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Why Liberals Abhor Social Security Reform (pg. 3)
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| wolverine16 |
| quote: | Originally posted by Capitalizt
In the important field of security for our old people, it seems necessary to adopt three principles: First, noncontributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps 30 years to come, funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.--FDR in a message to congress. 1-17-35 |
This is what Brit Hume said that got him in hot water. FDR's grandson has been livid about it, because it's taken out of context. The old age pension plan he was saying should be supplanted is the "noncontributory pensions for those who are now too old to build up their own insurance", not the other 2 principles. What FDR meant was that the government was going to support those who were already retired when the program was first put in place and that future generations that would pay into the system would not have this. |
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| Capitalizt |
| Even if that were the case, it is clear FDR did not intend for this to be an immortal program. Even he saw that "voluntary contributory annuities" were the best long term solution, and this is precisely what the dems are fighting today. |
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| Lebezniatnikov |
The thing you've got to ask yourself is... who's benefiting? Nothing in Washington ever gets done if there's a 50-50 risk-reward possibility. Seriously, the only way a large amount of political steam could possibly be gathered behind this is if someone is going to come out of this ahead.
Coming immediately to mind... big business. As social security is privatized, the amount of money businesses and corporations have to pour into security plans for their employees drops out. If social security is privatized, in other words, companies will stand to gain immense amounts of money in benefits they no longer have to pay out.
Seriously, Bush is getting crazily attached to this plan. And I really think it has more to do with saving businesses money than giving people "choices"... something the Republican Party has rarely been wont to do. ie. choice of gay people to marry... mother's choice on abortions... etc. etc. |
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| Capitalizt |
Republicans are always pro choice on economics...authoritarian on social issues.
Democrats are always pro choise on social issues...authoritarian on economics. ;) |
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| wolverine16 |
| quote: | Originally posted by Capitalizt
Even if that were the case, it is clear FDR did not intend for this to be an immortal program. Even he saw that "voluntary contributory annuities" were the best long term solution, and this is precisely what the dems are fighting today. |
Link
The whole point is social security is not supposed to be where your retirement savings come from, FDR was advocating people having private retirement accounts and individual investments, but this is as people currently have it, totally seperate from social security. SS then is supposed to then supplement in addition to that to ensure Seniors have enough to stay over the poverty line. That does not suggest that he wanted to end SS, your quote from the letter suggests that he intended for future generations to be in the program, so it was not just meant for the time of the Great Depression.
I understand why many here are advocating the program's possiblity of a higher potential rate of return, the lack of it not addressing the solvency issue aside, but what about the possibility of having something like FDIC protection has for bank accounts in the case that money is lost or they outlive their earnings if this were to go into effect? Just an idea that might help bridge the gap between sides. |
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| wolverine16 |
| quote: | Originally posted by Capitalizt
Republicans are always pro choice on economics...authoritarian on social issues.
Democrats are always pro choise on social issues...authoritarian on economics. ;) |
With some exceptions, this is very true in the case of most controversial issues. |
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| Shakka |
| quote: | Originally posted by wolverine16
It's cool. I play lock. The new PS2 game just got releasedin America too! |
Cool. My boy was a prop, though he said he always wanted to be a jumper, but was too big. I remember driving him to the hospital after one of several concussions. |
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| MisterOpus1 |
| quote: | | Go Jayhawks,then! My Dores will be lucky to see any NCAA action this year. A real heartbreaker last night. |
Eh, KU got a 3 seed – but it’s in Okla City so we got a good break. You a G Tech fan? Glad to see they got in.
Anyways, I’ll admit right off that the details of stocks and mutual funds are not my strong point – course you knew that. So I’ll attempt to hit your points as best I can. I’ll say right off, however, that admittedly this particular argument against Bush’s privatization plan is probably the weakest argument (i.e. saying that Bush’s stocks will not return higher %). This really is the result of 2 underlying problems:
1. Bush hasn’t revealed about his plan – i.e. the details. We are therefore left to only speculate on the bits and pieces he has revealed.
2. There’s a real difference in philosophy on what Social Security really is to the Democrats (and the majority of the citizens according to all polls) vs. the privatizers supporting Bush’s plan.
