What Needs To Happen To Social Security
Want to do my Portfolio Management homework for me? Great, I’ll send it to you.
Posted by DeoDuce
01/18/2005 at 08:41 AM
Alexander Fraser Tytler (1747–1813)
QUOTATION: A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.
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From Oink: The physics of a sinking ship are complicated, too. But the stark fact remains in its simplicity—the son-of-a-bitch is sinking.
Again, the government does not have to face the same objective, real-world measures that a private business does. Nor should they, say for example when defending the country in time of war. But Soc. Sec. has become a Ponzi scheme.
One libertarian approach: do nothing. Allow the whole mess to collapse, start over. Dangerous.Posted by Oink
01/18/2005 at 09:25 AM
That was good Vilmar. Better than any newspaper I read could ever do. Dr. Jose Pinera’s letter to Bubba I was reading earler today wondering how to link it or you post it, and you put it up, sweet.
Math is so hard to spin and you went way deep in math which of course is just impossible for a woman to understand. And women think they come first—right? SO—Here is what I do;
I start by saying, “Hey this is a Black womans issue.” (And everybody knows that you can’t discriminate against Black women, right?) THE PROBLEM; Star Parker says, “Average lifespan for a Black male is 64.8 years. Social Security (SS) now starts at 67 for young people. SO - Many Black males work their entire lifes carrying the extra burden of payroll taxation much like just another rock in my pack attitude and then die before they collect ONE PENNY in Social Security checks.
SO - if the Black woman worked and she is getting her own Social Security check, her poor dead husband check vanashes and his children, who are adult now and about the age of 38 or something, get sqwat but who cares right?
Then say, “Star Parker says, “When a Black Male dies all Personal Savings Account (PSA) balances should go to his family exactly like a Tax-Free Health Savings Account (HSA) does today, period.” If anybody ever says who is Star Parker? Just say a beautiful Black Woman who pulls no punches from LA but she also has offices in Detroit. Her website is urbancure.org.
When a Black man dies and his wife doesn’t get his PSA balances this has been elevated to a Black Women’s issue in a woman’s mind, right? Isn’t it always suppose to be about women in a woman’s mind? They are so simple and easy to see through. Then I say, “Don’t you think a Black woman should get her husband’s PSA balance at 65 years of age instead of nothing from Social Security? (Those women always say yes to that question especially young Black women) Then men can say;
Women need all the money they can get so they can go on a cruise to get over the death of their poor departed husband and then believe those guys that are saying ‘wow you are beatiful’ instead of what the really mean - you have a lot of money, right?
Let’s face it, the PSA is more family friendly than the current ponzi scheme called Social Security.
During the first election of the President he stopped into Omaha, NE, and meet with the then Senator Bob Kerry (D-NE former) and the Omaha World Herald reported that the two met over Social Security. And futher they assert Kerry saying, “It looks like Bush is targeting wealth to the poor. And Personal Savings Accounts (PSA) will correct a fundimental problem now that Social Security discriminates against certain minority population groups.”
And Black women live six years shorter than white women on average.
And women like polls too; SO say more young people believe in UFO’s than believe Social Security will be there for them when they retire.
I’m with you Vilmar just show me the numbers and then its really easy to understand. Your explaination is a simple IQ test. You know some suggest that larger rather than smaller amounts into PSAs in Social Security REFORM will produce a smaller transition cost for the country.
OK I think I know how to link now so let me give it a try. If you dare---push this---
Posted by Z Woof
01/18/2005 at 10:09 AM
Vilmar, among the other gems, made another good point: screw it! I’ll be dead before the goddam thing goes down with all hands aboard.
If you were in Congress, and maybe wanted to get reelected, which would you choose?
1. Tell the truth & save a lot of people yet unborn from a huge mess (people yet unborn don’t vote) AND get accused of being heartless & piss a lot of stupid voters off.
2. Enjoy your perqs & let the dumb bastards get what they deserve.
I have a vague memory of a congressman saying something like, “You think we’re stupid? Well, from where we’re sitting the electorate doesn’t look so good either.”Posted by Oink
01/18/2005 at 11:09 AM
We’re basically hosed on this.
I’ll get Social Security, but it’ll be offset by my military retirement, my teachers’ retirement, and my Federal Civil Service retirement. Nevermind that I paid bunches of money into Social Security for over 40 years, I doubt that I’ll get a small fraction of that sum back in payments.
The Social Security account is a joke, but no one’s laughing.
Posted by MAJ Mike
01/18/2005 at 11:20 AM
Great job, Vilmar! The only “adjustment” I have to make to OINK’s good remarks is: the SS program has not “become” a Ponzi scheme—it’s been one SINCE INCEPTION.... it’s just catching-up to those left holding the proverbial bag in such scams.
In a successful capitalist system, with increases in productivity, the ratio of workers to recipients can decrease, yet still work for a program like SS. The ratio NOW, for example, is lower than it has ever been—AND SOC SEC REVENUE SURPLUSES ARE STILL PEAKING! The high point is still years away.
None of the math supports the crisis claim, but what’s worse, no one on Bush’s hand-picked panel could propose a solution that was BETTER than the existing situation!
The trick: You have to use very pessimistic projections to claim a crisis, then use very optimistic projections to even get the so-called “reform” proposals to keep from bankrupting the US over the next 40 years, before any projected benefits kick in.
Soc Sec pays benefits if you live to 80, 90, 110. It’s an insurance program, not a pension plan. Anyone can choose to invest in alternative taxfree pension plans too.
The Brits under Thatcher did what Bush proposes now, and they are reeling with a real crisis. They concluded the US system is much more efficient.
Want real numbers and analysis? Try this: A Question of Numbers, by Roger Lowenstein
Posted by tubino
01/18/2005 at 01:32 PM
Tubino,
Of course they are peaking! But the baby boom generation has just started to retire. Our birth rate has gone down, too. Try dealing with facts and logic. Try understanding the statistical evidence of what is going on around you rather than engage in such immature emotional outcries.
You live in a fantasy world, my friend.
Raise productivity all you want but when the numbers of people draining money out of a system becomes almost as great as the number contibuting into it (plus you have caps on income which limits intake but if removed would also increase outflow) you have total failure.
Try this on for size as a bit of an exercise.
Look at it this way: if I am collecting social security and 2 people are contributing with my SS check equal to (average assumed)$1200 per month and their contributions limited to 13% (average assumed salary per person in US) (40,000/12=3333 per month; 3333*13%=433) just HOW THE FUCK do those numbers add up? Note there is a $334 shortfall. How do you make it up? What planet do you live on?
These are based on today’s dollar figures with averages being today’s averages for the US.
What apologists for a corrupt system like you want is feel good nonsense (after all you quoted a NY Times article---a premier publication well renowned for it’s ability to distort truth and make up news.)
Try dealing with reality. We’d appreciate it.
OBTW, I suppose you were screaming at the top of your lungs when Clinton said SS was a crisis, huh? Happen to have any proof to show you actually complained about it back then? It’ll at least show me you were not a hypocrite.
Hey tubino pound gravel up your butt you puke. You say no body can propose a solution BETTER than the existing situation!
Anything would be better than the current ponzi scheme that is the current Social Security. Like Vilmar says it will have to be fixed.
And tubino you could never pass a racist program like Social Security is to Black families, and Hispanics families for that matter, today, it just wouldn’t pass.
Social Security goes up by the CPI tubino. This is not complicated to project future Social Security payments. Also we just had a rise in a Medicare premium going up 17% this year. If we do nothing Medicare premiums will eat up the ENTIRE Social Security check at some point in time in the future.
Hey tibino you say let’s keep Social Security and “anyone can invest in alternative taxfree pension plans too.” Well IRAs and 401Ks are old taxed accounts. So name which taxfree accounts you are talking about for pensions when you say taxfree.
Tubino says do you want real numbers then go to the NY TIMES, ha ha.
I think tubino is really Howard Dean and is a Socialist Scumbag (SS).
