Social Security Reform: Talking Points Memo
Give them time. Soon tubino-lewinski and oldcat-lewinski will start whining about “the children” or “the mean rich people” something equally stupid…
Even Dem’s don’t say that SS is fine indefinitely. Their solution however, is simply to tax their way out of the issue. But given the way that SS has been raided, why am I to believe that any new tax to fix SS will not be mugged ofr yet another clean needle program? or to subsidize somebody’s goldfish pond?
Here’s my solution for the Medicare Drug Plan.
Every person age 65+ gets a credit card in the name of their grandchildren. They charge all their meds on the card. When the grandkids grow up they have to pay the bill—plus interest.
Well—
That’s the same as the plan we have now, isn’t it?
Posted by Oink
02/04/2005 at 01:36 PM
>>That’s the same as the plan we have now, isn’t it?
not quite. in your (brilliant) scenario, evil corporations get the interest revenue. in the current model, ted kennedy’s fat bloated ass gets the revenue.
ted will never support something that decreases the size of his ass.
Stop! Stop! Stop! This is not that complicated! My money = My retirement...PERIOD!!!!
The economy is fake, and so is the math behind it. Timetables, actuaries...Piffle! When the numbers don’t add up, they print more money!
This is all mental masturbation. I started my IRA because I never counted on the money I put into the system to be there when it came time for me to draw on it (I’m 40 now), and I didn’t need a bean counter to tell me that.
Oldcatman, your last 2 statements got it right:
Government run programs often times are not
as efficient as what (ed.) the private sector can do.Perhaps then, IRA’s, 401K’s and “new” private programs is the real answer.
End of story.
I just did an analysis of what someone would have now if he had invested the money stolen and given to our grandparents. Joe Average as a 20 year old in 1960 making payments based on the soc sec contribution and invested at an fund indexed to the DJIA (approximately 6% per annum) would currently have $600,000 in a bank account. Interest alone would supply $3,000 a month. Soc sec pays $1,400. And there is nothing to leave the children. As opposed to $600,000. Fuck FDR where he breathes. Oh, shit, I forgot. The fucker doesn’t breathe anymore, does he. If I could go back in time and remove any American president, it would be him. Imagine where we would be today if we had never had a communist president.
Posted by commander0
02/04/2005 at 08:22 PM
The RNC talking points are remarkable for all they leave OUT. They are wanting to ignore the tremendous surplus in T bonds.
I am beginning to believe the plan is to NOT honor the bonds. Sounds crazy, but wow WHAT A HEIST. What an incredible transfer of wealth from working folks!!!
Was going to refute the deliberately deceptive claims point by point, but… not tonight. Plenty of places to find out how we’re being lied to, though.
Start learning about the lies here
Posted by tubino
02/04/2005 at 10:32 PM
25. Establishing personal retirement accounts does not add to the total costs that Social Security faces.
Nice tricky wording. Does not add to the total COSTS, but dramatically reduces the revenue. Heh. These guys are GOOD.
Posted by tubino
02/04/2005 at 10:38 PM
Illegitimi and Oldcat speak-um truth. But don’t expect this thread to go far unless tub-lewinski chimes in with his glorious praise for China and France and their fabulous socialist economies (and his kool-aid articles from the Wash Post).
well, here we go.
hey tub-lewinski. i briefly went to your two links. they are as stinking of your socialist, biased, liberal ideas as streisand’s site.
you accuse me of not countering your points, that’s because you have no points. you send us to your liberal crap sites and expect us to take your banal whining seriously? you are pathetic. your “unbiased sites of truth” feature:
http://yglesias.typepad.com/matthew/2005/02/understanding_t.html
Has a pro UN Oil for Food link on it. I read no further because I know what it says.
-and--
http://atrios.blogspot.com/2005_01_30_atrios_archive.html#110748425335379716
Also has the same Pro UN Oil-for-Food ad. It also asks for donations to the DNC.
in addition, you continually avoid my challenge to present to me an article from a viable source that supports your claims.
i, on the other hand, provided you with a link to an interview with Clintons old SS chief (Apfel) who supports a Bush SS fix.
go back to moveon.org or du.
Tuffy,
You want me to post a link to an article that claims that 2-1 does not equal 4.
You want me to prove that if SS revenues will be insufficient in 2050, then reducing them will not make it better.
