We hear daily about the Cain tax plan of 999….everybody is all a twitter (the feeling not the social media) about his plan….but I want to talk about what he has in store for Social Security……but first……Cain’s economic adviser is NOT an economist…..the “999″ plan was dealt its biggest blow when one of Cain’s own economic advisers said it wasn’t a tax plan he would back. While Gary Robbins, who scored the plan for Cain’s campaign and is a paid consultant, praised the plan, he made it clear that it wouldn’t be the plan he picked.  That pretty much tells you just how effective it would be…..

But let us move on…..Herman Cain likes to call his proposal for Social Security as the “Chilean Model”……okay but what is the “Chilean Model”?  In short, the Chilean Model — if actually enacted and administered as it is in Chile — would be a far, far cry from the abolition of the welfare state. Instead, it would represent government partnering with private business in order to administer the social welfare guarantees that conservatives are often so quick to denounce.

Under the Chilean system, workers must contribute 10% of their income, up to a certain limit — similar to Social Security taxes in this country — to a private pension fund administrator.

Workers then choose which funds to invest in, according to the different classifications of risk levels. But even then, there is no true free-market risk of total failure and being left out in the cold — at least, not for the pensioners.  In fact, the government has maintained a social guarantee of minimum pensions for retirees. Thus, in case of serious under-performance or losses by a fund — or outright bankruptcy of a failing AFP — the government will essentially perform a bailout of retirees, by paying for the difference up to the minimum benefit. Indeed, the reforms that have taken place in the system have been done to address the wide-ranging low payments from the system, with expanded efforts to cover poorer workers and to increase the minimum benefits that the government will provide.

In other words….it is a snow job that still requires governmental involvement…if in fact he is proposing using the Chilean Model…..so just like his fallacy of the 999 Plan so goes his Social Security plan….maybe he should spend more time on the mechanics of his plan and less time doing interviews that he pisses up every time he opens his mouth…..just a thought!