Posted by Z Woof
01/18/2005 at 02:39 PM
Vilmar, your analysis was very conservative (but that’s not bad). Over the long haul, younger investors can emphasize equities and get a return of 12% from the market. As you get older you move more of your investments into good bond funds (with smaller investments in equities for diversification) and still get 9%. In retirement, you could reasonably anticipate earning 6%. The result: all of the $$ are bigger in retirement. If anything, your analysis understates the support for social security privatization.
Posted by Annoying_Mike
01/18/2005 at 02:45 PM
Mike, I took your percentages and that 20 year old would have a check worth $11,783 EVERY MONTH (w/o touching principal) and the 24 year old college educated would have a monthly check of $24000(w/o touching principal)
HOLY COMPOUND INTEREST, BATMAN!
Vilmar,
You are dodging reality by using silly exercises. All I am using are honest economic projections. Fun exercise: use your cheap trick on the numbers from 20 years ago to look at the current situation, and you’ll be predicting a shortfall RIGHT NOW, instead of the actual revenue surplus.How accurate have SS projections been, about productivity, impending shortfall? If you look through past reports, you find that the year when payouts exceed revenues keep being pushed back. SS trustees make 3 projections: pessimistic, medium, optimistic. Medium is what gets the press, but year after year, decade after decade, the optimistic one for revenue is the most accurate. I’m talking reality-based assessment, now. Again, you have access to all this info, but use none of it.
When Clinton proposed to put the revenue surpus (still increasing yearly!!!) into an invested fund (normal investments in money markets etc.), I thought it was a good idea. Alan Greenspan and the repubs did not. Had this happened, then the feds would not so easily hide true size of deficit, and we would not have to finance (or rather RE-finance) the treasury bonds owed to Soc Security… Incidentally, it’s instructive to compare Bush’s recent statements about Social Security “not being there” for today’s workers when they retire, to his statement to the National Newspaper Association 40th Annual Government Affairs Conference, The Hyatt Regency Capitol Hill, Washington, D.C. March 21, 2001.
“Another priority is retirement systems of Americans. And so the budget I set up says the payroll taxes are only going to be spent on one thing, and that’s Social Security—that the Congress won’t be using the payroll taxes for other programs. So—lockbox I think is the terminology they like to use up here. (Laughter.) Rest assured, it’s set aside only for Social Security.”
Not only is there no lockbox, but no republican is calling for the future years of surplus to be used for anything but financing more deficit spending.
You can scream and call names, or you can use real numbers to make your case. Try reading the link I provided, and respond. Or provide some real analysis from anyone of your choice.
You’ve got more errors in your post than I could possibly enumerate, but believe me, all these points about birth rate, life expectancy, and tying benefits to wages etc. is all dealt with in detail by others. You act like you’re the first one to see it. But consider that assuming T-bonds are honored, there’s no deficit in SS till the middle of the century (actually MUCH longer if you use the Bush admin rosy projections for private accounts!), and then get back to me about that crisis, eh? So far you’re not even beginning to deal with the realities here, let alone with any of the proposed reforms.
Posted by tubino
01/18/2005 at 03:08 PM
Z Woof claims, “You say no body can propose a solution BETTER than the existing situation!”
No. Heck, lots of improvements could be made. What I said in short version was that by their own admission, the president’s panel could not make a realistic proposal that met the President’s MINIMUM goals.
Or you could compare the results in UK, Chile, Sweden, ... and get some ideas of what works and doesn’t.
Or you could read how in the UK case, fees ate up nearly all the gains, and by comparison the efficiency of the US system looked excellent.
If we had a real press, you could read this stuff anywhere.
I like my own investment accounts, but I don’t confuse an insurance program like SS with a pension plan.
Sure, SS is a kind of Ponzi scheme—but has been successfully self-funded for many decades, and with the surplus in T-bonds, is self-funding till the middle of the century.
It’s reality. You might dislike the ideology, but that doesn’t change the facts.
Posted by tubino
01/18/2005 at 03:19 PM
Incidentally, from what I can tell, the Bush admin approach will be to essentially steal the funds paid in, and create a massive windfall for the major investment firms. Millions who have paid in will be converted from a guaranteed benefit to an opportunity to gamble, and the only guaranteed benefactors will be the investment firms—just as in the UK.
To see who would benefit, check the list of major contributors to Bush’s inauguration.
The only real mystery is why you would want to see the gov’t design a program that will push crony capitalism to a level heretofore unimagined.
Posted by tubino
01/18/2005 at 03:43 PM
As for Republicans fighting Clinton’s proposals, do a Google search on “Clinton social security crisis” then read the links associated to see why the Republicans fought it. Clinton wanted to benefit just a few Americans. We want EVERYONE to be able to participate. The operant word is “be able to.” The current system is oppressive and takes what is mine to distribute to others.
The president wants to give people the option to bail out. And since you love the security blanket the current program gives you, KEEP IT! Just don’t force me to participate in your assault on American wallets to prop up a failing system.
You can try all you want to convince me about how the system is still flush with money but I see the handwriting on the wall and the one thing that has not changed in all these discussions over the years is the fact that over the next couple of decades, the worker to recipient ratio will decrease. High proections, low projections, medium projections will mean nothing. As it that ratio goes down, so will your wonderful surplus until the point where my example in my first reply to you kicks in and the system goes broke or you pay more or get less or get none or all the above within a few years of one another.
Sorry, Tubino, your type is the kind that refuses to see into the future and the perils that reside there. You tend to want to live for the moment. I do not function that way. No matter how you slice it, at today’s rates if we had the worker/recipient ratio of 2 to 1 the system would collapse. What’s to prevent it from starting to collapse 30 years from now when it actually happens. That far in the future the contributions may be higher but never forget that payouts will be even higher. So nothing changes. The system will be BROKE!
If you want to stay in it, fine. You can. The President says so, too.
For people like me, I want to be able to get out!!! NOW!!!! And you should not force me to stay in and support you in a failing effort.
Go ahead, run your own spreadsheet with the numbers as I stated. Then do it with Annoying Mike’s numbers. Then tell me why I need to continue to subsidize this bullshit system. It is MY FUCKING MONEY!!! Not yours! Not the government’s!! If I want to keep it and invest it myself, then I should be able to do so.
Oh, one more thing, I don’t give a fuck who benefits.
If it is MY money I will decide who invests it for ME!!! Remember the concept of ownership. MY money. MY decision. MY responsibility.
If people are either too scared or too stupid to be responsible for themselves, then they can stay in the current system. I’ll be thinking about them when I am sipping my drink with the little umbrella in it on a beach somewhere while they are merely “looking” at pictures of a drink with the little umbrella in it on a beach somewhere wishing they were there.
Sure tubino act like you have two brain cells to rub together to get a spark when it’s so obvious that you don’t.
I said name a taxfree account that you talk about you say, “I like my investments accounts but I don’t confuse them with insurance.” Well turbino I am liciensed for insurance in many states how about you? Name a taxfree account turbino.
And asswipes like you tubino are always saying the fees are too much and the FEES will eat up all profits. Thats what was said about the Tax Free HSA before it was passed for everyone. But my company didn’t charge fees on our HSA and “still don’t” and all the Liberal asswipes like [[you tubino]] just set there with that stoopid dairy cow stare on your faces.
We are the biggest in HSAs in America and we didn’t give shit to the Bush administration so there. All JERKS say the President’s supporters are bad - burn in hell tubino. It was Blue Cross supporting John Kerrey and Jenjis John Kerrey just kept saying, “I got Blue Cross.”
tubino how can we have the Ownership Society of tax free PSAs and HSAs if you don’t want the PSA passed?
Posted by Z Woof
01/18/2005 at 04:24 PM
Wow, major denial from you guys. Not one of you can even face up to the fact that there are actuarial analyses etc. out there. All you have to do is increase the immigration rate a little, and Soc Sec will have revenue for existing benefits for a century. Using a simple-minded extrapolation is useless, because —as I pointed out—that same extrapolation would have you crying wolf in 1985 for 2005, when in reality there are record surpluses being posted for this and the next few years.
