What, then, does Cummings have in mind when he says that blacks "can't afford having their money going into private savings accounts"? Isn't it exactly the opposite? It seems that blacks cannot afford to NOT do this.
A few years ago, the Consumer Federation of America and BET initiated a joint project to address the problem of wealth accumulation in the black community. That project, in 2002, reported that mean black household wealth was $15,500 compared to the mean nationwide household wealth of $76, 700.
The wealth gap is real, and blacks continue to lag well behind.
Consider that, at a mean annual household income of less than $30,000, the typical black household does not have much spare cash to save. Also consider that most black wage earners pay more in Social Security taxes than in income taxes. The 12.4 percent of every worker's paycheck that gets diverted to Social Security is really the only possible chunk of cash that might otherwise be used for saving and accumulating wealth.
I can think of little that would provide a greater boon for the creation of wealth in black America than a provision that would allow black workers to divert their Social Security tax into an individually owned retirement account.
Now, of course, Cummings is going to tell us that putting funds into a private retirement account is risky. But, the fact is that investing over 40 years in a highly diversified fund of stocks and bonds is not a risky endeavor.
If Cummings questions this, we should have the discussion and put the facts in front of black America. To preclude having this discussion, when there is substantial opportunity to enhance the wealth of every black citizen, is simply irresponsible.
Black politicians are, unfortunately, playing on the fears of constituents. I also talk to black citizens and I know many are afraid. They have so little experience with ownership and investing that the prospect of getting off the government plantation scares them.
Simple investing is not rocket science. The fact that so many black Americans do not know the basics is all the more reason to consider this important reform.
You would think that black politicians would view the prospect of wealthier and better-informed black citizens as positive. Why don't they?