Economy

Three Years After The Financial Crash, GOP Candidates Revive Desire To Privatize Social Security

Since jumping in the race, GOP presidential front runner Gov. Rick Perry’s (TX) radical views on Social Security have garnered the most attention. And for good reason, as Perry lands far to the right of even his most right-wing opponents in calling the entitlement program a unconstitutional “Ponzi scheme.” A fan of secession, Perry even suggested letting individual states “secede” from Social Security altogether.

But Perry’s extremism is taking focus away from the fact that most of the top contenders also embrace a radical idea: Social Security privatization. As the AP reports, most of the top Republicans running are reviving President George W. Bush’s unpopular plan to create private investment accounts for young workers — believing that “workers could get a better return from investing in publicly traded securities.” Indeed, the idea of risking retirement funds in the stock market — three years after the financial crash on Wall Street — is finding a champion in almost ever Republican candidate:

MITT ROMNEY: The former Massachusetts governor has a well-worn record of advocating to privatize Social Security. In 2007, when Romney was also running for president, he pushed for the creation of Social Security personal accounts three separate times. When a town hall attendee told him such a plan was “privatization,” Romney replied, “you call it privatization. I call it a private account.” He enshrined this position in his 2010 book No Apology, stating “individual retirement accounts would encourage more Americans to invest in the private sector that powers our economy.”

MICHELE BACHMANN: In an interview last year, the Minnesota congresswoman insisted young workers “need to have some options in their life, so that going forward they can have ownership for their own Social Security, their own retirement, something they can pass on to the beneficiary of their choice.” When asked in 2008 how Republicans could promote privatization without frightening seniors, she responded, “I believe that we should ensure that those currently receiving Social Security should continue to do so in its current form, but also give a new generation of workers the right to invest some of their money into accounts of their own.” In 2006, she pledged to vote for “regulated individual retirement accounts.”

RON PAUL: During last week’s presidential debate, Rep. Paul (TX) drew applause for stating, “What I would like to do is to allow all the young people to get out of Social Security and go on their own!” He told CNN’s Wolf Blitzer last year that he’d support “turn[ing] this money over and give the individual money like an investment retirement fund that they manage.”

RICK SANTORUM: After writing an op-ed calling to “establish personal retirement accounts” in 2005, the former Pennsylvania senator actually launched his 2012 presidential campaign by reminding everyone that he supports these President George W. Bush-style private accounts. He hedged last month on calling for the immediate creation of accounts, but only because having to additionally pay for Social Security benefits while financing such accounts “is to me just something that we can’t do right now.” “I’d love to be able to do it,” he added.

HERMAN CAIN: In the Tea Party debate last week, the pizza mogul declared, “I support a personal retirement system option in order to phase [out] the current system. We know that this works.”

NEWT GINGRICH: Last year, the former House Speaker endorsed House Budget Chairman Paul Ryan’s (R-WI) plan to create personal accounts. He believed such a plan would “triple the earnings” for future retirees. He has touted such a plan since 2007.

Jon Huntsman has not specifically called for private accounts but he did say at the Tea Party debate that “I don’t think anything should be off the table.”

A Social Security policy that ties retirement funds to the volatility of the stock market is nothing short of foolhardy. Three years ago, if Bush had succeeded in creating private accounts, an American worker would have lost $26,000 on the market. As ThinkProgress’ Travis Waldron notes, millions of Americans who did have a private account like a 401(k) lost nearly everything in the crisis, and Social Security is the only source of retirement funds they have left. The volatility of market behavior in large industrialized economies like ours “illustrates the real potential for decades-long declines that could erode the value of a private retirement account invested in stocks.”

There are better, safer ways to ensure that Social Security is solvent for the next 75 years. But as long as Republican candidates refuse to learn very recent lessons from the past few years, they will cleave to policies that endanger the golden years of millions of Americans.