Are you, perhaps, retarded?
Okay, try this one:
Bush’s plan promises you will get less, in return for higher taxesIn addition to borrowing many trillions of dollars, the Bush plan promises you less than if you rec’d the standard SS bennies. See chart linked above.
This whole discussion is eerily like the ones I had about WMD and Saddam’s connection to 9-11 just prior to the Iraq invasion. I was arguing with the 78% who were stupid enough to believe the WH lies. Their side “won” in that Iraq was invaded. I was right about the facts, and predicted the occupation troubles.
I think the SS reform will happen, and in a few years, say 2015, there will be another “crisis” when it becomes clear that the radical expensive Bush “reform” did nothing to actually, you know, solve the problem. You can see it all now. Nothing in the Bush plan actually addresses the shortfall, but accelerates it. Boat gonna leak in a few decades? Better drill holes in it NOW!
Posted by tubino
02/04/2005 at 11:23 PM
Does the employer match the percent that is put into the private account?
I’m serious. I want to know.
Posted by tubino
02/05/2005 at 12:08 AM
Tubino, the employer does not pay in a matching percent under the proposed plan. However, bear in mind the following rate of return on the participant’s investment:
Participants have the choice to invest in any or all of five broad-based investment funds:
- A stable value fund invested in U.S. Treasury securities
- An index fund comprising investment grade bonds
- Small and mid-cap stock index fund
- Large cap stock index fund
- International stock index fund
These funds have the following 10-year compound annual rates of return:
- G Fund (government securities fund) 6.04% (3.67% real)
- F Fund (bond index fund) 6.95% (4.58% real)
- C Fund (common stock index fund) 10.99% (8.62% real)
- S Fund (small capitalization stock index fund) 9.70% (7.33% real)
- I Fund (international stock index fund) 4.32% (1.95% real)
What is the rate of return on Social Security? Zip. Nada. Nothing.
Sure, your employer pays 6% of the 12% total “invested” in Social Security but none of that actually belongs to you. It is an INSURANCE FUND to spread the risks associated with retirement. It is no more an actual INVESTMENT than I am a llama.
That’s why it is called FICA (Federal Insurance Contributions Act) and the deduction is called FICA Tax, i.e., you have no choice - the government is going to take that money out of your paycheck before you ever see it, whether you like it or not.
Allan,
You say, “What is the rate of return on Social Security? Zip. Nada. Nothing”.Not really true. See below.
Later you point out, correctly, that it is INSURANCE, not a wealth-building investment.
However, using the WH data, note that predicted payouts are LESS LESS LESS than the current promised SS benefits. The only way the WH is able to make them look better is by using their own predicted benefit CUTS.
Such an outcome is not really surprising, as SS benefits have so long been indexed to wages, not inflation.
But SS is not intended to be a pension plan. It’s an insurance plan so that when your relatives and neighbors and maybe you have a catastrophic injury and can’t work, or spend all your/their savings on health care for a loved one, or your/their pension plan is stolen by a corporation… in these and so many other occurrences, neither you nor they is impoverished.
It’s a SOCIAL thing. It’s what distinguishes developed countries from third world countries. It’s what keeps you from having to deal with more homeless people etc.
My ex-wife used to work a crisis line in a big city. You’d be amazed how many good people wind up losing house and pension through medical disasters, crime, etc. You can contrast your projected SS benefits with optimized investment, which is silly, or you can realize it’s a method of distributing RISK, to the benefit of all.
Contrary to what many here believe, the efficiency of SS in delivering to tens of millions is one of its best features. More than 99% goes to benefits. It’s simple to understand. You can’t outlive it.
I’d like to opt out of many many particular taxes, but of course it doesn’t work that way.
Interesting that still not one of you has indicated how the math adds up. That’s because you can’t.
Allan, how to link to previous thread on this topic?
Posted by tubino
02/05/2005 at 01:09 AM
CEA Predicts Stock Market Crash?!?
From Brad DeLong.
Posted by tubino
02/05/2005 at 01:30 AM
Tuffy gets all tuff with this cut: “ i briefly went to your two links. they are as stinking of your socialist, biased, liberal ideas as streisand’s site.”
Shorter Tuffy: “I can’t tackle the ideas there, so I’ll resort to childish name-calling. Sheesh, there’s big words there!”
