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Liberty and Freedom: It All Adds Up To Social Security Privatization on FOX News

Reported by Ellen - January 24, 2005

Saturday night's (1/22/05) After Hours with Cal Thomas featured an interview with newly elected Republican Senator Jim DeMint of South Carolina. DeMint and Thomas quickly got down to the business of telling us that Bush's inaugural speech wasn't a threat of further military action (despite Dick Cheney's not-so-veiled threats about Iran) but was really about spreading free enterprise. It turned out that the free enterprise both men seemed to have in mind is the privatization of Social Security.

When Thomas asked about the prospect of Social Security "reform," DeMint responded:

The president talked about exporting liberty but for that to work, we have to be free here at home and ownership is a key part of that... You're not really free if you don't own something and the largest saving account that most Americans have is Social Security and the average American puts in over $4000 a year into that system. Unfortunately, today we're not saving one penny of that.

strong>UPDATE: As an astute reader pointed out, DeMint's $4,000 contribution figure for the average American is ridiculous. If the tax rate is 6.2%. then the average salary would be $64,516.

Thomas properly pointed out that Social Security is not a savings account but he called it a tax instead of the insurance program it really is. Comment: My American Heritage dictionary says taxes are funds for a government's support.

Asked about the effect of downturns in the stock market, DeMint said, "There doesn't have to be any risk in ownership. In fact, our plan was designed to give the poor a better deal which means the less you make, the greater percentage of your social security taxes actually go into your account. And that gives the poor an equal chance to accumulate the money they need to be completely free and self-sufficient in retirement. But there's also a standard account... a mix of index-type funds and government bonds. The guarantee in our plan, Cal, is that you'll never receive less in Social Security than is promised by the current system."

Further details of Demint's "risk-free" plan were not divulged. That left me wondering whether his "better deal" for the poor also guaranteed their accounts wouldn't run out of money while they were still alive or what kind of "risk-free" benefits might be lost to survivors and the disabled, who might be unlucky enough not to have amassed a sizable account before calamity struck. Thomas didn't seem to have thought of that, nor did the transition costs of moving to such a system which are thought to amount to about $2 trillion. Saddling our children with more debt doesn't sound so liberating to me.

Comment: This is at least the second After Hours program I have seen that talks up Bush's privatization plan for Social Security. A truly fair and balanced news network would provide a spokesperson with a different perspective. There are other, far less drastic approaches to keeping Social Security solvent such as raising the limit of individual contributions so that the wealthiest people would contribute more of their annual income. But those alternatives never seem to get much attention on FOX News.

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