To the majority of folks, SS is and always has been an insurance program set up as a safety net to keep the elderly, the widowed and their children, and the disabled out of poverty. To the privatizers, well actually I think they know this – however they’re attempting to spin it as an investment which doesn’t give a very good return.
Most folks don’t see it as a mere investment which could become “personal”, and the privatizers are trying very hard to spin it around. The problem, however, is that people are realizing that in order to turn it into privatization, a substantial cost (i.e. transition) will ensue, plus a severe reduction in benefits will occur, and then the risk of the stock market takes a foothold (i.e. winners and losers, downturns do occur which hurt everyone retiring at that given time). This isn’t appealing at all, which is why Bush is currently getting his ass handed to him not by the Democrats, but by the citizens themselves refusing to buy into his scheme. The ACTUAL problem that we face and must be addressed, IMO, is twofold
1. The deficit
2. The dwindling of solid retirement plans and pensions
I haven’t discussed #2 yet, but this really is a growing problem, one that hasn’t been addressed enough in this debate. Anyway, on to your points…
| quote: | | Wowzers--just like a mutual fund! Oh wait, that's right--Bush's plan would offer mutual funds to people, only my understanding is that the management fees on government sponsored funds would be significantly lower than that of the average mutual fund, which is typically in the 1-2% range. Hey, the people who manage, maintain, and keep the records for the accounts(they don't run themselves ya know) have to get paid. |
To be honest, I’m not sure exactly on the details. A significant part of the problem, of course, is that Bush himself has not revealed the details of his plan. To the credit of this liberal think tank, they did give a high AND a low estimate on the Management fee cost. I haven’t read the nitty gritty details of Plan 2 of the 2001 “President’s Commission to Strengthen Social Security” report, which by all accounts is what Bush is basing his privatization idea on. Is this where you are assuming the 1-2% range of those “Thrift Savings Plan” type funds? According to the CBO, they estimate the Administrative costs of the Thrift Savings Plan to be at around 5%, (See page 2 or Table 1-1 here):
http://www.cbo.gov/ftpdocs/52xx/doc5277/Report.pdf
not to mention the estimated cost of annuities which I’ll get to later.
| quote: | | In fact, in that statement alone, hasn't this liberal think tank essentially dressed up a sheep in wolves clothing? Notice that they're more interested in telling you how much money someone is going to make for managing your money than in telling you how much more you might potentially earn on your assets. |
Well I think the point of this passage was the mention the pitfalls of the costs or potential costs with privatization. So it’s not that they’re more “interested” in saying the pitfalls versus the potential gain – rather it is their INTENT to demonstrate the pitfalls only.
| quote: | | Furthermore, are they trying to say that there are no employees getting paid to work for the Social Security Office? |
Gotta admit you lost me on that question.
| quote: | | As far as the first part of this statement goes, they've basically said, and let me paraphrase, "Of all of the mutual funds that only had a 2% return, the average management fee was 1.09%". Well golly gee, funny they didn't mention the thousands of other funds out there that vastly different returns(bad or good). Seriously, alls I'm saying is that is a distinctly deceptive sentence. Furthermore, the latter part about the 23% reduction doesn't make a whole lot of sense to me, but of course, they've only posed a hypothetical based on a deceptive sentence, but I digress. |
Well they are attempting to compare apples to apples here. IOW – they’re comparing identical rate of returns between the current SS system and a mutual fund, and THEN compare the associated management fees with each. Now admittedly, having a mutual fund with a higher rate of return would obviously offset the management costs much better, but then we must also consider the higher rate of risk associated with higher rates of return. And we must also consider the considerable higher administrative costs with a mutual fund, which the CBO outlined in their report that I posted earlier (Table 1-1).