Not one of you can even wrap your brain around that simple fact, though the worker-benefiary ratio has declined since inception.
If you don’t understand how fees can eat up gains, read the report by the Brits on their own system.
Still, not one of you has presented a single citation of an analysis you even partially agree with. Why don’t you cite something from the President’s panel, charged with coming up with an alternative scheme?
Lightweights.
Posted by tubino
01/18/2005 at 04:54 PM
Another simple point: if you oppose Soc Sec on ideological grounds, fine. That’s your argument.
Don’t copy the Bush admin dishonesty in describing Soc Sec finances though. Stick to your ideological argument, and stick to the truth. After the Iraq-WMD debacle, this sky-is-falling routine just doesn’t work as well. Especially when the “crisis” is likely to be 50 years away.
The real short-term problem is of course that the federal deficit is balooning DESPITE raiding the Soc Sec surplus. Why don’t you try dealing with that? The investment system proposed by Clinton would have assured Soc Sec for the rest of the century.
It’s Bush’s record deficits that are the real problem. The economic decline of the US vis-a-vis the EU is the story of the next 30 years. EU already has system of fiscal responsibility, greater GDP, greater investment in the poor areas to bring them up, and greater population —PLUS the capacity to expand (add more countries).
Plenty of real issues to worry about, without adding to deficit a few trillion to enrich some firms and deprive the old folks of security.
Posted by tubino
01/18/2005 at 05:23 PM
turbino you said keep Social Security and we are free to invest in other taxfree accounts.
I have asked you 3 times what tax free accounts are talking about, name them.
But you can’t because you are a liberal asswipe tubino.
Posted by Z Woof
01/18/2005 at 05:26 PM
Hi Z Woof! If you are looking for investments, you might consider tax-free municipal bonds. Why not talk to an investment specialist? Ask them about 401K and 403B etc. Many of us here on earth like these options very much.
You’re distracted by details. The topic is Social Security financing.
I asked you guys to provide one analysis of the topic, and all I get is a bunch of crazy hand-waving. I don’t think one of you actually understand the basics of SS financing. I’ll make it easy on you. Read the Lowenstein article, and point out the inaccuracies. Easy peasy.
Posted by tubino
01/18/2005 at 05:37 PM
I could give a fuck less about any of your arguments. As for municipal bonds they do not yield what I would want from an investment early in my investment life. They may be great post-retirement, though.
Also I do not need to give you any references to any sort of analysis. It is patently obvious that if:
a. I make a contribution
b. I decide how it is invested
c. I take responsibility for my decisionsthen..........I do not need anyone else to give me “analysis.” I’ve done my own. I am credible in my eyes. Experts are a bunch of twits most of the time anyway.
On the other hand, you defend keeping a system that does not allow me to keep what is MINE. You want me to prove to you mine is better. I do not need to convince you. You will do what you want. But by the same token you should not have the power to tell me what to do with what is mine.
I want to be able to do so. No matter how much you dick around with immigration numbers, revenues, etc. it still does not allow me to keep my contributions and pass it on to my heirs.
Vilmar, yes, now you’re making the ideological argument. Now, wasn’t that a lot more satisfying than pulling a lot of numbers out of the air?
Now I can see clearly that you don’t care if the program is in fact adequately funded for half a century or more in the future. You don’t like the IDEA of it, and in fact the SUCCESS and popularity of the program probably make you even madder.
I know you’re not alone in this, but few can manage to state that case without also trying to mislead on the fact of the program.
Posted by tubino
01/18/2005 at 06:30 PM
tubino 401Ks are taxfree?
Thought you would come in and tell me what to read?
you won’t answer a question but like to make demands like a typicle loser liberal.
You said the fees were too high yet I said our HSA had no fees.
You keep Social Secuity tubino and let others have the freedom of PSAs if they choose just like you can choose.
Posted by Z Woof
01/18/2005 at 06:30 PM
Ladies and Gentlemen (ahem) this subject has gotten way the fuck out of hand.
Lets stop claiming authority and stick to the facts. It is complicated.
Maybe we’ll get lucky and there will be an epidemic that is spread by bingo and shuffle-board playing. It’ll wipe out 90% of those over 70.
Posted by Oink
01/18/2005 at 07:53 PM
You are looking at it all backwards.
Here is how we do it.
1. Stop Taxing and Regulating Alcohol,Tobacco, and Firearms.
In fact, offer Tax Deductions for them.
2. Levy a 50% Mandatory Federal Tax on all Food Stuffs found to be even remotely Healthy.
“If it not Deep Fried it gets Taxed!”
3. Same Tax goes for Memberships to Healthclubs,Gyms,etc.Let’s make these “Jack Lalane” Bastards foot the bill for their own longevity.
Why in the Hell, are us type 1 personality people,that enjoy life and will probably die of a Heart Attack at 62,supposed to support them when they are 87.
Z Woof,
What Bush proposal do you imagine you are endorsing? Why does it not look like anything anyone in the Bush panel has mentioned? IN other words, just where did you pull it out?Posted by tubino
01/18/2005 at 09:12 PM
Vilmar, you have 40+ years of non-retired folks who have paid into the system. If the promise made to them is honored, but next generations pay about one-third less into the SS system… then you manage to create a real shortfall. How do you plan to take care of that?
Also, it may be convenient but it’s silly to leave out the reality of SS beneficiaries (orphans, widows, others) who benefit from SS but who pay in nothing or far less than they get out. If you want the widows and orphans begging on the street, come out and say it, but it’s just silly to pretend that all that matters in your equation how much one investor can make on investments, without recognizing all that SS does.
Sure, you’re against it ideologically. Fine. But no need for irrelevant and misleading arguments about ROI. Tell you guys what: we’ll write up a simple contract, I’ll give you the money, you return it + a measly 3%. You geniuses all think you can make lots more, so you should get rich on the difference. Annoying Mike should be able to make loads of dough even returning 6% to me. Money, mouth?
If you guys can’t handle the cool assessment Lowenstein gives, maybe this pool is too deep for you. Vilmar forgot the 2 trillion in t-bonds, didn’t he? And with the rosy projections you assume on ROI, the SS system is solvent for the next century, past the boomer crunch.
But it’s not a pension plan, it’s INSURANCE. You’re covered even if you live “too long”. But if the ancient ones have to cut down on consumption, buying Friskies instead of franks, the economy suffers too. If the orphans are stealing on the streets because no SS, we can look forward to Brazilian-style street violence, while republicans intone pious sentiments about the sanctity of life.
Spare us all.
Posted by tubino
01/18/2005 at 09:58 PM
Links: There is no crisis.
FAQ on Soc SecYou guys are being taken for a ride. The driver in the ride is George W. Bush. At the end of the ride you’ll give up Soc Sec (the sum of your FICA payments) in return for getting to pay higher taxes to fund the retiring boomers, while trying to squeeze out more to invest for your own pension.
And if you and your spouse get run over by a bus before you can stash much in your PSA for the baby, WHOOPS no Soc Sec for the baby. Hope grandma and grandpa are around and can take care of the baby’s expenses.
The ride’s just starting! C’mon! LET’S GO! Let’s go bust a system that is funded to the end of its first 100 years!
Okay, show of hands: how many of you knew that Alan Greenspan headed a committee that looked at the boomer retirement problem, and as a result recommended raising FICA, which was done. Which is why there is no crisis now. Which means the problem was largely dealt with years ago.
How many of you knew that?
Posted by tubino
01/18/2005 at 11:25 PM
Coming into this late as usual but here’s what I’m thinking...SS takes more of MY money every year. The ‘retirement’ age is raised far too often. Reform is needed. Crisis/problem? Doesn’t matter. It’s all symantics. Either way, it IS a problem b/c it’s taking MY money from MY pocket.
Allowing a small percentage to be kept by me and invested/used by ME is taking that much more of the government out of my life. That reason alone is worth the amount of work it will take to get it done.
People don’t invest? Their problem. They ‘retire’ poor and destitute because of their choices? Their problem. Our Constitution gave no promises except for the ability of individuals to make something of/for themselves. Seems that SS reform would be more in line with the Consitution than the crap we have going now.
