Despite Market Plunge, DeMint Calls For Privatizing ‘Socialistic’ Social Security

Last week, Sen. Jim DeMint (R-SC) sent out a recruitment call for “new Republicans,” confirming that he sees “little use for a big-tent approach for his party.” As South Carolina’s The State put it, DeMint is setting himself up as a kingmaker, wading into national races to endorse far-right candidates.

And one of the issues about which DeMint feels very strongly is Social Security. In an interview with Bloomberg News’ Al Hunt, DeMint blasted Social Security as “socialistic,” and advocated reviving President George Bush’s Social Security privatization scheme:

DeMint considers Social Security a “socialistic” measure and blasts the American Association of Retired Persons for promulgating “socialist solutions”…In the interview, he talks of reviving President George W. Bush’s failed plan to partially privatize Social Security by having workers put a small percentage of the current levy in a personal savings account.

As CNN Money’s Allan Sloan wrote back in January, “someday, Social Security privatization will come back into vogue. When that happens, I’ve got two words that will remind you why it’s a bad idea: Remember 2008.” It’s quite shocking that we’re not even through 2009 yet, and 2008, at least for DeMint, is already forgotten.

But let’s review. As a Center for American Progress Action Fund report found, under a Bush-style privatization plan, a October 2008 retiree would have lost $26,000 in the market plunge. If the U.S. stock market had behaved like the Japanese market during the duration of that retiree’s work life, “a private account would have experienced sharp negative returns, losing $70,000 — an effective -3.3 percent net annual rate of return.” And this doesn’t take into account the full plunge of the stock market, which dipped below 7,000 in March 2009.
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