Now we know from the White House that there is no Social Security crisis and that private accounts won’t guarantee the program’s solvency only cost trillions of dollars and require massive benefit cuts.
On the other hand, there is still that Ownership Society Holy Grail, resplendent in all its glory, the ability to pass your private account on to your heirs.
Only, apparently not.
It’s been mentioned here and there. But it turns out that you can’t do that after all. In fact, probably only if you’re an upper-income earner will you ever be able to get your hands on any substantial part of it, let alone pass it on to the kids, the alma mater or your favorite pet.
Under the Bush plan, when you retire you are mandated by law to use your private account funds to purchase an annuity substantial enough to keep you above the poverty line for the rest of your life. (I guess that whole letting people decide what to do with their own money bit only goes so far.) You’d have to figure that for most retirees that would run through pretty much the whole stash or at least the lion’s share of it. And when you die, that’s it. By definition, you can’t pass on this kind of annuity.
So under the Ownership Society the wealthy can pass on their savings, but for middle income folks and the working poor, no such luck. Which, come to think of it, sounds a lot like the rentership society, or whatever benighted age it is we’re supposed to be living in now.
So you may not get to pass on your wealth. But at least you have a guarantee that you won’t outlive it. Which, come to think of it, sounds a lot like the Social Security, only now with the added benefit of no guarantees and financial services firms to skim off their own cut by managing your account and selling you your annuity.
