OUR SOCIAL SECURITY SYSTEM LOOKED UPON A MODEL BY THE U.K.

Thanks to the Miami Herald Infomaniac blog for the heads up:

The U.K.'s Financial Times Senior Writer Norma Cohen noted in the recent American Prospect that Britian has tried privitization of their equivilant of Social Security, with none-too-good results:

"A conservative government sweeps to power for a second term. It views its victory as a mandate to slash the role of the state. In its first term, this policy objective was met by cutting taxes for the wealthy. Its top priority for its second term is tackling what it views as an enduring vestige of socialism: its system of social insurance for the elderly. Declaring the current program unaffordable in 50 years’ time, the administration proposes the privatization of a portion of old-age benefits. In exchange for giving up some future benefits, workers would get a tax rebate to put into an investment account to save for their own retirement.

"George W. Bush’s America in 2005? Think again. The year was 1984, the nation was Britain, the government was that of Margaret Thatcher -- and the results have been a disaster that America is about to emulate."

" ...the government was spending much more than it was saving by bribing people to leave SERPS (State Earnings-Related Pension Scheme). What had once been a £1.6-billion surplus in the National Insurance Fund vanished completely. Worst of all, many workers left good occupational plans and faced being worse off, not better off, in retirement by depending on the privatized schemes."

Now, check this out...

"And so, at the exact moment that America contemplates replicating this disaster, many in Britain -- some conservatives included -- are looking more and more kindly on American Social Security as a model for reform. The National Association of Pension Funds, a group of employers who sponsor the nation's largest schemes, is urging government not to expect the private sector to shoulder the burden of keeping the nation's elderly from poverty. Chief executive Christine Farnish notes that it's "actually cheaper for the state to carry the risk," adding that in looking for a system that offers the best combination of modest guaranteed retirement benefits delivered at low cost, the U.S. Social Security program seems the best model. "It doesn't have to make a profit, and it delivers efficiencies of scale that most companies would die for," she says."

We cannot say we have not been forewarned...