However, we are relying on career polititions to put reform into place. Sorry to say, but like the Fair Tax issue, I doubt we’ll ever see it. But it would be nice if our kids did.
Tubino,
It is painfully evident you joined this discussion to spout your liberal nonsense because if you had read what I wrote you’d have seen where I coverd how to handle taking care of those who are still in the system while others go private. I suggest you go read that again.
As for taking care of those that are now leeching off the system, that, too, needs to be changed. Way too many people are sucking off this tit and like welfare it needs reform. The elderly and widows/widowers could still be taken care of and that can be done through savings generated by the gradual elimination of the SSA and its 64000 employees with all their benefits, salaires, healthcare and retirement costs. Not to mention the savings in overhead through office spacem heating, cooling, maintenencae, etc.
Satisified? I doubt it as your type loves a “mommy government” they can snuggle up against for comfort.
Vilmar,
You are still using cheap rhetorical tricks to cover your lack of understanding of Soc Sec fundamentals. The ideological argument is honest, but your numbers about the benefits are totally whacked, though you could easily find sources to explain how current benefits are much HIGHER than they would be if calculated on your erroneous assumptions.You also don’t have any idea about the efficiency of the system that serves millions.
As I keep saying, if you are against because it is a socialist program (which it obviously is), fine. But you lose any speck of credibility when you use bogus numbers.
You can’t back up your claims about “savings” any more than the President’s blue ribbon panel could. 64K employees is extremely efficient compared to private alternatives—a point supported by all studies, numbers, comparison with Brits, etc.—and baseless assertions to the contrary are just that.
It’s curious that you all think that “ownership society” can only mean a risky share of corporate America. Right now as a US citizen (assuming you are) you own a bit of state and national parks, a bit of the airwaves, a chunk of national mineral and oil resources, and a guaranteed insurance program (Soc Sec) if you pay into it a minimum number of quarters. I find it curious that handing over shares of OUR holdings (they are OUR holding!) to corporate ownership at bargain prices for partisan gain is considered a de facto gain.
Really, the Soc Sec “reforms” are kinda like the other privatization schemes. As citizens we own them. So let’s vote in politicians who give them away so that we can buy them back again. Let’s ignore that we already have the insurance program currently OVER-funded, and give it away to Uncle Sam to fritter away so that we can pay for it again, twice, through higher taxes and/or additional borrowing, PLUS having to fund our own retirement, AGAIN.
What a bunch of saps you guys are. Depending on your age, you may be endorsing a program to eat your cake now (spending SS surplus while cutting taxes during war), have your kids fund your cake again later, and have your kids have to buy their own cake too, while saddling them with a MASSIVE federal debt.
In 20 years, when the boomer retirements are in full swing, and the gov’t has borrowed trillions more, and the US economic situation has caused its lenders to charge more to continue loaning, and your kids are carrying the triple load… oh what a lovely ownership society we’ll have.
What is painfully evident is that none of you can do the basic math here. Right now Soc Sec is kinda like 3 (revenues) - 2 (payouts) = 1 (surplus).
You propose that 1 (reduced revenues with diverted FICA) -3 (boomer payouts) > 0. By the time you wake up and realize that you endorsed a system guaranteed to INCREASE deficit spending for decades, we’ll be down the road to Argentina. What each of us will own is MORE DEBT, less security.
I’ll be keeping the option of dual citizenship for my kids, thanks.
Posted by tubino
01/19/2005 at 07:45 AM
Exactly BobF. Stoopid tubino says if we REFORM Social Security (SS) with PSAs that we will be throwing widows and children to the wolves, what an ass.
100% of the Social Security tax is 10% of income going to the Tax Free PSA. The other 2.4% goes to life insurance and disability insurance. Life insurance is very cheap when you are young.
I do have to respect tubino a little, very little I might add, because he has now switched and is writing the “Ownership Society” and Tax Free PSAs so his TIME here has been well spent, for him, and not for us. For us it’s like OMG he is such a stinkin’ liberal I hope he gets his dead ass out of here soon.
Posted by Z Woof
01/19/2005 at 09:30 AM
You wankers are much more interested in throwing rocks than actually thinking about anything. The silly insults are evidence that the water is too deep for you.
BobF—not sure Soc Sec works as you indicate, but I do know that it is an insurance program. Just as with insurance, some collect more than they pay in, some collect less. You can put away the violin and the tears. We pay house insurance in the hopes we don’t need it, but in the case of Soc Sec the way to “win” is simply to live a long time. The way to “lose” when you are dependent on a private plan is to outlive what you can afford to get out of it.
Not one of you has actually indicated even the BASICS of real math, for existing or alternate system, that makes any sense at all. Vilmar’s post doesn’t pass the laugh test, but could serve as a starting point, if anyone were interested.
Z Woof, don’t kid yourself about my learning the phrase “ownership society” from you lightweights.
Have fun tossing your insurance out, SUCKERS. You’re endorsing the biggest heist in history.
The real joke will come when you realize you’re still on the hook for all the risk (not just personal, but govt debt plus the survivors et al who become productive citizens due to SS).
The Bush plan can be described as privatizing the guaranteed profits, socialzing the risk, reducing or eliminating the progressive structure of payouts while increasing the regressive tax structure that props it up.
I’d take a wager that those who have posted so far are on the losing side of that blade. Barring misfortune, I may be blessed to be on the winning side, nominally, but the social cost will hit all.
Posted by tubino
01/19/2005 at 10:09 AM
You are such a stoopid schmuck and fruitcake tubino. Please, you should just quit saying you have insurance knowledge and wisdom, get real. Are you liciensed tubino, like me, or are you just thinking you understand insurance law?
First you can’t call something insurance just because you get back less than what you put in, you foron. Sure, you can call it a ponzi scheme if UFO polling indicates the youth feel screwed and abused by Democrats like Ted Kennedy and tubino.
Hey tubino you and the AARP and Consumers Union and the Robert Wood Johnson Foundation and all those other lefty loosers listen up;
You are so easy to trick that the Tax Free PSA will be passed reminicent of the tax free HSA in the Medicare RX bill. It was like taking candy from a baby, a blind baby that is. turbino those of us that are about to defeat you salute you, ha ha.
Posted by Z Woof
01/19/2005 at 10:53 AM
Another illiterate, incomprehensible post from Z Woof.
I pointed out that you folks are endorsing a plan for the govt to steal your money twice. Since you can’t address it, you poop in your diapers and fling it.
If you don’t understand why Soc Sec is an insurance program, a supplement rather than a pension plan, you’re a lost cause. But that was clear from each of your pot-banging feces-flinging posts.
If a single one of you could address the issues, it would be a miracle.
Posted by tubino
01/19/2005 at 11:01 AM
turbino you say, “If you keep your FICA tax and put it in your own PSA at the bank, FDIC insured, that is like the government stealing your money twice, so keep sending your FICA tax to DC so you will still have it, and be able to pass it on to your children, so they can have a buck or two after your dead.”
Posted by Z Woof
01/19/2005 at 11:32 AM
Hey turbino the fruitcake --- here are some more numbers just for you. These numbers come from Constantin T. Gurdgiev, Department of Economics, Trinity College, Dublin, he says:
“A successful example of such reform is offered by Chile, which in 1980 replaced the PAYE-type entitlement with the privately administrated system of Personal Savings Accounts (PSA). According to Dr. Jose Pinera, the plans architect, within 23 years of operation, the system based on voluntary participation attracted more than 95% of all workers, increased the national savings rate to 27% of GNP and helped push economic growth to 6.5% per annum. Most importantly, the PSA system closed the country’s pension gap.”
When you said study the real numbers did you mean these numbers you fruitcake tubino?
Posted by Z Woof
01/19/2005 at 12:07 PM
Z Woof,
You’re still flinging feces, but at least now you’re trying to engage in dialogue, sort of! Of course you imagine you’ve said something substantial, though you haven’t.
