of poverty last year, but Gingrich would enact a scheme to privatize the system, while hoisting the costs of failure onto the federal government.?

So, Newt Gingrich?s plan means more for private investment firms who will get to play with your money, in a system that benefits the wealthy, and explodes the deficit.Chances are, voters in South Carolina?where there?s a growing senior population facing 13% poverty— didn?t know much about Gingrich?s Social Security plan, and as with President Bush?s privatization plan, the more Americans find out about it the less they?ll like it.Talk about buyer?s remorse! Wait until you hear what he?s got planned for Medicare…we’ll have more on that later.