Besides, the argument of privatizers for higher rates of return is a bit misleading to begin with. This is a paper co-written by 3 authors, one is a pro-personal accounter, which takes this particular argument in detail:
http://www.cbpp.org/3-11-99socsec.htm
| quote: | | I dunno about this one. The writers admit that they have no idea how expensive it will be, and I imagine they then go on to give a "worst case scenario" sort of hypothetical. Sure there will be certain costs involved. If you want to make an omelette, you've got to break some eggs. I believe the theory is that if you can make a smooth transition, the long-term benefits(think generations to come) will far outweigh the upfront "load" to use a mutual fund term. |
Well I think this really is a crucial element of the argument altogether – the annuity costs. Another paper by the Century Foundation addresses the annuity argument in terms of inflation:
| quote: | Social Security privatization plans, including all three recommended by the President’s Commission to Strengthen Social Security, require retirees to convert the lump sums in their personal accounts into annuities that provide them with monthly payments until their deaths. The reason for that is that otherwise retirees could outlive their nest eggs, or even squander them, requiring taxpayers to bail them out. The market for annuities, which are financial contracts sold by insurance companies, is small now, with relatively few bought and sold. Such a market would probably develop under privatization, but it is unlikely that those annuity payments would increase in line with inflation, as today’s Social Security benefits do.23 Without inflation protection, the purchasing power of retirees’ pensions would fall precipitously during times when prices are rising rapidly. Because insurance companies would bear significant new risks for offering inflation protection, they would be likely to charge very substantial fees over and above the already steep 10 percent that they now charge.
-23. Greg Anrig and Bernard Wasow, “What Would Really Happen Under Social Security Privatization? Part III: Millionaires One and All?” The Century Foundation, New York, December 10, 2001, available online at http://www.socsec.org/publications
.asp?pubid=325.
http://www.socsec.org/publications.asp?pubid=503 |
Furthermore, I believe they are referring to the CEPR report when they state the “typical” costs of annuities. From the following passage they make the case that annuities usually cost an extra 10-20% of total savings:
| quote: | In addition, under Social Security workers automatically get an annuity (a life-long monthly payment) when they retire. By contrast, financial firms typically take 10 to 20 percent of workers' savings to provide an annuity when they reach retirement.
http://www.cepr.net/publications/fa...al_security.pdf |
I see no reason why we would assume annuity costs would be any different under Bush’s plan. Unless, of course, he actually decides to address the nitty-gritty details such as this, rather than continue to talk in generalities to a “yes”-man Town Hall crowd.
Digressing. Sorry.
| quote: | | Well, now we're into "Potential Fees". I could think of a ton of other potential fees. With nothing in concrete, have these guys considered the possibilty of a Plan 3 or 4, or even 8? There are plenty of ideas on the table, and plenty reason to believe that someone might think of an innovative alternative that hasn't been considered yet. Doesn't mean it's a bad idea. |
Well again if you’re going to beat someone up on this, I suggest you take it out on Bush himself since he refuses to give any true details on his plan. Again by all accounts his plan looks and acts like Plan 2 under his 2001 Strengthen SS Commission, so that’s exactly what we’re going on here. And under that plan, major benefit cuts must occur. And the higher returns on the privatization scheme will NOT offset the drastic cuts in benefits:
http://www.epinet.org/content.cfm/i...urityprivfaq#62
And that’s using some rosy numbers too, which they explain further below the graph.
The problem is the cuts in benefits, and Bush cannot get around this dilemma. Keep in mind that some 17 million folks who receive SS benefits are NOT retirees, but are either/or disabled, the widows and/or children. Slashing the benefits is going to really these people over.
There was an article in the WaPost that outlined the problem with Bush’s plan and slashing benefits:
| quote: | …under the proposal, workers who opt to invest in the new private accounts would lose a proportionate share of their guaranteed payment from Social Security plus interest. They should be able to recoup those lost benefits through their private accounts, as long as their investments realize a return greater than the 3 percent that the money would have made if it had stayed in the traditional plan.
That 3 percent level is the interest rate earned by Treasury bonds currently held by the Social Security system.
http://www.washingtonpost.com/ac2/w...anguage=printer |
Here’s the example they used:
| quote: | | If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars. All of that money would be the worker's upon retirement. But guaranteed benefits over the worker's lifetime would be reduced by approximately $78,700 -- the amount the worker would have contributed to Social Security but instead contributed to his private account, plus 3 percent interest above inflation. The remainder, $21,100, would be the increase in benefit the worker would receive over his lifetime above the level he would have received if he stayed in the traditional system. |
So they’ve got 3% reduction of benefits going against them should they opt for the privatization Plan2 idea Bush is pushing. The cut in benefits is very real:
| quote: | | Yes, but won't it also involve the phasing out of Old infrastructure over time? |
Absolutely not because Bush has said the Old infrastructure, i.e. old SS program is to remain intact. This new program is supplemental to the Old one. Hence the huge known costs (transition and long-term maintenance) and hypothetical costs (i.e. what we’re talking about now) of funding for both.
| quote: | Perhaps a new one would be less beaurocratic since it will be new. Perhaps it won't be as corrupt as some current government systems. Perhaps it will. Nobody can know. I admittedly do not want more or bigger government by any stretch, and this may just be a cleverly worded statement to create the illusion that this would create massively bigger governemtn. And perhaps not.
