The Ownership Myth

In his speech in Detroit, President Bush said, “A personal account would be your account, you would own it, and the government could never take it away.”

FACT: President Bush is trying to capitalize on the fact that Americans like to own things to sell his program to chop Social Security benefits. The reality of his plan is a far cry from the private ownership he’s touting, however. For example, instead of private plans that let Americans control their own investments, there are tight restrictions on which conservative stocks and bonds the public will be allowed to buy. And, the New York Times writes, “the more restrictions there are, the harder it would be for people to achieve the outsized returns the administration has generally promoted to sell the public on private accounts.” Also, Bush has played up the fact that his accounts can be passed on to one’s heirs. In reality, unless you die before you retire, there’s not going to be a lot to bequeath. Retirees under the Bush plan will be required to use the money in their accounts to buy the annuities that will then provide them with their post-retirement income. The only money left to pass to heirs is whatever is left over — if anything — from purchasing the annuities. As Business Week puts it, “The problem isn’t the restrictions on ownership in the Bush plan. It’s the false billing, which is aimed at drumming up support from a skeptical public.”