Tuffy, come back when you can show me the math. Or if you just need another bitch-slap of reality. Insisting on fiscal sanity is not the sole domain of socialists, ya goofball.
Posted by tubino
02/05/2005 at 01:34 AM
Tubino, you only echo my main points. It has been and will always be insurance. No one is advocating replacing Social Security. SS is basically a Term Life Insurance Policy. You wouldn’t want to go through daily life without insurance for your auto, home or life would you? Neither would I. However, I would like to balance the “insurance” with my need for a retirement nest egg. After all, the proposal is voluntary.
The point that President Bush, myself and most of the readers here are trying to make is that a majority of Americans have come to depend on SS as some kind of retirement plan, which it was never intended to be. As our society has changed over the years, so must our “social” programs change to accomodate those societal shifts.
The scary figures you refer to in the Eschaton post also contains the disclaimer “are calculated using CBO assumptions and methodology, assuming the change to price indexing goes into effect in 2011”. That’s way too many “assumes” to satisfy me. As a Systems Analyst and a Math and Computer Science professor, I prefer to make my decisions based on hard numbers and facts, especially when it concerns something as important as this. When I view sites like Eschaton, I see way too much vitriol and emotion to convince me the author is being totally honest.
I have catalogued all the previous posts on this topic and provided links to all of them in a new post as well as a shortcut in the “Member Bulletins” section of the right sidebar of the site.
http://www.barking-moonbat.com/index.php/weblog/social_security_blog_war/
Allan, you make me smile with this one: “The scary figures you refer to in the Eschaton post also contains the disclaimer “are calculated using CBO assumptions and methodology, assuming the change to price indexing goes into effect in 2011”. That’s way too many “assumes” to satisfy me. As a Systems Analyst and a Math and Computer Science professor, I prefer to make my decisions based on hard numbers and facts, especially when it concerns something as important as this.”
Do I have to explain the joke? And do you understand the price indexing?
I would love to see your hard numbers and facts on the financing of this little scheme. So far, I have not seen any indication on this site that anyone here even understands the basics of the trust fund financing.
If you think you have hard numbers out to 2015, let alone 2050, please share. What I suspect is that you’re uncomfortable with the necessities of any type of economic projection—even though it’s central to the whole “crisis” scare. Not everyone has the personality for the dismal science! But ignoring projections and the underlying assumptions doesn’t get you any closer to hard numbers for the future.
Posted by tubino
02/05/2005 at 01:44 AM
"Tubino, the employer does not pay in a matching percent under the proposed plan.”
So the employer is an immediate beneficiary if employees opt for the private account?
WOW. That’s a big big motivation to push one direction.
Posted by tubino
02/05/2005 at 01:47 AM
Tubinio, yes I understand price indexing as do several commenters in the thread at Escheton. Several of them question the validity of the numbers as well.
There is no joke here, my friend. If you think there is, please keep it to yourself.
I am uncomfortable with all of the economic projections, as you should be also. However, the US economy is just too dynamic a model to rely on any of the figures I see tossed out there. From either side of this issue. I have several spreadsheets I am working on to try and resolve this issue, at least in my own mind. I am trying to factor in as many variables as I can. I’m sure there are many more mathemeticians with lots more free time working on this too. I would welcome any input from them.
I am not ignoring any projections or their underlying assumptions. I do, however, choose to factor in bias on the part of some of these sources.
Finally, are you now going to start a mantra about “big business backers of Republicans promoting evil plan to pay less in FICA matching funds”? If so, please remove your tin-foil hat and take a break. That is an insult to my intelligence.
Allan asks, Finally, are you now going to start a mantra about “big business backers of Republicans promoting evil plan to pay less in FICA matching funds”?
No, but it’s obvious that by building the system that way, the admin creates a tremendous incentive for businesses to back the plan, and encourage emnployees to dive in.
Unless you imagine that the profit motive is mysteriously missing in the equation of employee expenses. Nothing tinfoil about observing that the sweetener for corporations is ENORMOUS. I’d like to see that on a spreadsheet.
Interesting too that the mainstream (corporate-owned) media is out in front of many if not most Republican politicians in echoing the repub talking points.