Certainly not on an individual basis, but in large volumes, you're still talking about a percentage of a pie, so does this argument really matter? Besides, I don't think a financial service company would have the option of turning them down. Either way, don't liberals like to see the "white collar financial services guy" struggle to make a living? |
Well again to be honest, I don’t know, but I’ll again refer to the Century Foundation’s paper for why exactly this could be problematic. They refer to a supervisor of the Thrift Savings Plan:
| quote: | Many workers’ accounts would be so small that they would be of no interest to profit-making firms. The average taxable earnings of a worker are roughly $25,000 (in 1997, the last year with complete data, the average taxable earnings of the workers who paid into the system were $22,400). Two percent of $25,000 comes to $500 per year. Francis X. Cavanaugh, who has supervised the thrift savings program for federal employees, a program that privatization advocates often point to as a model, has argued that the costs of administering so many small accounts would overwhelm any benefits to be gained from the stock market. For example, he estimates that the government would need to hire ten thousand highly trained workers just to oversee the accounts and answer questions from workers. In contrast, today’s Social Security has minimal administrative costs amounting to less than 1 percent of annual revenues.
http://www.socsec.org/publications.asp?pubid=503 |
Again I don’t know exactly how problematic this would be, and I do admit I am appealing to authority here a little bit. If anything I think this is a minor point to consider, at least for now. But if anyone, especially conservatives, do not want the government bigger than it already is at present, I think this argument should be at least slightly considered.
| quote: | | Business costs money to stay in business. If they could quantify it on an individual level, I bet it's really not that much, but admittedly I don't know. All they've said is that it will cost money to run the program. I don't know that it's clear yet how much of this kind of expense a company would have to eat and how much might be subsidized by Uncle Sam. |
Again I think this simply carries over from the previous argument – granted it is a bit hypothetical, though there is some weight to the argument. But let’s just think about it for a second – wouldn’t it be almost somewhat similar to the IRS, if you will, around tax time –except 365 days/year? People will be retiring everyday, of course, and they’re gonna need some personal advice on their investment.
This will definitely consume a great deal of time and $.
So the obvious questions are:
Who would pay for the $? The obvious answer, of course, is the taxpayer.
Who would pay for the manhours and crew helping out with financial advice? Would it not be the taxpayer again, since we are, in fact, dealing with a government-run program?
And I do think it is a bit misleading to lump it all together and state we can handle this in one cohesive unit, which is what we have now with the current SS system. Indeed, if Plan 2 were to take place, we’d have 5 different investment plans based on risk, which ultimately require more individual consulting, time, and $. I think the authors here are rightly arguing that this will ultimately cost the taxpayers AND the retirees/beneficiaries $.
Like the think tank said:
| quote: | | Administration officials have indicated that the government would manage new accounts and small accounts with balances under $5,000 because financial companies would not be interested. (Edmund Andrews, Wall Street Hears Pitch for Social Security Plan, in The New York Times, January 11, 2005). |
But granted, we are moving to the hypothetical.
| quote: | | I guess it's about what I expected. Try to present the worst possible outcome and let fear do the rest. |
Well I must respectfully disagree. Given what we know so far on Bush’s plan and what he is proposing, which is right in line with Plan 2, these estimates and problems are pretty much right on the money really, or so it seems.
| quote: | | Seriously, of course there are going to be costs in creating something like we're talking about. I doubt I like that fact anymore than the next person, but in the end I just think it's a really good idea that could really benefit us all significantly down the road. I would like to see something like it put in place, provided it is well thought out and properly managed. |
Just out of curiousity, how warm are you to the idea of a government retirement plan in addition to the current SS program, one that does not take money out of SS but could still be used as a retirement investment-like 401K/pension/etc.?
| quote: | | How's that for an Opus-like reply? |
Hehe, not too shabby! |
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| MisterOpus1 |
| quote: | Originally posted by Fir3start3r
Exactly.
