The wild stock market fluctuations have wiped out $2 trillion in private retirement accounts in the last 15 months.
If John McCain and George W. Bush had had their way, millions of worker’s Social Security benefits would have been at risk.
To illustrate this risk, a new analysis from the Center for American Progress Action Fund finds that a retiree with a private Social Security account invested in stocks, along the lines of those proposed by President Bush and supported by John McCain in 2005, would have lost approximately $26,000 if they had retired on October 1, 2008 after 35 years of contributions to such an account.
Read the full analysis here.
But it could have been even worse. If the U.S. economy had undergone a decades long slump and performed like the Japanese economy over the past 35 years, the account would created a loss of almost $70,000.
In a rosier scenario, if the U.S. market had performed like the German market, a worker would have made almost $40,000 in their account. But this radical unpredictability is precisely the reason why draining trillions from Social Security to pay for these accounts is a very bad idea.
Check out a review of what the research from the 2005 Social Security privatization debate can tell us about John McCain’s plan to put retirement security on the stock market here.
To oppose the privatization of Social Security, sign the “Golden Pledge” here.