The Chile example—the only one ever offered by this administration, and the Cato Institute—is not as rosy as you like to pretend. There are several reasons: selective choice of time period to make it look good; neglecting to mention the FEES paid out of contributions; and neglecting to mention that the Chilean gov’t has to step in to make indiv pensions come up to a minimum in a significant number of cases. The trend line for that number of cases is what you want to look at.
And that’s the BEST (only?) example the Bush admin has.
You don’t hear much about the Brits, though there are plenty of reasons why that’s a much closer parallel to any plan likely to go forward in the US. Read this on UK system.
Try again. Try harder.
Posted by tubino
01/19/2005 at 01:49 PM
Sure Sure tubino you are always wrong.
Chile is an itty bitty 3rd world country that could not compare to the United States.Sure the Chileans resricted their investment to certain companies in their PSA. However in the United States we have the Tax Free HSA to use as a blue print to create the most possible effective PSA for the US citizen as a new option in Social Security.
I’m sure tubino you would not want to say something negative about the tax free HSA because it my friend, is the Ultimate Panacea, and I’ll really mop up the floor with you.
Hurry tubino, bone up on the tax free HSA you fruitcake.
Posted by Z Woof
01/19/2005 at 02:41 PM
Oops, busted link. I’ll try again.
No, it keeps truncating it… Maybe like this:
<http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=8997>
That’s if you want to read up on how privatization has worked out in UK.
If you prefer a faith-based ideologically-driven course that could drive the country further into debt, causing a spiral into economic collapse… well then don’t read it. Mmmmkay?
Posted by tubino
01/19/2005 at 02:41 PM
Z Woof,
Quit sputtering and simply try to make your case, and explain how it’s relevant to anything anyone with any power has suggested might in some way tie in with Social Security.
I’m happy you’ve found nirvana in the form of HSA and want to share it. You seem to think you have a sword or something, rather than the results of successful legislation, but.. whatever.
How would you like to open access to your HSA to more people?
And why are you first using Chile as an example, then saying it can’t compare? Your HSA does not appear to help your thinking.
Posted by tubino
01/19/2005 at 02:47 PM
Blast of political reality:
Bush’s Dead HorsePosted by tubino
01/19/2005 at 02:56 PM
Blast of reality about YOUR ACCOUNT
Wake up and smell the deception.
Posted by tubino
01/19/2005 at 02:59 PM
I’m saying the USA will do a better job in creating PSAs in Social Security than Chile did 24 years ago.
I’m also saying jerks like you, tubino, said that the world would come to an end if HSAs were passed and like you they were wrong.
How can you say you are a good liberal and you can’t say HSAs will distroy mankind?
HSAs and PSAs are the Ownership Society.
The New York TIMES has had plenty of articles negative of the HSA just like now they have negative PSA articles - it’s just the same old crap from the LIBERALS like you tubino.
Posted by Z Woof
01/19/2005 at 03:12 PM
Sure tubino I read your propaganda.
SO PSA balances could not be placed in the bank and FDIC insured.
I think that’s a lie tubino, what do you think?
Posted by Z Woof
01/19/2005 at 03:17 PM
Boys and Girls,
It looks like we’ve done bagged us a moonbat!
This is fun!
You guys are hopelessly incapable of either reading or writing. These weird assumptions about what I think, the strange twist given to something I write…
Moonbats you are, and moonbats you will always be.
I kinda liked this evidence of a disturbed mind:
How can you say you are a good liberal and you can’t say HSAs will distroy mankind?Complete nonsense, and the misspelling really tops it off.
Not a single one of you can even bother to notice that the President’s own panel concluded that at minimum a couple trillion MORE must be borrowed to initiate privatization, with much greater expenses down the road.
What will you tell your children?
Posted by tubino
01/19/2005 at 03:34 PM
Wanna read a debate in which your side gets utterly devastated by reality?
Wall Street Journal, well-known leftist rag
It might be interesting if one of you could actually cope with the issues.
It might be interesting… but then so might moonbats in your car.
Posted by tubino
01/19/2005 at 03:40 PM
Unbind your mind tubino
Trust me tubino Social Security goes up by the Consumer Price Index (CPI). Hell it will take 25 years for the check to double in size. Yet Medicare premiums are taken out of your Social Security check and double in cost every 6 years.
tubino your so-called Social Security check will be eaten up by the increases in retirement health care costs, in this case Medicare premiums. turbino you are like a gay online editor who thinks spelling is so important yet like a girl with very poor math skills lets your eyes glaze over anytime someone discusses any math, you’re pathetic.
So tubino are you saying tax-free PSAs in Social Security REFORM is out?
Posted by Z Woof
01/19/2005 at 04:28 PM
Z Woof offers more evidence of a disturbed mind, and imagines all sorts of things I never said.
Sure, Soc Sec is inadequate, yes, Medicare actually does have a funding problem.
So why not address these problems, instead of making up new ones (Vilmar’s post), or yammering about PSA’s? Why don’t you simply show the math that you think WORKS? (Don’t forget about the interest on the additional debt! Try the WSJ link for a nice bitchslap of reality there.)
I mean the real, honest-to-gosh actuarials that show your plan has a chance. If you can do that, you’ll have completely outdone the President’s panel, and might get yourself a medal. Call me a skeptic.
Not one of you has shown you can handle even the basic version of the math involved here. The Lowenstein piece makes it quite easy, and more involved sources are readily available.
More yammering from the lightweights.
Posted by tubino
01/19/2005 at 04:35 PM
"Basic version of math involved here.” WTF????
Here’s some basic math (and some basic facts).
Social Security started with seven workers supporting each retiree. It’s down to two workers for each retiree and declining for the forseeable future.
Americans are living longer, which means retirees are collecting SS checks for longer periods of time. The average retiree on SS collects back his/her taxes and imputed return in just a few short years-well short of his/her death. Bottom line, SS retirees are effectively on the dole after their meager contributions are “returned.” In fact, poorer seniors (those in low wage jobs during their earning years who paid little into SS) receive a retirement benefit proportionally larger than their contributions and earnings. So they are on the dole even sooner.
Payroll taxes for SS have an upper income limit. After about $85K or so in wages, one doesn’t pay SS taxes on wages above the cap. Rising wages don’t count after that point.
SS tax revenues in excess of SS expenses are only invested in debt instruments of the U.S. Government. This means the investments are as sound as the U.S.A. but only provide a real rate of return of about 3%.
The very first SS retiree collected a check within weeks of the system being implemented. She and others benefited without any significant contribution to the “trust fund.”
The bottom line? We’re paying more benefits to more retirees who are living longer while the number of non-retired workers to support the system is declining.
The government has postponed the date revenues fall short of outlays by raising the payroll taxes (regressive and anti-business) and pushing back the age for full retirement.
Sadly, the system probably wouldn’t be in this mess if the government had taken some risk and actually invested excess SS taxes in the market when they started this pyramid tax scheme. It didn’t and it won’t, but only because the politicians (Democrats and other quasi-socialists) won’t allow that to happen.
Allowing younger workers to invest part of their SS taxes in retirement instruments other than U.S. Treasury instruments would provide a meaningful rate of return on investments and lessen or relieve the future taxpayers (my children and grandchildren) of paying taxes while I live (very comfortably) on the dole. BTW, that comfort would not be provided by SS but by other employment retirement plans and my own tax-deferred savings.
Let’s make a systemic change to the system instead of postponing the dates when revenues fail to cover outlays and when the “investments” of SS are exhausted.
You want math and facts on the social security issue Turbino? Read the WSJ instead of the NYT. For that matter, read the WSJ for the news as well. I don’t know what the hell the NYT is good for-after all, we can buy Charmin.
Posted by Annoying_Mike
01/19/2005 at 09:01 PM
Social Security started with seven workers supporting each retiree. It’s down to two workers for each retiree and declining for the forseeable future.
As soon as you see this, you know someone is either ill-informed or trying to deceive. Mike, this is not how you calculate the longevity of Soc. Sec. It *is* how you try to fool people. Ratio is lower than ever now, and SURPLUSES ARE PEAKING. You need to learn to read charts.