It's a Ponzi scheme that quickly reaching it's end. |
It seems the online encyclopedia tends to disagree, as to I, with your assessment of the current SS system being a "Ponzi Scheme":
| quote: | Some have argued that many national social security systems, such as the Social Security system in the United States and the National insurance system in the United Kingdom, are actually large-scale Ponzi schemes. One example is conservative economist Thomas Sowell in his book, Applied Economics ISBN 0-465-08143-6.
Sowell and others point out that, under these national systems, incoming payments, made up of taxes and/or other kinds of non-voluntary contributions, are neither saved nor invested. Instead, current contributions are used to pay for current benefits, much like a Ponzi scheme.
Proponents of Social Security change in the U.S., such as Sowell, claim that this "pay-as-you-go" system has begun to show its inherent flaws as North American demographics trend toward more pensioners and fewer workers, because of declining birth rates and increasing life expectancy.
Retirement programs run by national governments, though they involve the taxes paid in by workers being redistributed to pensioners, nevertheless differ in a number of basic features that are usually found in Ponzi schemes, but are not fundamental to them:
*They promise a stipend to the country's retired persons, not the quick and exhorbitant profits that Ponzi schemes invariably offer.
*They rely on the taxing power of the state to ensure continuous funding, instead of fast talk alone. Theoretically, general tax revenues could be used to supplement worker payments into the systems, although, since historically in the U.S. Social Security has almost always been in surplus, many observers would view such measures as a collapse. Similarly, the political process could be, and has been, used to raise required contributions via retirement taxes, despite taxpayer protests. The same process could be used to reduce benefits, either across-the-board or just for the relatively more-well-off, despite opposition from those who will get less. Meanwhile, qualifications, such as the age of retirement, could be raised, although those who have to wait longer may not like it.
*They pay out an approximately equal amount to what was paid in, per contributer, plus interest. This advantage, however, is offset when pension surpluses are used to cover a government's current general-revenue shortfall, as has been happening in the United States since 2002. The practice, though not a Ponzi scheme, would be a prosecutable offense in the private sector. Meanwhile, proponents and opponents of reform debate whether contributions invested in private capital and equity markets would provide retirees with a better return.
*They are in many ways insurance rather than investment systems. A person who dies before retirement gets no money back (regardless of what he/she paid in). Someone who lives to a very old age continues to get payments regardless of the amount of money he/she has paid in.
*Unlike in a Ponzi scheme, government receipts (taxes) and payouts (entitlements) can be calculated quite accurately in the short term (five to ten years), and predicted (with a range of assumptions) for periods beyond that timeframe. A sudden collapse is therefore unlikely.
The U.S. Social Security Administration provides the following analysis of this "Ponzi scheme" charge as applied to a pay-as-you-go system like Social Security:
There is a superficial analogy between pyramid or Ponzi schemes and pay-as-you-go insurance programs in that in both money from later participants goes to pay the benefits of earlier participants. But that is where the similarity ends. A pay-as-you-go system can be visualized as a simple pipeline, with money from current contributors coming in the front end and money to current beneficiaries paid out the back end. So we could image that at any given time there might be, say, 40 million people receiving benefits at the back end of the pipeline; and as long as we had 40 million people paying taxes in the front end of the pipe, the program could be sustained forever. It does not require a doubling of participants every time a payment is made to a current beneficiary. (There does not have to be precisely the same number of workers and beneficiaries at a given time--there just needs to be a stable relationship between the two.) As long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out, the system can continue forever. There is no unsustainable progression driving the mechanism of a pay-as-you-go pension system and so it is not a pyramid or Ponzi scheme.
. . . .
If the demographics of the population were stable, then a pay-as-you-go system would not have demographically-driven financing ups and downs and no thoughtful person would be tempted to compare it to a Ponzi arrangement. However, since population demographics tend to rise and fall, the balance in pay-as-you-go systems tends to rise and fall as well. During periods when more new participants are entering the system than are receiving benefits there tends to be a surplus in funding (as in the early years of Social Security). During periods when beneficiaries are growing faster than new entrants (as will happen when the baby boomers retire), there tends to be a deficit. This vulnerability to demographic ups and downs is one of the problems with pay-as-you-go financing. But this problem has nothing to do with Ponzi schemes, or any other fraudulent form of financing, it is simply the nature of pay-as-you-go systems.
