"They are trying to destroy Social Security by giving the money to the fat cats on Wall Street" - Senate Minority Leader, Harry Reid (D-NV)
Excuse me Senator Reid, what happens to Social Security tax revenues today? They are "borrowed" by the Congress to pay for current Federal spending. It sounds like the Senator's complaint is a case of the fat cats in Congress worried about Wall Street fat cats cutting in on their territory.
But, the fat cat label rings pretty hollow in a nation in which more than half the working population has investments in the stock markets; and it is worth noting at this point that the fairly recent phenomenon of broad-based stock ownership was spawned by President Reagan's introduction of IRA's and other tax-deferred retirement savings accounts, and that Reagan was likewise accused by Liberal Democrats of pillaging working people to enrich the wealthy. Yet, Reagan's policies have done more to increase the net worth of working people than all the government handouts ever devised by "compassionate" Liberals.
A rise in the value of stock markets, brought on by the vastly increased demand for equity investments which would attend the creation of Personal Social Security Accounts, would cause an increase in the wealth of almost everyone invested in the stock markets (and certainly of small investors who tend to own lower risk diversified mutual funds). But, besides the benefit to middle-class investors, this rise in value would also mean a benefit to upper-class investors, and that is unacceptable to Liberal Purists, no matter how good it is for the working people they supposedly speak for.
Harry Reid, for his part, may not be a Liberal Purist; but he is a Democrat Partisan, who understands that the Social Security entitlement has been instrumental in maintaining his Party's electoral coalition for over half a century. One of the less sinister interpretations of Reid's knee-jerk opposition to reform is that it is motivated by fear of the unknown. But, Democrat political security in the status quo may be an illusion, judging by the demographic trend toward this becoming a nation of investors - what President Bush calls "an ownership society" - and Democrats are likely to pay a heavy political price for choosing the wrong side on Social Security reform.
So, will Democrat Party leaders see the wisdom of an alternate approach to the politics of Class Warfare, demonization and obstruction. Harry Reid's remarks suggest that no such fresh thinking will result from his ascension.