Really, I have two big problems with the plan so far:
The numbers don’t add up. We add enormously to the record deficit for decades, do nothing to alleviate the funding gap, and reduce benefits. All for an ideological switch that may require more bailout later. The impact on the fed debt looks horrible, and stifling economically. The ownership society here means you OWN MORE DEBT.The other problem is that quaint archaic notion of a social contract.
Just as we saw in the buildup to the Iraq invasion, you can see the deception must be there because the arguments advanced make no sense.
Posted by tubino
02/05/2005 at 08:17 AM
>>Tuffy, come back when you can show me the math.
I am not the one trying to debunk a plan that isn’t up for a vote yet. You are. And your “proof” consists of websites that praise the oil-for-food program and ask for donations to the dnc. And you wonder why I have a hard time believeing this crap? There is no point chasing red herrings from your pals at bush-sucks.blogspot.com.
Even the former Clinton SS chief says private accounts are a good idea. I firmly believe that fiscal conservatives will trash a SS plan that is the scheme you make it out to be. So far they have not.
Tuffy, put on your thinking cap and consider:
Many if not most republican politicians are jumping ship because the plan is fiscally irresponsible. I can provide links if your fingers don’t work, but Josh Marshall has lots of details at wwww.talkingpointsmemo.com.
My “proof” that the math doesn’t add up is so simple that even you can understand it if you try. If you reduce revenue to the program, you don’t save it. Got it?
If you borrow $4.5 trillion additional dollars, you do not strengthen the fiscal health of the country.
I can’t make it any simpler for you.
Washington Monthly Link on Soc Sec
You have some good insights from that site. When you grow up, you’ll find that in dealing with adults, you are better off dealing with the arguments rather than the childish labeling and namecalling.
Come back when you finish junior high.
Posted by tubino
02/05/2005 at 01:07 PM
As many of you know, I just recently moved to New Zealand, a beautiful land with wonderful people, but also a “welfare/entitlement society.” Here is what we have down here to support all the programs they have:
Income tax, very high compared to the US, in all wage categories.
Taxes on any money you have in the bank, savings, retirement, or otherwise.
A 12.5% GST (Gov’t Sales Tax) on all goods and services.
A “luxury tax” on all things the gov’t deems unnecessary for surviving, such as cigarettes, alcohol, perfume, etc. A pack of Marlboros costs $10, the average 6 pack of beer is $10, a 750 ml bottle of Johnny Walker Black is over $60…
An import tarrif (among the highest in the world) on all imported goods.
All that, and guess what? They still have a hard time meeting the demands of the entitlements they offer.
The majority of people have private retirement accounts, (called Superannuation) and medical insurance, knowing full well that their retirement payout from the government will not sustain them in a comfortable lifestyle in their senior years. Just food for thought…
Oldcatman: I agree. I am enjoying reading Allan and Tubino hash this out. Very enlightening, indeed.
We are moving into our new house today and will not have internet for a few days; I look forward to reading the rest of this debate when we get back on-line. Play nice in the meantime.
more sites from liberal hacks. james carville gave called your last link a “must read”. yep - no agenda there.
when you are thru servicing bill c, tell him i said hi and wished him well with the un.
Tuffy,
I don’t care about partisan hacks from either side.Here’s a link to the thread where you can read my views, if you’re interested:
Barking Moonbat thread on SSYou can see why I say the numbers don’t add up.
You can read how your colleagues on this list couldn’t actually argue against any of the numbers, and so pulled out the silly namecalling instead. Apparently fiscal sanity and reality-based logic are the sole domain of liberal socialist types who get laid.
And apparently guys like Tuffy and Z Woof need to get laid more often, cuz they sure are obsessed with other people having sex. But I’ll tell you what, you can both blow me when you’re in town.
Posted by tubino
02/05/2005 at 09:09 PM
Sorry, my fault for the omission.
I forgot to say, you have to floss first.
Posted by tubino
02/05/2005 at 09:14 PM
Okay, if you’re ready for the topic again, Josh Marshall has a good review of Soc Sec and what Bush is saying about his plan.
In it you’ll find why what Clinton proposed in 1999 is NOT what Bush is proposing now, and many other rebuttals of the silly RNC talking points that some of you can’t live without.
Really, Josh provides a nice clarification of the issues, with actual links to Bush’s statements.
