Wednesday, February 9
Just face it Amerika, the Chinese have you by a big fistful of your collective short-and-curlies.
But here is the really funny thing about the personal/private accounts debate. Not only are they not personal accounts, they're not private accounts either. They are in fact US government loans. (Bear with me now, because this will only hurt for a moment.) You see, your payroll taxes will still be used to cover the benefits of current retirees, but under Bush's scheme the government will place a certain "diverted" amount into an account in your name. It sounds like a personal retirement account, but it's not. It's a loan. Because if your account does really well (above 3 percent), when you retire the government will deduct the money it lent you (plus 3 percent interest) from your monthly Social Security check leaving you with almost the same amount you would have received under the current system. If your account does really poorly (below 3 percent), you are out of luck. According to Congressional Budget Office, the expected average return will be 3.3 percent, so the net gain will be zero.
But wait, it gets better. These personal accounts aren't exactly US government loans either, because our government under the fiscal stewardship of George W. Bush no longer is running a surplus and therefore does not have the $4 trillion or so needed to cover the transition costs, and Bush refuses to raise taxes on his base (BUSH'S BASE, n. the wealthy).
So our government will have to borrow that cash. And if the last three years are any guide, our largest single loan officer will likely be the Central Bank of China. And who runs China's Central Bank, China, and the Chinese people with an iron fist? Why, it's our old friends, the democracy-loving, freedom-marching Chinese Communist Party. So Bush's personal retirement accounts=private retirement accounts=US government loans=US government borrowing=Chinese government lending=Chinese Communist Party loans.