Then you resurrect this one:
Sadly, the system probably wouldn’t be in this mess if the government had taken some risk and actually invested excess SS taxes in the market when they started this pyramid tax scheme. It didn’t and it won’t, but only because the politicians (Democrats and other quasi-socialists) won’t allow that to happen.Covered above. Clinton proposed exactly that, but Greenspan and others wouldn’t back it, and had the power to kill it. You’ve got the party affiliations backwards. Yes, that would have helped – but not Social Security (unless you think US govt will default on treasury bonds held by SS Trust Fund). It would have helped when the Trust Fund needs the surplus, which we will all get to pay, again, with the more regressive tax structure. Basic math, folks!!!
Also note that I linked to WSJ above.
You guys aren’t getting any better at reading.
Posted by tubino
01/19/2005 at 11:03 PM
tubino you will let Clinton or the feds to invest in the markets but you don’t like individual citizens investing in the market, you Socialist pig.
Speaker Hastert said, “I figured out the difference between the political parties talking to Hillary and the subject was MSAs. Hillary sad, ‘NO, NO, NO that puts too much money in the private sector,’”
Sorry tubino you looose. You can’t stop the debate on Social Security and as soon as you focuse on it - it sucks.
SO - let’s give young citizens the option or choice or FREEDOM to stay in traditional Social Security (PONZI SCHEME) or get real rich by investing their SS Tax into Tax-Free PSAs, that are FDIC insured at the bank, or the option of mutual funds.
All young people that don’t want ownership of their PSAs should listen to tubino and screw themselves big time and stick with the really old way of doing Social Security. You know the 1937 way where more young people believe in UFOs than believe Social Security in it’s present, traditional way, will not be there for them because it’s a sacist, biggotted sort of deal that as a citizen you have no ownership rights into. Not true with PSAs, if the are like tax-free HSAs, because those babies the citizens do own them and they are personal portable property.
Hey tubino do you think we should give Medicare peoples the option or choice or FREEDOM of Tax-Free HSAs as a way to REFORM Medicare so citizens have even more options?
Posted by Z Woof
01/20/2005 at 06:09 AM
Z Woof shows that he can’t even begin a serious discussion with this silly baseless dodge: tubino you will let Clinton or the feds to invest in the markets but you don’t like individual citizens investing in the market, you Socialist pig.
Z Woof, take a deep breath, focus, and read this very very slowly. I pointed out above that I have market accounts, and I like them. I’m glad others have that opportunity, and invited you to share how you would like to expand those opportunities.
No, your assertion is baseless. What I *have* done is point out that the numbers must add up, and so far all the proposals go like this (irony inserted):
---------------------------
OHMYGOD there’s going to be a funding shortfall in only a FEW DECADES (or never), and when that happens Soc Sec revenues won’t match promised benefits!!!
If we let that happen, the govt would have to tap the general fund to make up the shortfall in its commitment to its citizens!!!
That would mean more borrowing, or a reduction in benefits!!!
So let’s propose an alternative in which the government must borrow ... oh a couple TRILLION dollars… AND probably reduce benefits in order to ensure that the central point of Soc Sec ... (SECURITY OF GUARANTEED MIN. PAYOUT FOR LIFE) is no longer guaranteed.
---------------------------In other words, the math doesn’t add up. That’s what I keep pointing out, and not one of you has even attempted to refute it. And you can’t, because the President’s panel, handpicked to be ideologically favorable (understatement) to private accounts and willing to skew numbers, could not do it.
That’s my assertion, and it still stands.
Keep reading slowly: I never said private accounts were a bad idea. I said that all the alternatives to the current system, which claim the current system is too expensive, are in fact MORE expensive, and require decades of additional borrowing in the TRILLIONS, and they promise LESS, in coverage, benefits, guarantee.
I also said the claims of a “crisis” are silly. The Cato Institute has been making the claim since 1970. In 1934, at the very origin, a population projection was made for 1990 regarding the percentage of the population that would be over 65 yrs, and guess what? The 1934 projection was very close to 1990 reality, but was slightly HIGH. My point is that you knuckleheads are brainwashed into thinking that the system hasn’t taken into account the worker-beneficiary ratio, when in fact Greenspan headed the committee that recommended the FICA hike that has resulted in the 1.5 TRILLION in surplus currently held in the form of Treasury Bonds, which you guys conveniently forget. The REAL problem is the expanding Federal deficit, much worsened by Bush and the misdirected tax cuts.
Got it now? Try again. Try harder.
Posted by tubino
01/20/2005 at 07:20 AM
Gingrich Admits There Is No Crisis
Alternate link in case above is truncated:
<http://www.bloomberg.com/apps/news?pid=10000103&sid=aziXgxWAuigc&refer=us>Gingrich of course strongly endorses private accounts, but is one of a growing number of Republicans who aren’t willing to go along with the crisis lie.
Posted by tubino
01/20/2005 at 09:34 AM
sorry tubino you picked the wrong loser this TIME with Newt Gingrich, that Bozo.
Newt’s Center for Health Transformation that he let’s Vance Haley run his information rich HSA department is about as wacky as it gets, sorry. Newt and Vance can’t even get the qualifying deductibles right at their web site for HSAs. They say for the lower HSA deductible it’s $1,000 and for a family it is $2,500 (SEE that’s wrong) --- then the loooser Newt says max HSA deductibles are $2,600 for a single and $5,150 for a family --- Yet I have a $10,000 family deductible that I enroll people into. So who is right—Newt or me?
Newt is just being an asswipe to the President because then liberals like you tubino will say his name, he sucks.
So I don’t give much consideration to anything Newt says, sorry tubino.
Who would pay Newt $50,000 to speak?
Posted by Z Woof
01/20/2005 at 10:38 AM
Z Woof focuses like a laser beam on a peripheral non-issue like Gingrich’s credibility, thus sparing himself the difficulty of addressing the real issue: is there a Social Security crisis? If so, why, when it continues to add to $1.5 TRILLION in the form of Treasury bonds?
I don’t care about Gingrich either. The point is that lots of Republicans don’t want to be on record spouting the crisis claim, because it is likely to blow up in their face like the Iraq WMD claim X 100.
Go back and read the first lines of Vilmar’s post to see why the crisis claim is relevant:
It just can not continue to operate the way it does.So Z Wolf, what happens if nothing is done? What are the problems, and when do they arise?
Posted by tubino
01/20/2005 at 11:04 AM
The big problem with Social Security is how it discriminates against Black people.
I know tubino you say who cares about those with shorter lifespans and fairness.
I just think ownership and being able to give your wealth to your children is recommended.
When a Black male dies at 60 years of age and his daughters are about 40 years of age all PSA balances should go to his daughters if he has no surviving spouse exactly like a tax-free HSA would do today.
The PSA is more family friendly to children of those who die at about 60 years of age.
White women live the longest in the USA.
Posted by Z Woof
01/20/2005 at 11:55 AM
Z Woof,
How about, the big problem is how SS discriminates against chronic drinkers, obese folks and diabetics, the accident prone, addicts, and those suffering from hypertension and arteriosclerosis.If you want to use lifespan numbers relevant to Soc. Sec., you have to take out the infant mortality factor, idiot. If you do, the differences of race are greatly minimized, and are much smaller than other factors. But I don’t think any of this actually matters to you, you’re just looking for whatever rock you can reach without exerting yourself.
I can’t believe you’re this dumb.
Okay, I can.
Please. Try harder.
Posted by tubino
01/20/2005 at 12:19 PM
Z Woof,
Even if you believe that claptrap about fairness and longevity, what’s your solution? I mean, how would you fund your solution while adequately funding Soc. Sec for those retiring over the next 40 years, who are already IN THE SYSTEM?
Here’s a good neutral explanation of the funding problem. Very readable and straightforward.
Posted by tubino
01/20/2005 at 12:34 PM
My solution is the OPTION of Personal Saving Accounts (PSA) in Social Security.
I can’t believe you’re this dumb.
OK, I can because you tubino are a fruitcake.