Posted by tubino
02/05/2005 at 10:59 PM
If there’s anyone here who is interested in the actual honest-to-gosh debate about things like wage-indexing vs. other means, and why these terms matter if you’re going to discuss Bush’s plan to CUT benefits, it’s worth following the discussion between FactCheck and MoveOn.
The trick is that the Bush admin keeps using certain terms two (or more) different ways, to dishonestly present arguments. The one that has been mentioned many times is that they use PESSIMISTIC econ projections to declare a crisis, then use OPTIMISTIC projections for their own alternatives.
But it gets much thicker. Here’s the MoveOn response to FactCheck. Hint to Tuffy and Z Woof: it’s no good to say that MoveOn has a position in the debate-- OF COURSE THEY DO. But read their responses to the FactCheck criticism, and you’ll see that the terms of the debate matter in any honest discussion. Understanding the inconsistent use of terms is central to spotting BS or lazy journalism, both of which are prevalent in Soc Sec discussions.
Posted by tubino
02/06/2005 at 10:05 AM
interesting
Posted by Oink
02/06/2005 at 10:08 AM
Dick Cheney seems to agree with me about the fiscal demands of the Bush plan.
Josh Marshall clarifies it HERE.
I wrote a rather nice post, I thought, and just lost it to the ether. Short version: there is nothing conservative about the gang in charge.
Question no one has answered: why no Republican charge to invest SS surplus for next few years???
Posted by tubino
02/07/2005 at 12:31 AM
More details of the plan are coming out, and ... I really want to know if you supporters are supporting the ACTUAL PLAN, or just some idealized version that only exists in your mind.
Center on Budget and Policy Priority analysis 2
Eschaton presents the short version.
Now you tell me what part of this royally expensive FUBAR you support, or think is mis-represented. Show your work.
Believe me, I know that being right is not enough. We’re stuck with this disaster if the media don’t start getting this story right, and OUT THERE.
Posted by tubino
02/07/2005 at 12:36 PM
Bush’s plan, in his own words:
Because the—all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There’s a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those—changing those with personal accounts, the idea is to get what has been promised more likely to be—or closer delivered to what has been promised.
Does that make any sense to you? It’s kind of muddled. Look, there’s a series of things that cause the—like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate—the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those—if that growth is affected, it will help on the red.
Okay, better? I’ll keep working on it.
White House Source for Bush Quote
Does anyone find that REASSURING???
Anyway, enough on that. Remember Tuffy quoting the Cato Institute? Read here about their Leninist Strategy to dismantle SS. From 1983. They have a plan, oh yes they do, and it means lying and deceiving.
Posted by tubino
02/07/2005 at 04:24 PM
Some time ago I challenged you all to ponder how the guvmint is going to line up enough saps to loan it the money for a lower interest rate than the rate of return on the market.
I also challenged you all to tell me why the repubs don’t invest the current surplus.
Not one attempt to answer, but Michael Kinsley sorts it out for you.
Or are you all convinced of the bogus-ness of the plan now?
Posted by tubino
02/07/2005 at 09:22 PM
You may have noticed no one really cares anymore.
Bottom line: we want privatization. Fuck the cost. 2 trillion or 4 trillion today is nothing compared to 25 trillion in a few years.
Oh, and don’t bother with a long response as I really do not think anyone will reply. I know I will not.
We are tired of this ponzi scheme. End of story.
Thank you for playing.
I can’t imagine a more pathetic response, especially from someone who claims he wants “the hard numbers.” So now the numbers are too hard from you, and you revert to making them up.
So now you support the massive transfer of wealth, cheating those who paid in honestly, sticking the country with massive debt, in order to fund accounts that even in theory will pay out less than the guaranteed benefits.
You don’t just want to gulp at the public trough, you want to pour it out, and then poison the capacity to borrow or run deficits when the country needs it.
That’s worse than being a welfare cheat. You don’t just want to cheat a program, you want to cheat the future of the country.
You say fuck the cost? Why not say, fuck the country, and its capacity to wage war in the future? Why not say, fuck the future, fuck the next generation, fuck our national economic options if another terrorist attack tanks the market, fuck it all as long as I GET MINE. Fuck the social contract, fuck the kids whose parents die from car crashes or diseases, fuck the widows whose pensions were swiped by corporations. Fuck the math that shows the whole thing is an indefensible sham, a scheme that won’t solve any funding problem anyway and will accelerate it. Fuck rationality and discourse and anyone I disagree with. Why not say all that.
