My chiropractor is a nice guy - a Republican, but open-minded. But because he's so busy, he doesn't know that much about what's going on (like the majority of Americans). I think he's fairly representative of the interested but under-informed voter.

Anyway, he asked me if I'd seen the Republican presidential debate; he wanted to know what I thought. "If I were a Republican? The only one I'd consider voting for is Huntsman," I said. "But of course you have to be a nut to win the Republican primaries."

"I thought Herman Cain seemed pretty smart. He was talking about making Social Security like the Chilean model," he said. "What do you know about that?"

"Oh, jeebus," I said. "The Chilean model. The same one that right-wingers have been trying to shove down our throats for 30 years." (This was all mumbled, since I was face down on his table at the time.)

"First of all, it was a mess. It was imposed by Pinochet under his military dictatorship, and the generals revolted. They insisted they get to keep the old plan, and they did. Second, a lot of people didn't get anywhere near the money they actually needed to retire, but the administrators made a fortune."

I didn't even get into the meat of it. Chileans were charged exorbitant fees (15 to 20 percent for all costs) in order to choose which pension fund association in which to invest. Depending on which risk level they choose, they're equivalent to our mutual funds, IRAs or CDs; by law, they have to have a minimum return. From Contingencies, the magazine of the American Academy of Actuaries, March/April 1998:

There are currently 13 privately run AFP's authorized to manage a private pension fund covering a group of workers. The original 12 in 1981 grew to 22 in 1993, but competition caused this to fall to 13. Investments now totaling around $30 billion are regulated by law, and about 28 percent is currently invested in equities, 42 percent in government bonds, 30 percent in Chilean financial institutions and companies, and a small amount in foreign securities.

So it's not like you get to watch CNBC all day and make a killing in the stock market -- you're limited to the official funds, and they all have roughly the same investments. And it's a much better deal for someone with a big paycheck. (IIRC, a big shortfall was caused by the fact that women, especially poor women, dropped out of the job market to raise children or take care of a sick relative. So when it came time to retire, they had very little money from which to draw. They since added a minimum benefit -- gee, sounds almost like their original Social Security program!)

The article goes on to warn about the private plans being pushed by Republicans at the time:

Continue reading »

What a dope. "I've since been studying, and Chile has done this..." During the time of Reagan, Chile's Social Security system was considered to be the wingnut Holy Grail. I guess Sharon didn't get too far in her "studying" and whatnot, or she'd know why the saner people just don't talk about Chile in much detail (of course, there's always the optimists at the Cato Institute):

Republican U.S. Senate hopeful Sharron Angle says the nation's Social Security system needs to be privatized, and she says it was done before in Chile.CBS affiliate 8 News Now reports on what the Tea Party-backed hopeful had to say on the matter in an interview on Thursday:

...Angle's new ads say she's out to save Social Security by protecting it from government raids.
But in the primary, she said that Medicare and Social Security needed to be phased out in favor of something privatized, saying, that it can't be fixed. 8 News NOW asked how is that not a flip flop.

"It is when we have a $2.5 trillion raid and pillaging going on and an empty trust fund and now we are upside down. As of last Friday, they said, (there was a) $41 billion shortfall in Social Security. $41 billion less going in than coming out. It's broken," she said.

Angle then referred to 1980s Chile -- then under a military dictatorship -- to explain her previous statements that the United States should phase out its current system.

"When I said privatize, that's what I meant," explained the Senate contender. "That I thought we would just have to go to the private sector for a template on how this is supposed to be done. However, I've since been studying and Chile has done this."

However, the pension system established in 1981 by right-wing Chilean dictator Augusto Pinochet is no longer a fully private system. Chile's system was revamped in 2008 to expand public pensions for groups left out of its system, including low-income seniors.

There are lots of reasons why, in the real world, a privatized system doesn't work.

For the first ten years, while Chile had high inflation, their investment funds did well, since about half was invested in government bonds that were indexed to inflation. But once the economy cooled down, returns fell and they now pay little in return.

Investors also pay very high fees, which hit the low wage earners harder. (Oh, and by the way? The funds are widely thought to be corrupt cartels, protected by the government. Of course, that would never happen here!) And low wage earners were notorious under-reporters of income. Another problem: the system isn't set up for short-term contract work, which is now a common form of employment.

The funds don't pay out much, especially for low wage earners. (Unlike our Social Security system.) Notice the stories the wingnuts quote all point to "average" return -- but that's artificially high due to the period of high inflation.

And it didn't pay, anyway. Because of transition costs and other factors, the Chilean privatized system costs three times as much to run.

But the regime knew what they were doing: They excluded the military from the private plans, members of which continue to receive pensions under the old, more generous system.

Bush pulls top security agent from Chile fracas

President’s lead bodyguard in scuffle outside elegant dinner.

Video

Bush still can't Speak!

Bad joke, Click the picture for video.

bumbled words,

priceless!

A little fun with Bush!

Unrest ushers in summit in Chile

At least 25,000 march on eve of Asia-Pacific forum

SANTIAGO, Chile -- The largest protest march since Chile's military dictatorship ended 14 years ago turned violent Friday when demonstrators waged intense street battles with riot police hours before President George W. Bush arrived for a summit of Asia-Pacific leaders.

This is horrible:

A devastating magnitude 8.8 earthquake struck Chile early Saturday, toppling homes, collapsing bridges and spawning a tsunami that threatened every nation around the Pacific Ocean — roughly a quarter of the globe.

Chileans near the epicenter were tossed about as if shaken by a giant. It was the strongest earthquake to hit the country in 50 years and one of the strongest ever measured anywhere. President-elect Sebastian Pinera said more than 120 people died and the toll could climb higher.

Local radio reported up to 150 could have been killed or hurt in a collapsed 14-story building in the hard-hit Concepcion, where firemen were working to put out fires throughout the city. One fire was in the science department in the local university.

Chile was the site of the strongest earthquake ever recorded -- a 9.5 shaker in 1960 -- and its infrastructure is reasonably well prepared for a quake. Hopefully, the death toll will not climb too much higher.

Meanwhile, they're watching carefully for a possible tsunami in Hawaii.

Hannity spun the Chile pension plan pretty good when Social Security was Bush's main platform before he lost it. Atrios finds this NY Times story:

"Michelle Bachelet is a pediatrician and a Socialist, while Sebastián Piñera is a billionaire businessman and a conservative. They may agree on little as the opposing candidates in Chile's election for president, but they concur on one important point: the country's much vaunted and much copied privatized pension system needs immediate repair....read on"

Chile switched to a privatized pension system nearly 25 years ago, and millions of workers still fall through the cracks

via LA Times Weary from decades of working nights and weekends at a public hospital, nursing assistant Inelia Pardo Acevedo recently retired.

But the 64-year-old plans to look for a part-time job to pad the nest egg in her personal retirement account. The $225 a month she draws under Chile's privatized system doesn't stretch far. And what galls her is that colleagues who stuck with traditional pension plans get three times as much, guaranteed for the rest of their lives.

The government "painted this wonderful picture of private accounts," Pardo said. "They fooled me. They fooled us all." ...read all

So is this the model that the RNM is using as their"example?" I find it hard to imagine that for the almost thirty years George W. Bush has had to ponder how to dismantle Social Security, he doesn't even have a plan to unveil to the American people. No wonder Speaker Hastert has his doubts.