FRAMESHOP:FRAMESHOP: PERSONAL RETIREMENT ACCOUNTS (PRAS)

CAUTION - The following phrase from political debate has been recalled:

Personal Retirement Accounts (PRAs)

DO NOT USE THIS PHRASE. If you or someone you know is currently using this phrase, please go immediately to Frameshop for repairs. This phrase is widely used in Bush proposals to "fix" Social Security. Anyone currently engaged in debate about Social Security should exercise extreme caution.

WARNING: Use of this phrase will result in serious damange to political debate and harm to this country. Repeated use of this phrase will result in the proliferation of a deceptive Bush frame, the dismantling of Social Security, and the destruction of the social welfare state.

Frameshop is open...

Problem with the phrase "PRA"
The basic conservative idea behind "Personal Retirement Accounts" is to change the Social Security deduction so that a portion of it will be deposited directly into bank accounts controlled by the individual.  These accounts could then be used for investment that would, in theory, be greater than the return from the current Social Security tax.  Social Security benefits would then be lowered, easing the pressure on the system.

This scenario is false.

Bush does not want to repair Social Security; he wants to break it. Bush wants to eliminate Social Security because he believes that it is immoral for government to insure a safe retirment for Americans. To achieve this goal, Bush needs to convince Americans that Social Security is immoral. He will do this by using the PRA proposal which convinces Americans that the current Social Security structure is financially irresponsible and which invokes a "get rich quick " frame in the minds of Americans. When Bush talks about Social Security he draws attention to unfair taxes, deductions, something that makes it harder for us to make ends meet, a system that isn't working. When Bush promotes Personal Retirement Acounts, he sells the public on the idea of taking control over personal finances, striking it rich, entering free markets with unlimited gains. This argument masks the hidden agenda of President Bush.

The PRA proposal is the slippery slope initiative designed to turn our fear over a secure retirement into greed for unlimited wealth. The transfer to the new system would not fix Social Security, but would kill it. Social Security is a huge fund.  When investors pull out of a fund, its value drops. Furthermore, the costs of setting up the new system of PRAs would further bankrupt Social Security. Currently, the Social Security fund exposes pensions to a non-market risk:  our national debt.  The more national debt we have, the more risk to retirees. PRAs would expose pensions to market risk. The more PRAs there are, the higher the stakes, the more incentive for corruption, and the higher the risk to retirees.

The Cost of the PRA Plan: Thrown to the Sharks
Think Enron on a national scale. PRAs are not a way to repair Social Security.  They are a way to transfer retirement money from the federal government to the markets, and to bankrupt Social Security.
Some people will succeed with PRAs.  There are winners and losers in the markets. But investment is a busines, and the creation of PRAs will first and foremest benefit those whose business is investment.

Think of all the get rich schemes you see you TV late at night.  Ever wonder how those people make money?  The get rich quick in real estate guy doesn't make money in real estate--the get rich quick in auto sales guy doesn't make money in auto sales--the get rich quick in day trading guy--doesn't make money in day trading.  They all make their money by selling these schemes. It will be the same with PRAs.  Win or lose, the investment industry will make money.

But in an unregulated market place, who will protect the individual investor?  Eliot Spitzer only has two hands (and one of them is tied since he's running for NY governor).

Dumping millions of retirees into an unregulated marketplace would be like pouring millions of small fish into a tank filled with sharks.  Some would survive, but most would be eaten alive and quickly. And the more fish get eaten, the bigger the sharks get. To quote the movie Jaws, if PRAs are passed, we're "gonna need a bigger boat" to save retirees from carnage in the stock market.

Realigning the Frame
The frame invoked by "PRAs' is wrong on many levels. Here are some ways to think about these issues:

FREE MARKETS ARE SHARK TANKS NOT GOLDFISH BOWLS:  For people to back PRAs they have to believe that free market or idyllic and safe. Goldfish bowls where everybody wins, and living is easy.  This is false.  In the free markets, only the big fish win.  Small fish get eaten.

GET RICH QUICK SCHEMES ARE SCAMS, REDUCING SPENDING IS RESPONSIBLE:  To back PRAs, people must believe that wealth doesn't come from savings and responsible spending, but from get rich quick schemes.  All you need is a little money and poof!  You're a millionaire.  This is false.  Get rich schemes benefit those who sell them--in this case, Bush is selling this scheme for the investment industry.  

INVESTMENT ACCOUNTS ARE ALWAYS RISKY, SOUND POLICY CAN TAKE THE RISK OUT OF SOCIAL SECURITY:  The risk to social security is a rising national debt.  We can reduce that through sound fiscal policy and investments in this country that spur growth.  Investments, on the other hand, are founded on risk.   No risk, no return.  Period.  That's how they work.  And they are only protected up to a point.  If PRAs are approved, you can bet the next proposal will be to dismantle the FDIC so that individuals are no longer protected if their investments tank.

AMERICANS VALUE THEIR CHILDREN MORE THAN THEY VALUE THEMSELVES:  The PRA concept invokes an image of Americans whose greed for themselves outweighs their desire to insure their children's future.  This is not the America I live in.  Bush is wrong if he sees a country full of greedy parents.  Our grandparents invested in the system so that our parents could benefit.  Our parents have the same idealism as our grandparents.  They love their children more than they love themselves.  

New Language to Use instead of PRA
These phrases can be used to turn the GOP frame on it's head, as counter punches in political debate:

• "SHARK TANK": Invokes a frame where individual investors are small fish in a dangerous free market
• "ENRON ALL OVER AGAIN": Invokes a frame where the world of the PRA is the world of quick rich quick schemes.
• "WELCOME TO POTTERSVILLE": Invokes the movie It's a Wonderful Life  to make the point that the world without Social Security, retirees will be at the mercy of angry tycoons.

These phrases can be used to make draw attention to the problematic Bush language and to help Americans understand and believe in Social Security:

• "GIFT TO OUR CHILDREN": invokes an accurate frame of this  country where parents care more about their children than themselves and are happy to invest in their future, even if they don't reap immediate rewards, today.
• "SAFETy FOR SAVINGS": Invokes the frame of the markets as a hostile place for investors, and Social Security as protection against an unsafe world of investment.
• GRANDPARENTS ARE THE BEST INVESTMENT: invokes a frame of a country that values its grandparents more than it believes in quick rich schemes.
• AMERICAN'S BELIEVE IN GEORGE BAILEY, NOT MR. POTTER: Invokes the movie It's a Wonderful Life, where hopeful working class Americans unify and win out over a greedy corporate scoundrel--a scoundrel who looks remarkably lkie Dick Cheney

Update [2004-11-20 15:37:53 by Jeffrey Feldman]:
Many great ideas for PRA redirects popping up in the comments. I've pulled up just a few, here.

PRAs are:

• Homer Simpson Retirement Plan (Doh!)
• Wall Street Welfare
• Personal Risk Accounts
• Pension Rip-Off Accounts
• Las Vegas Economics
• Put your money at Risk Accounts
• Stockbroker Relief Program

[The original DailyKos discussion generated by this session of Frameshop can be found here]