But don’t think for one second this is CONSERVATISM, you lazy debt-hiking fraud.
Your new Ponzi scheme is to get investors to buy bonds to finance your private accounts. By comparison the current SS scheme is a model of responsible management.
But hey thanks for a little honesty here at the end. You never stood behind all those other words, did you.
Posted by tubino
02/07/2005 at 10:25 PM
Great story to illustrate SS, from Eschaton. “Bobo” = David Brooks, NYT columnist who likes the idea of single-earner families with mom raising the kids at home.
____________________________
Consider Bobo’s ideal couple, Roger and Mary Natal. Roger and Mary get married the day after high school graduation, on Roger’s 18th birthday. Roger was born in 1974. Roger, due to his supreme intelligence and skills, skips college and begins working the day after their marriage at a generous $50,000 annual salary. He’s on a good career track, and his salary increases by $2,000 every year. Mary does what Bobo says she should do, and starts cranking out babies, remaining a nonworking stay at home mother. She has 6 children over 10 years or so.Sadly, on his 30th birthday, Roger dies in a tragic golfing accident. Most of their money went into their house and their SUVs, and Roger never bought any life insurance, but he did manage to save $1200 per year, putting it into a mutual fund which earned a fairly healthy 5% real annual rate of return. This money is still there for Mary and the brood, providing them with about $20,000 to live on until she gets off her slacker ass and finds a job.
Mary’s rather distraught. She saw her husband’s pay stubs every monthy, and saw how much money he paid into Social Security. But, she’s heard all these news reports telling her how that money is just gone, that those benefits can’t be passed onto Roger’s heirs. Even the president has said such things, and we all know what a straight talker he is. In a moment of panic, due to her recent tragedy and sudden poverty, she calls the fine folks at the SSA. After being placed on hold for awhile, during which she was informed that Social Security would go bankrupt soon, she began hysterically sobbing to the person on the line, begging to have her husband’s Social Security contributions back. He’s paid about 45 grand into the system, and now it’s all gone! It’s not fair!!!!
After calming her down, the nice person at the SSA politely informs her that contrary to all of the bullshit she’s been hearing, she is in fact entitled to receive Social Security benefits based on her husband’s earnings and contributions. In fact, as long as she has dependent school-age children she’s entitled to receive $1470 per month, adjusted for inflation. As her most recent child was born 2 years ago, that benefit should remain with her for 16 years.
And, not only that, each of her children is also entitled to receive benefits. Until age 18 or 19, depending on when they leave high school, each child also receives $1470 per month, up to a total family benefit of $3431.30. Sure, it’s not quite as wonderful as the $20K or so in her husband’s mutual fund account because, you know, they “owned” that and it made them feel good. But, still, $3400 per month lets her continue home schooling her kids.
And, Mary, being quite frugal, manages to save enough money that once her children are all grown, she only has to take a modest part time job. The job doesn’t pay too much, and she never works enough to qualify for full social security retirement benefits. But, nonetheless, upon reaching retirement she discovers that she is, in fact, entitled to receive her husband’s full retirement benefit of $1960 per month.
__________________________
SourceYeah, still posting cuz Soc Sec matters. You want to put you rmoney into a private account? Go right ahead. But don’t impose an INVOLUNTARY DEBT on us all merely to break a popular system that can be extended indefinitely simply by not renewing one-third of Bush’s tax breaks for the wealthy.
Posted by tubino
02/08/2005 at 11:12 AM
Wall Street Journal explains how Bush’s plan makes SS funding gap WORSE:
The year’s budget writing will be complicated by the parallel debate over Social Security. While Mr. Bush last week acknowledged that private accounts, by themselves, wouldn’t help Social Security’s long-term financial outlook, now the Social Security Administration’s chief actuary has informed the White House that its plan would hasten to 2012 from 2018 the date when Social Security will begin taking in less in payroll-tax revenues than it is paying out in benefits.
