Saturday, January 22, 2005
Privatization: How the Brokerage Firms Would Work It
Before I started this blog, I was (and still am) a regular poster on Table Talk, the collection of message boards run by Salon. Some of my best ideas have come from that place. I was in Table Talk's "White House" folder, in the Paul Krugman, when I found this posting by another longtime TTer, AndyF. I asked his permission to share it with y'all, and he gave it. So here it is, with grammar and spelling slightly cleaned up (hey, if the press can do it for Bush, I can do it for AndyF), and some bolding thrown in:
Krugman made some excellent points on the Al Franken show a few days ago. The number most often quoted for privatization is 2% of gross income. That would average about $800 per year. Many people would contribute much less. A brokerage doesn't want to deal with $800. You might be offered a few mutual funds. It then occurred to me that I know exactly what these guys will do. They will try to sell aditional services. You want to trade your mutual fund more than once a year? There's a fee for that. You want more options? There's fees for that too. Then there will be the shady guys that try to sell shares in their snake oil fund. Pretty soon you're paying fees up the wazzoo. They'll bill you separately, so your $800 will remain intact and you might not notice, but in reality you will be losing money.This is why many brokerage firms are so eager to sign on to this deeply stupid, deeply evil idea to destroy Social Security while pretending to save it from a "crisis". Once again, There Is No Crisis:
More blogs about politics.