http://en.wikipedia.org/wiki/Ponzi_scheme |
Note that part about it being an insurance rather than an investment program.
| quote: | | Forcing people to actually take care of their own finances is not a bad thing |
Whoever said it was? What's wrong with having a better pension and 401K program right now, considering that it has dwindled down so drastically over the last 50 years or so?
| quote: | | in fact, according to credit statistics, the people could use the education since it's quite obvious there are a LOT of people out there that don't even know basic personal finance. |
Indeed:
| quote: | Moreover, a number of surveys show that most people lack the knowledge to make even basic decisions about investing. For example, a Securities and Exchange Commission report synthesizing surveys of investors found that only 14 percent knew the difference between a growth stock and an income stock, and just 38 percent understood that when interest rates rise, bond prices go down.11 Almost half of all investors believed incorrectly that diversification guarantees that their portfolios will not suffer if the market drops, and 40 percent thought that a mutual fund’s operating costs have no impact on the returns they receive.
-p.9
http://www.socsec.org/publications.asp?pubid=503 |
| quote: | | There's no way you'd ever convince me that the government will take of me in my 'golden' years. |
Who's trying to convince you of that? Don't you have your own personal investments outside of SS?
| quote: | | I realize I'm speaking on the other side of the fence but our system up here isn't that much better, hence I'm watching very intently... |
Understood. |
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| MisterOpus1 |
| quote: | | Even if that were the case, it is clear FDR did not intend for this to be an immortal program. Even he saw that "voluntary contributory annuities" were the best long term solution, and this is precisely what the dems are fighting today. |
Well he saw the voluntary contributory annuities as a supplement to the current program, not as a replacement, as was outlined above. Hume never retracted his distortion. Big shocker.
Edit Oops, just saw Wolverine addressed this link. Sorry. |
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| Shakka |
| quote: | Originally posted by MisterOpus1
Eh, KU got a 3 seed – but it’s in Okla City so we got a good break. You a G Tech fan? Glad to see they got in. |
Vandy actually. They didn't get in. They blew it...as usual.
| quote: |
"...gratuitously lengthy, well thought-out, non-argumentative counter-point |
I cannot concede that there aren't perfectly good points in there, and there are certainly plenty of reasons to be wary of any change. The bottom line generally is that when things change, somebody always gets ed in the ass.
I think the optionability(if you will) of this program and the guarantee of payouts to current and near-retirees attempts to at least circumvent a lot of the concerns(try to make the ass-ing less severe) to try and make it flexible on the front end. I just think it is a good "Big" idea at face value that should be extremely well thought out investigated to the full extent to see how best to implement it so as to minimize the aforementioned ass-ing.
If sucessfully pulled off, it will be a major legacy of the Bush administration and the Republican party-another reason that some on the left may not like the idea. Then again, it could go catastrophically wrong and be another that many historians will remeber as political follie. Only time and courage will truly tell.
| quote: | | Gotta admit you lost me on that question. |
I reached.
| quote: | | Just out of curiousity, how warm are you to the idea of a government retirement plan in addition to the current SS program, one that does not take money out of SS but could still be used as a retirement investment-like 401K/pension/etc.? |
This is where I'm supposed to say, "fine, as long as you don't take any more out of my paycheck in taxes!"
Forced savings is a good thing, IMO, provided that the person making the money has control over their assets and isn't taxed out the wazzoo. My general concern would be handing that much more of my paycheck to a government program puts more of my life in the their hands--and I am generally always going to be against that.
Perhaps that is why Bush's current idea appeals to me so much. The man refuses to add any taxes to fund the program. He doesn't want private citizens to hand over any more incremental amounts of their financial earnings. Putting more money into government hands only increases the power of the government. They can always just put that "Supplemental Account" in a "Lock Box" whenever they feel. For Bush, it's gotta be an option to the current system that doesn't cost anything additional to participate in, and it's got to be a private account. That way, if you die before your savings run dry, you can pass on your savings to your family instead of them being reabsorbed into the current Lock Box. People are going to remember "Ownership Society" if the administration can pull some of these ideas off. I am crossing my fingers. Anyway, I rambled way too far.
