The Feel Good Legislation of the Year

There's a catch to the President's privatized Social Security account idea. You might not get back any more money than you would under the regular Social Security system. But it's supposed to make you feel good about the economy.

The math's a little hard to follow. The Washington Post even admitted it got the workings wrong.

Here's how the President's plan is supposed to work. Every dollar contributed to the President's private fund is taken from your guaranteed Social Security benefit -- plus interest. That interest is 3%. But the rate of return on the private plan is estimated at only 3.3%. So you don't wind up with all that much more money.

Say you set aside $1,000 a year for 40 years. Your payoff is all the money you put in, plus the return on that investment, MINUS what you would have gotten from Social Security. That adds up to a lifetime, grand-whopping $21,000.

Brookings Institution economist Peter R Orszag says it's like a loan to play the stock market. He says you have to pay back the loan with interest out of your monthly Social Security checks.

That would leave your benefits roughly the same, but you'd be drawing them from two seperate accounts -- Social Security and the private account.

Stephen Moore of the Cato Institute says by leaving the money untouched, though, you'd have a sense of ownership in the economy. Part of that "ownership society" the President talks about.

But while you may own the money, Wall Street gets to borrow it -- and play with it. The private accounts are supposed to be worth trillions over the next generation to the financial industry -- source of the some of the President's biggest campaign gifts in the last election. (WashPost)