Social Security vs 401k

This article is rife with questionable assumptions. The basic premise is that "Hah! Aren't you glad we didn't let Bush privatize your Social Security?" True, people heavily invested in securities had seen their investments decrease by one-third to 40%. But unless you were retiring in the next year or so, then you are still likely to be ahead of the game in your 401k vs. Social Sceurity.

First, the money in your 401k is yours. Unlike SS, which is nothing short of a Ponzi scheme, a 401k or IRA is always your own money (barring some sort of malfeasance on the part of your administrator). You have control over it, and you have resposibility to manage it. Social Security pays out by taking monies from current workers. The SS "trust fund" doesn't exist--rather, it is a pile of IOUs that the Government wrote to itself.

Second, under the Bush plan, only a very small part of your SS "contributions" would have been eligible for self-management. And one of the options for that sliver of money would have been US Treasuries, the only investment that SSA can "invest" their IOUs in--so you could have had the same return as SS, but would have owned the money rather than have it go to pay benifits to current SSA recipients.

Third, and finally, when SSA starts having to pay out more than they take in, they can simply invoke the power of the US Government to extract additional "returns" from taxpayers. So the so-called fragility of the market returns relative to SSA returns are apples and oranges, or rather honest men vs con artists. The 30 year ROI in the market is more than 11%. SSA's rate-of-return is a mere 1.23% by some measures, for the lowest income contributions. Higher-income contributors are less favored, since they pay in much higher contributions relative to what they can legally received. And minorty contributors are pretty much screwed with negative ROI, since they have life expectency that means their SS payout is far less than they were forced to pay into the system.