Please go away you liberal slime.
Posted by Z Woof
01/20/2005 at 02:32 PM
Z Woof,
Fine. So where do you get the 2-10 TRILLION dollars to make up the shortfall for the people who are in the system, who won’t be paid out of the revenue of new workers?
Jeez. Get it now? You’re not offering any solution at all. Not even basic math. Read the link labeled “explanation of the funding problem” to see why.
Another exercise for Annoying_Mike: For the next ~8-12 years, surplus revenue will accrue in the Soc Sec Trust Fund, where it will promptly be snapped up to finance federal deficits, with IOUs (special issue Treasury Bonds) taking their place.
The (repub) Congress could change the law to permit Soc Sec Trust Fund to keep the assets in forms other than T-bonds, namely to invest in money market funds etc. Not only would this give the SS fund a lockbox, but I’m sure you all would agree it would provide a nice ROI.
So… why doesn’t the repub congress do it, and have Bush sign the law?
Think about it.
Posted by tubino
01/20/2005 at 02:46 PM
Your problem tubino with me is that I currently make my living enrolling people into Tax-Free HSAs and I think it would be to my personal advantage if Social Security Reform included another Tax-Free Personal Savings Account or PSA and maybe I could make more.
You see I’m only in it for the money, that’s for sure.
And you say it would cost $10 trillion for the transition?
Posted by Z Woof
01/20/2005 at 03:51 PM
Z Woof,
Not sure why you imagine an issue of national importance like Soc. Sec. revolves around the personal lives and politics of two guys on a blog. Seems to me it’s about the ideas.The number frequently tossed out for transition is $2T, but if you use the Bush trick of assessing costs over an infinite horizon, you can easily come up with $10T.
Still waiting for you to tell me what happens if nothing is done about Soc. Sec. Still waiting to hear an explanation why legislation isn’t proposed to put SS surplus into an investment fund.
Posted by tubino
01/20/2005 at 04:02 PM
Here’s another clear explanation of the funding problems and non-problems.
Some of you REALLY need to wade through a decent explanation. Here’s a catchy little excerpt:
Now we hear a hypocritical chorus on the right telling us that the Trust Fund’s assets are meaningless “IOUs” (Ramesh Ponnuru of National Review) or that the government’s “promise” to pay Social Security benefits is “less and less believable” (George Melloan of the Wall Street Journal).
Note the bias here: Property rights are the foundation of capitalism—but put that property in the hands of a program conservative Republicans have ached to destroy for 70 years, and suddenly it becomes transient, elusive, unreliable. When a Treasury bond is held by a private citizen or a foreign government, it’s a financial obligation, indeed one of the most reliable and conservative investments around. But when it’s held by an arm of the government in trust for the retirements of millions of working people? Then it’s just meaningless paper. (Try using that argument on the bank that holds your mortgage or your credit card account! “Oh, yeah, I know I said I’d pay that money back, but it’s really just meaningless paper, you know, and I already used the money for other stuff that I believe in. We’ve got a crisis.” )
Conservative advocates of the Social Security pseudo-crisis like to say that the Social Security Trust Fund is an “accounting fiction” because it’s just one arm of the government owing another. Of course, it’s not an accounting fiction every April 15 when we tally up the 12 percent or so of our income that we pay into it. It’s only an accounting fiction if you’re George W. Bush and you and your Congress have raided the account and now you’ve got to come up with a good story for the American people about why you think it’s more important to keep cutting taxes than it is to meet your Social Security obligations.
As Vilmar said, it is very important to understand the basic math at work here. And that includes understanding the SS Trust Fund. It’s OUR MONEY, and the thieves in charge are making plans to cheat us out of it. Oh, and freedoms’s on the march, comrades.
Posted by tubino
01/20/2005 at 06:00 PM
Yo! Vilmar! You’re gonna LOVE this. Stan Brown of a new blog called twominuteoffense.blogspot.com offered these thoughts in a 1/18/05 post:
Ted Kennedy and the Democrats, along with allies such as AARP, are telling us that investing our retirement savings in the stock market is a terrible idea. I have some questions for the senator:
1. If investing social security assets in the stock market is a bad idea, wouldn’t putting my IRA assets in the stock market also be a bad idea?
2. My investments in American companies depend on the ingenuity, hard work and productivity of American workers. Why is it a bad idea for me to base my future on America’s workers?
3. Investment in our capital markets helps create jobs. Why is creating more and better jobs for American workers such a terrible idea?
Happy_Retiree,
Looks like Stan Brown has made himself a nice straw man to kick. SS does not equal “retirement savings.”I wonder how Stan would answer this one:
The Republican-dominated Congress could change the law to permit the Soc Sec Trust Fund to invest its record surpluses in money market funds etc. Not only would this give the SS fund a lockbox, but it would provide a nice ROI. So why don’t the Republicans do it, and have Bush sign the law?Posted by tubino
01/20/2005 at 11:03 PM
i don’t usually come to this site for financial advice from liberal greasy hippies.
Not one of you wankers will even attempt to explain why Republicans aren’t crafting legislation to invest the SS surplus? NOT ONE???
Not even after the Stan Brown post? Why don’t you just get the words Unthinking Hypocrite tattoed on your forehead? Oh right, not enough room there.
Buncha candy-ass lightweights.
Posted by tubino
01/21/2005 at 12:30 AM
Ease up, Tubino. I think you’ve managed to run this thread into the ground already. This has degenerated to the point of everyone participating in name-calling and I figure that has gone far enough. Why don’t you folks pick another subject for a while? Enough is enough. Take this as an official warning from the owner of this blog. Carry on.
Hi, I’d just like to add one more bit of info—no name-calling or incendiary words. I tossed out the $2T estimate for transition costs, but here’s a fuller explanation:
Despite Bush’s furious animadversions, the social security actuaries in their most sober assessments report that the current system will issue full benefits without any changes until 2042. Only the slightest modifications then would guarantee complete solvency beyond that into the indefinite future. Thus the “iceberg” melts before the facts.
“It’s a badly, badly flawed plan,” Robert Rubin, the former secretary of the treasury and current Citigroup director, told me. “From a fiscal point of view it’s horrendous. It adds to deficits and federal debt in very large numbers until 2060.” He calculates that the transition costs of Bush’s plan for the first 10 years will be at least $2 trillion, and $4.5 trillion for the second 10 years. The exploding deficit would have an “adverse effect on interest rates, an adverse effect on consumption and housing prices, reduce productivity and growth, and crowd out debt capital to the private sector. Markets could begin to lose confidence in fiscal policy. The soundness of social security will be worse”.
Posted by tubino
01/21/2005 at 11:30 AM
Your problem tubino, and I will say this as nice as I can, is that John Kerry lost the election to George W. Bush and his ManDate Machine in both houses of congress.
If, in another world, where Kerry actually won the election, maybe we would be talking about the United States Federal Government investing into the stock market instead of individual citizens with their Tax-Free Personal Savings Accounts or PSAs, sorry.
President Bush said, “I’m a big believer in Personal Savings Accounts (PSA) as an option in Social Security.”
Really tubino more options and choices can’t be bad could it?
Posted by Z Woof
01/22/2005 at 02:29 PM
Pretty funny that you mention MANDATE in the context of SS. Bush’s campaign carefully ignored the privatization issue till AFTER the election, then claimed his narrow margin of victory gave him a mandate on the issue.
It’s strange to me that you think I have something against personal choice, control, or investment in the market, especially after all I posted here. My problem with the reforms offered so far is simple, and consistent: the math doesn’t add up. Just because you WANT something to work doesn’t mean it works.
By the admission of the President’s own panel, the move to private accounts, with reduction in SS revenue, will cause the Fed Govt to borrow enormous add’l sums, AND will quite likely require a reduction in benefits greater than, and much sooner than, if nothing at all were done. Again, that’s what the PRESIDENT’s PANEL says.
So by going to private account financing, we get to pay much much more, for less. Does all this deficit spending matter?