The actuary, Stephen Goss , wrote White House adviser Charles Blahous that the costs to Social Security of workers diverting some payroll taxes to their personal accounts will exceed the amounts by which the government would reduce payments from the accounts to retired workers or their survivors to offset the initial payroll-tax diversion. “Annual cash-flow deficits (negative annual balances) appear in 2012, or six years earlier than under current law,” Mr. Goss wrote.
Math-challenged Vilmar sez, “Fuck the cost. 2 trillion or 4 trillion today is nothing compared to 25 trillion in a few years.”
Right, but pay your trillions now, and you’ll still need to pay more later. ONly difference is that with the Bush plan, later comes sooner.
I feel the love already.
Posted by tubino
02/09/2005 at 01:10 PM
As if anyone cared:
A Privatized Account that Earns the CBO-Projected Rate of Return Would Have its Entire Value Eliminated By the Privatization Tax. According to the Congressional Budget Office, the privatized accounts are, in fact, expected to produce a risk-adjusted rate of return of 3% above the inflation rate. Therefore, the automatic reduction of Social Security benefits would equal the entire value of the privatized accounts. In effect, the automatic benefit reduction would constitute a 100 percent tax on the retirement savings in those accounts.
100% tax? Sounds good to me!
Posted by tubino
02/10/2005 at 02:35 PM
Okay. You asked for a thermonuclear strike so I am going to supply the Posiden missile version of how we can fix Social Security and render the debate moot…
Congress has tried to use political rhetoric to fix something governed by the laws of mathematics for over 25 years, but have yet to admit that political rhetoric cannot change these outcomes.
Let’s review for a moment and see what can be done.
Currently the Social Security Trust Fund enjoys an investment income of approximately $80 billion per annum. That’s all you have to work with. The claim that Social Security will be okay until 2042 is ONLY vaild IF you BELIEVE that SOMEHOW the federal government will be able to magically repay the $11 trillion it has “borrowed” from the fund - an amount equal to a tad bit more than the current annual GDP of our entire country.
Tax increases may create a recession and cannot fix it - or one of the countless number of them already enacted would have done so, now wouldn’t they? Tax increases are only a way to “kick the can down the road”, but the laws of mathematics continue to work against us, making the solvency issue only become larger. Remember the great compromise of 1984 on this? Well? Here we are again, but the problem isn’t fixed and has now become the proverbial 800 pound gorilla.Benefit cuts only serve to hose those of us who have been forced to “contribute” to this tragically flawed wealth redistribution program over the courses of our lifetime so we know intrinsically this will not fix it either.
Investing in the current capital market exchange platforms is not politically acceptable as long as there are people who believe that Americans are too stupid to pick good stocks because the stock market is subject to risks and conditions beyond the control of the participants to efficiently manage to their benefit.
That means we have to look somewhere else - enter INSTICERT. (do a Google search on this).
INSTICERT is a new electronic market platform that will be set up to provide investors and taxpayers with the opportunity of channeling their investment dollars into companies organized as bankruptcy-proof and tort-proof opportunities that are highly efficient in terms of their use of capital and production of earnings. INSTICERT will not trade stocks or bonds or futures.
INSTICERT will only trade a new class of securities that pertain to these bankruptcy-proof/tort-proof business combinations.
The most common construction is the “Royalty Limited Partnership” (or “RLP” - again, do a Google search for more information). Because RLP’s are so efficient, these companies enjoy the highest amount of financial investment leverage possible (practical or theoretical - works out the same) so they create an ongoing investment income stream in the range of 12% to more than 20% per annum (IRR).
Under the current proposal, INSTICERT would be administered by the federal government because the federal government needs the income and the federal government’s money (remember the $80 billion SSTF investment income) would be reinvested into any company organized as a RLP, provided the government did not provide more than one-third of the total capitalization of the company so organized.
The results of this approach would be:
1. The current $11 trillion SSTF shortfall debt (that money the government “borrowed” from the SSTF) would be defeased within 10 years.
2. Within 15 years Social Security would be placed on a self-sufficient basis that no longer required taxpayer contributions to sustain (what will Americans do with all that money?).
3. No tax increases would be needed to resolve the insolvency crisis.
4. No benefit cuts would be required to resolve the insolvency crisis.
Stand by pilgrims, this nuke will fry every liberal left after this idea strikes Ground Zero (finally)…
Posted by ClintLovell
03/16/2005 at 08:13 PM
02/04/2005 at 07:54 PM
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