Scott Bessent says the quiet part out loud
Speaking at a Breitbart event, Treasury Secretary Scott Bessent crowed about the new “Trump Accounts” in which the the parents or employer can contribute up to $5000/year. The funds are to be structured like IRAs and must be invested in portfolios tied to U.S. stock indexes. Quoth Bessent:
“In a way, it is a backdoor for privatizing Social Security,” Bessent said at the Breitbart event. “If, all of a sudden, these accounts grow and you have in the hundreds of thousands of dollars for your retirement, that’s a game-changer, too.”
First of all, if “all of a sudden” these accounts exploded to hundreds of thousand of dollars, that will be because of a sudden massive increase in inflation. Which means those hundreds of thousands of nominal dollars aren’t going to buy hundreds of thousands of dollars in goods and services in retirement. Either Bessent doesn’t understand how money works or—more likely—he’s selling snake oil.
Secondly, where are tens of millions of American families that are scraping by month by month going to find an additional $5000/year? Since many or most of them are paying little or no income taxes, how will they be incented by a tax-deferred account? Why should their employers, who are already paying part of their SS, pony up $5000/year?
Of course, none of this makes sense except as a way to undermine and eventually privatize Social Security. But apparently Bessent got spanked for admitting the truth and had to backpedal.
“Later on Wednesday, Bessent clarified in a post on X that the new Trump accounts “are an additive benefit for future generations, which will supplement the sanctity of Social Security’s guaranteed payments.” He added: “This is not an either-or question: our Administration is committed to protecting Social Security and to making sure seniors have more money.”
Want to make sure seniors have more money? Support unions and higher-paying working-class jobs. Support single payer healthcare. Fully fund Social Security when the trust fund runs out in 2033.
Look, Bessent and the rest of the GOP billionaire elites in the Trump Administration didn’t get rich by investing a few thousand a year in index funds. And they all know very well that the stock market goes down as well as up. This isn’t a scheme to help the working class to a better retirement, it’s the first step in a long-term plan to wean Americans off Social Security and divert their retirements into the pockets of investors. The only surprise is that cryptocurrency isn’t an allowed investment. Yet.
Bessent confesses Trump plan to privatize Social Security
As an another additional way to fund retirement, this is OK. Instead of SS? Not on your life.
It looks like a way to make sure everyone has too many assets to be eligible for aid. And a way to control a lot of money.
Jane:
That is a given. There has to be something besides 401Ks, savings accounts, and being rich enough to toss money into the proposed savings. Social Security fills that niche.
@Jane,
In principle, SS is retirement insurance. Unfortunately, for a lot of Americans, it is the main or only source of retirement income. Fortunately for them, it can keep them from having to sleep under a bridge and eat grass.
I wonder if Bessent has ever heard of the paradox of thrift. He just wants Wall Street to get a bigger chunk of money to take care of his buddies.
Why do you suppose Bessent would say such a politically hazardous thing? Obviously, he tried to walk it back but it was a reckless thing to say in the first place.
@Jack,
There has been no shortage of reckless statements and actions from Trump and his appointees. It’s their brand.
They think they’ve “won” and there’s nothing to be done
It’s not clear that he isn’t seeking reelection, the law be damned!