Since Bush took office, the federal debt has increased by about a couple trillion dollars to over seven trillion, so Bush owns a substantial fraction, over one-fourth, of the total debt. (In four more years this group of Republicans will have been in charge for probably over one-third of a nine trillion debt.)
In coming years, the federal govt will continue deficit spending, despite deceptively counting the Social Security surplus. To make matters worse, the international lending market is getting spooked about the US fiscal situation, and will not continue lending on the same generous terms as before, so borrowing will get more expensive. (Exact opposite of what happened when Clinton admin reduced and finally eliminated deficit spending.)
In other words, Bush’s ownership society is marked primarily by letting everyone own a steadily increasing DEBT, with increasing debt service (in percentage, as well as in principal), while facing increasing liabilities (~$2T in Soc Sec Trust Fund Treasury Bonds coming due from ~2012 to 2050). If you thought tax-and-spend was the irresponsible course of Democrats, consider that it’s fiscally UTOPIAN compared to the credit-card-borrow-and-spend of the current administration. The attitude is exactly that stated by Dick Cheney: “Deficits don’t matter. Reagan showed that.” In the political sense that the population thinks of Reagan as a deficit hawk though deficits quadrupled during his reign, then Cheney is right. But in the long run economically, of course, they DO matter.
That situation is the opposite of fiscal responsibility, and the opposite of true conservatism. It weakens the nation. It limits the US in international responses. It reduces options domestically. It dramatically increases the share of US assets controlled by foreign interests, such as China (who do you think buys the bonds that finance the Bush tax cuts = deficit spending???). It means that when a future administration is forced to contend with the untenable increase in deficit spending, the US will have to increase taxes or dramatically cut services—AND quite likely military spending, unless citizens are kept sufficiently frightened to support spending as much as the entire rest of the world on the military.
I am quite sure that the forces controlling the Republican Party are fully aware of this. And not only do they not MIND this, they DESIRE it. The Grover Norquist – Stephen Moore crowd wants to ensure that any fiscally responsible administration will not be able to keep spending and taxes RELATIVELY constant while decreasing deficits to the point of surpluses. They are trying to ensure that the only route to have both fiscal responsibility AND political survivability is to reduce the size of the federal government.
I’m sure plenty of folks here agree with the small govt philosophy --apart from the military, and possibly corporate welfare. But in practice we’ve seen that in this fine democratic country it is not easy for the most radical small-govt forces to get their way. So they are going to use their power to force it upon the country, by driving it further into debt.
It’s a huge, dangerous, radical gamble that the neocons are pulling on us. Already, countries like Iran and Korea are emboldened by the US troop overstretch in Iraq. If the US fiscal situation is allowed to worsen to the point where citizens will not or can not approve spending (=borrowing) additional military money on top of the annual $500 B, invasions/occupations like Iraq will simply not be an option.
THAT is my problem with the Social Security reforms envisioned by Bush’s team: the numbers don’t add up; instead they only indicate fiscal matters getting worse. This is the same team that promised that the invasion and rebuilding of Iraq would be financed almost entirely by Iraqi oil revenue. The same team that predicted that the tax cuts would spur the economy, while presiding over a Herbert Hoover-sized job loss. This team now wants to convince you that you can count on a solid ROI in the market – but that there is an endless supply of international moneylenders who are too dumb to take advantage of THAT market, and instead they’ll keep buying US bonds at a lower interest rate than that market ROI. It makes NO SENSE.
Posted by tubino
01/23/2005 at 08:53 AM
Okay, here’s a last attempt to get it across. Imagine President Hillary Clinton (work with me here for a minute) proposes a plan to BORROW something like 4 to 5 TRILLION dollars to finance a pet plan (manned flight to Mars, or pick something overtly ideological like providing health care to all). Imagine I’m endorsing Pres. Hillary Clinton’s plan for Mars, or universal health care. Imagine you oppose it, pointing to the CBO assessment that it will cost several trillion dollars over the next decade, when the US is in a bad position to be putting more on the credit card. Imagine I keep coming back, accusing you of being anti-science, objectively pro-bad-health, whatever, but I keep ignoring the actual cost. Instead I spout airy-fairy numbers of how much we’ll save, how exploration of Mars will pay for itself in minerals. Never mind that Hillary’s own panel says it will cost trillions, I ignore that. You call me barking moonbat.
Except in this case it’s you ignoring the numbers, and refusing to admit the studies by the President’s commission and CBO. Instead, you want to claim those who don’t embrace the reform are big-government-loving anti-market fossils.
Now keep in mind that everything I say above is found in links I’ve provided, though not in the mainstream media, which mostly repeats Bush talking points. Keep in mind that I’ve left out plenty of worse scenarios, such as the reform including provisions to guarantee a minimum payment if your investments don’t produce it (your example of Chile), which of course encourages risky investment in PSA’s…
The Bush Admin is doing a con job, and all you need to know to prove it is that they are being dishonest about the numbers, in order to sell it. You’ve got a car guaranteed to run fine till 2042 or 2052, and they want you to buy – on credit – a shiny SUV that might fall apart before 2040. They want you to give the existing car to your parents, but will have you funding the new SUV to the extent that you can’t maintain the old car, which then won’t make it to 2040, thus creating a crisis where there wasn’t one. That’s why AARP opposes the plan, not because of any anti-market straw man arguments.
Posted by tubino
01/23/2005 at 08:55 AM
Here’s the latest from a guy who has been arguing AGAINST Social Security for a long time:
“The president’s concern about fiscal child abuse is well placed. But the chasm separating Social Security’s future benefit commitments and its future payroll tax receipts is just a part of the story. There is a much larger fiscal gap separating total projected federal expenditures (including debt service) and total projected federal taxes. The size of this red hole was calculated by Treasury officials two years ago at $45 trillion. Their current estimate is $6 trillion larger thanks to the president’s 2003 tax cut and the new Medicare prescription drug benefit.
Numbers this big are mind-boggling. Some say these bills won’t come due for decades and can be paid when the economy and its tax base are much larger. Unfortunately, that’s not the case. The $51 trillion figure represents the amount of money we’d need to have today to avoid raising taxes or cutting spending down the road. Think of it as Uncle Sam’s credit card bill, which gets bigger the longer he waits to pay it. Indeed, the fiscal gap will likely grow by $1.5 trillion in the coming year.”
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“ . . . Inflicting pain of this type on current adults isn’t exactly PC. So what about dumping the entire $51 trillion bill in our kids’ laps? Well, that isn’t exactly moral. Nor is it feasible. We’d have to double our kids’ net tax rates (the share of their earnings they would pay to the government minus anything the government pays them back in benefits) compared to the rates we adults face. With fiscal burdens that high, our kids would stop working, evade taxes and leave the country.
Unfortunately, the dirty little secret underlying most Social Security privatization schemes is that they head precisely down this road. Take the second of the three plans developed by the President’s Commission to Strengthen Social Security. This plan, which the president is likely to endorse, pegs increases of Social Security benefits to price inflation rather than wage inflation. (Wages usually rise faster than prices overall, so this means benefits would rise more slowly.) It also lets workers invest some of their payroll taxes in private accounts.
The indexing wipes out a large and growing portion of the benefits promised to our kids. And the option to invest comes at a big penalty. According to the fine print, every dollar invested leads to a further loss of Social Security benefits equal to that dollar compounded at a 2 percent rate of return after inflation. If our kids invest in a safe manner, they’ll be lucky to earn 2 percent after inflation. Indeed, the current real yield on long-term inflation-protected U.S. Treasury bonds is less than 2 percent.
The investment option is no real option at all. It’s a side show to divert attention from the main point of the plan—wiping out most of our kids’ benefits and thereby raising their net taxes. Those who don’t invest will end up paying the same payroll taxes, but receive far less in benefits. And those who do invest will end up paying lower payroll taxes, but will suffer additional benefit losses that actually exceed the value of their payroll tax reduction.
Fixing Social Security is imperative. But doing so by eating our young is hardly the answer.”
Author: Larry Kotlikoff
SourcePosted by tubino
01/24/2005 at 12:45 AM
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