Bush's "Ownership Society"

[Swing low, sweet chariot. Comin' for to carry me home.]

Bush has a theme, the "ownership society," and a fat agenda that includes "lifetime savings accounts"--essentially tax-free IRAs with no penalties for withdrawal--and Social Security investment accounts. Bush's idea is to give Americans ownership of their money for retirement, health care, and everything now in the hands of government or other providers. Achieving all this would be a major feat, almost as amazing as what Bush wrought in late 2003.
(from Fred Barnes, Weekly Standard)

---

I like the idea of lifetime savings accounts AND the Social Security investment accounts.  

The rate of return (interest gained) on Social Security is very tiny...worse, the rate of return is FAKE because taxpayers pay the interest.  Instead of paying into Social Security, it would be much better to stick that money into performing assets that give a better and REAL rate of return.

[dazzleman]

I think this is the necessary next phase in creating greater opportunities for economic security for individuals.

The first phase was no security, period.  You ate if you worked, but if you got old or sick, forget it.

The intermediate phase is the one we have been in since around the time of the New Deal.  This includes government-administered retirement programs, unemployment and disability insurance, and medical care for the elderly.

This intermediate phase is showing signs of burning out as government mismanagement of these programs, as well as the entitlement mentality that grows around them, has severely hindered their effectiveness for the future.  Social security as currently structured cannot last past the next generation to retire, whether those who argue in favor of continued government control (Democrats) admit it or not.

The new "ownership" phase would incentivize people to provide for their own security, and decentralize contol of these asset in individual hands rather than centralizing it with the federal government.  It is kind of like comparing a program of home ownership to one of public housing.  I would choose home ownership any day, and the government has very successfully encouraged this when you consider that during the depression, the vast majority of Americans lived in rental housing, while today the majority are owners.

This devolution of control from the government to individuals will profoundly affect the nation's politics, and the Democrats will fight it tooth and nail because it effectively means that they lose control over a lot of votes.

It should be interesting, but I am all for the "ownership" society as long as the transition is very carefully administered.

[jaichind]

Perhaps this plan could push up the savings rate in the USA and reduce the current account deficit.  Problem is if this does work and has the effect I noted above the consumer based economy in the USA would slow in the short run and could have negative consequence for the GOP in 2006.  Bear in mind, a good section of the USA GDP is based on markup of imports of consumer goods.  If comsumption slows in response to more incentives for savings then the entire economy will be hit.

[zorkpolitics]

The Ownership Program which hopes to transformation College IRAs, retirement IRAs, 401Ks, and perhaps a fraction of Social Security into a single vehicle to accumulate assets, will make it even easier to accumulate wealth and provide family's a chance to improve economically.  
It will also accelerate the trend to turning the US into a investor class rather than a working class.  Not surpassingly the GOP, hopes this will solidify their position as the dominant party.
Anti-poverty programs have spent over $3 trillion dollars since 1960, geared to providing a minimum cost of living, which has had an unintended consequence of creating a class who worry more about "their benefits" than about improving life for themselves and their children.  The welfare limitations of the Clinton administration were the first successful program to substantially break this dependency.  Potentially the new Ownership Program could provide incentives to improve the economic well being of the middle class and the poor.  Here the intended consequence is to reward work with wealth.