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Thursday, August 11, 2011

Tea Party Induced Stock Market Crash A Paul Ryan Downgrade

Give "Capper" at Cognitive Dissidence the credit through all the other distractions for noticing the troubling relationship between the recent Tea Party/S&P driven stock market dive and Paul Ryan's scheme to shift SS payroll taxes to the highly volatile investment markets. That the markets have proven to be susceptible to congressional brinksmanship and political posturing makes it even less the infallible pillar of trust that is crucial to its existence.

Cognitive Dissidence Excerpt:

You will remember that Ryan, the Republicans' shining star, has, as a key part of his budget from hell, privatizing Social Security and allowing people to invest it in the stock market themselves [...]Even the bullheaded Ryan has to realize that only the extreme lunatic fringe would want to invest their retirement into the market right now. Read more here.

Or invest even a year or two ago. That's twice in the past three years and three times over the past ten years that stock market volatility has eaten away at modest gains. These are precisely the economic times Social Security was meant to protect vulnerable seniors from.

If I recall accurately here, Ryan's Social Security proposal guarantees recipients a return equivalent to a minimum standard SS benefit which means that during times like these, not only would participants lose hard-earned dollars to the profit-takers on Wall Street but government will also have to go into more debt and borrow to restore minimum guaranteed benefits. Under this scenario, Ryan's proposal transforms Social Security into a generous subsidy for private investment firms. But with losses like these, its participants would find themselves enrolled in little more than a welfare program.


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