Just remember, "There are lies, there are damn lies and there are statistics.";) |
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| MisterOpus1 |
| quote: | Originally posted by Shakka
Vandy actually. They didn't get in. They blew it...as usual.
I cannot concede that there aren't perfectly good points in there, and there are certainly plenty of reasons to be wary of any change. The bottom line generally is that when things change, somebody always gets ed in the ass.
I think the optionability(if you will) of this program and the guarantee of payouts to current and near-retirees attempts to at least circumvent a lot of the concerns(try to make the ass-ing less severe) to try and make it flexible on the front end. I just think it is a good "Big" idea at face value that should be extremely well thought out investigated to the full extent to see how best to implement it so as to minimize the aforementioned ass-ing.
If sucessfully pulled off, it will be a major legacy of the Bush administration and the Republican party-another reason that some on the left may not like the idea. Then again, it could go catastrophically wrong and be another that many historians will remeber as political follie. Only time and courage will truly tell.
I reached.
This is where I'm supposed to say, "fine, as long as you don't take any more out of my paycheck in taxes!"
Forced savings is a good thing, IMO, provided that the person making the money has control over their assets and isn't taxed out the wazzoo. My general concern would be handing that much more of my paycheck to a government program puts more of my life in the their hands--and I am generally always going to be against that.
Perhaps that is why Bush's current idea appeals to me so much. The man refuses to add any taxes to fund the program. He doesn't want private citizens to hand over any more incremental amounts of their financial earnings. Putting more money into government hands only increases the power of the government. They can always just put that "Supplemental Account" in a "Lock Box" whenever they feel. For Bush, it's gotta be an option to the current system that doesn't cost anything additional to participate in, and it's got to be a private account. That way, if you die before your savings run dry, you can pass on your savings to your family instead of them being reabsorbed into the current Lock Box. People are going to remember "Ownership Society" if the administration can pull some of these ideas off. I am crossing my fingers. Anyway, I rambled way too far.
Just remember, "There are lies, there are damn lies and there are statistics.";) |
I understand your sentiments, and it's not like I really want a tax increase either. The trouble is I don't really see how we can't avoid a tax increase of some sort if we do go to the privatization plan - how else are we to cover the expenses of transition, let alone continue funding the Old system, as you put it?
Regardless, I think our debate is becoming a moot point. Bush's SS privatization plan is pretty much dead. Here's the latest Poll from the Wa. Post yesterday:
The numbers are going down, and concur with every other poll out there.
Worse, David Brooks chimes in. Although I don't agree with much of what he says, he does make a good point about how the Republicans misstepped with this issue:
| quote: | Republican blunders: Republicans often argue that Democrats are out of touch with mainstream Americans, but this time it was the Republicans who were trapped in the insulated world of their own think tanks.
Having skimmed decades of private-account proposals, Republicans did not appreciate how unfamiliar this idea would seem to many people. They didn't appreciate how beloved Social Security is, and how much they would have to show they love it, too, before voters would trust them to reform it. In their efforts to create a risk-taking, dynamic society, they didn't appreciate how many people, including conservatives, value security and safety.
Furthermore, Republicans didn't really have a strategy to get their proposals through Congress. They seemed to think that if the president held enough town hall meetings around the country, they could somehow bulldoze the Democrats.
A politically supple group would have done tax reform before Social Security reform. Tax reform is a less partisan issue, and might have set a precedent for compromise.
More experienced negotiators might have put the solvency issue before the personal-accounts issue. That would have created a consensus on the need for change before we got to the divisive issue of how to fix the system.
But Republican leaders have never really developed the skills required for cross-party horse-trading. Today's Republicans emerged in response to the ideological politics of the 1960's and were forged in the anti-political populism of the 1994 revolution. These anti-political creatures of conviction find sticking to orthodoxy easier than the art of compromise.
http://www.nytimes.com/2005/03/15/o...5brooks.html?th |
The financial service industry - the big supporters of the personal accounts are also starting to back off their support:
http://www.washingtonpost.com/wp-dy...-2005Mar14.html
And now the nail in the coffin:
The Nelson Amendment:
What's the nail? The 5 Republicans who signed it too - Collins, Snowe, Dewine, Specter, and Graham. They jumped ship and fast.
Who knows - this might come up again after '06. But for now, the Republican Senators and Congressmen are protecting their own interests by trying to get re-elected. |
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