NCPA - National Center for Policy Analysis

AARP'S DECEPTIVE AD BLITZ

January 7, 2005

The AARP (formerly known as the American Association of Retired Persons) and President Bush are about to duke it out in a slugfest over a Social Security overhaul. The AARP began an ad blitz this week to try to preempt a partial-privatization plan Bush will make public next month.

On the Social Security issue, Bush is right and the AARP is wrong, says USA Today founder Al Neuharth. Here's why:

  • The Bush plan would not affect current retirees and probably not be available to those still working who are 50 or older.
  • It would be strictly voluntary and simply permit younger workers to invest some (maybe up to $1,000 a year) of their Social Security payroll taxes into private retirement accounts.
  • The math is not simple, but the results are staggering: $1,000 invested annually in the stock market, with its historical 10 percent-a-year-average return compounded, would grow to more than $440,000 in 40 years.
  • A $1,000 investment every year for 50 years would balloon to more than $1.15 million.

A Bush-like privatization plan is the only sure and safe way for young workers (future AARP members) to avoid being at the mercy of future governments, says Neuharth.

Source: Al Neuharth, "Use, abuse of power: Bush and the AARP," USA Today, January 7, 2004.

 

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