—George W. Bush, Washington D.C., April 14, 2005
From Crooks and Liars
Remember when Bush tried to privatize Social Security? Let's ask the Italians how that worked out for them:
Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.
***The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns. Anger is rising both at the state, which promoted the change, and money managers such as UniCredit SpA and Arca Previdenza, which stood to profit.
Prime Minister Silvio Berlusconi’s administration is now considering ways to compensate as many as 1.2 million people who made the switch, giving up a fixed return for private plans linked to financial markets. It’s also letting people delay redemptions on retirement funds to avoid losses after Italy’s benchmark stock index fell 50 percent in 2008, destroying 300 billion euros ($423 billion) in wealth... read on
DAR
And again, the priceless explanation of the problem by Bush:
"Because the — all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those — changing those with personal accounts, the idea is to get what has been promised more likely to be — or closer delivered to what has been promised. Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the — like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate — the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those — if that growth is affected, it will help on the red."
—George W. Bush, explaining his plan to save Social Security, Tampa, Fla., Feb. 4, 2005