Post-FoxNews Conservative Media Bias Strikes Again
 

you started by saying the anti-Daschle blogs should have carried a disclaimer. then you admitted any blog is on its face biased, so no disclaimer is necessary. you've lost. I'm just mopping up at this point.
Hank 79-11

Post-FoxNews Conservative Media Bias Strikes Again
 

Why? Does this somehow magically make the armor actually there?

smoke & mirrors
 

Yes, but that doesn't mean it has to be.

Yup. And the biggest obsticle I see to a transition is the totall cowardice of our leadership to admit that while privatization might be good, it will also be costly. And I don't think it is a huge a problem as you think (but it get huger every day).

These people are predicting, at best, substantially reduced market returns (or, in other words, they are being highly conservative). That makes more sense to me that saying that even these super-conservative estimates are way too positive, which seems to be what you are saying (i.e. the better guess is that things will be largely the same, rather than radically different).

Again, this is what we are talking about. One need not think the demographic factors are going to substantially hurt the larger economy in order to think it might be a good idea to privatize (note: the historical stock market return is something around 11%).

Or because, having watched what has happened to private pension plans (the near complete replacement of defined benefit with defined contribution, with much larger retiree resources) over the last 30 years, they believe that actually setting aside funds to pay future benefits, and earning a return (any return) on them makes for better off retired people.

What I don't get is the dogmatic democratic committment to the current system. I certainly don't believe that social security should be removed as a safety net. But I absolutely believe that people would be better off, and the system would be more sustainable, if people were investing the funds instead of loaning them to the government to pay for current expenses.

Post-FoxNews Conservative Media Bias Strikes Again
 

That's how you describe people who, unlike you (at least at the moment), have be guts to volunteer and sign up? You call them "people who thought they were beating the system?" Very patriotic.

Ad(they gave one hell of a lot more than me (and probably you), and voluntarily)der

Post-FoxNews Conservative Media Bias Strikes Again
 

Your second sentence makes no sense. And I'm sorry about your plumbing problems.

smoke & mirrors
 

No, but it means that "privatization" isn't really a reform of what we're doing now -- it's completely different, apart from the "private" aspect, in that individuals are saving for themselves instead of paying for the retirement of others.

It's a much bigger cost than the shortfall Social Security is expected to face down the road, although of course that depends on how much revenue is diverted.

Drum's posts suggest that they are hardy being super-conservative, so that's where we appear to differ. And that 11% figure is only for certain periods, I think. Read Drum's posts. How do you explain stock market returns over time that outpace economic growth by so much?

This is the promise of privatization: Everyone's investment grows faster than the economy as a whole! It's like Lake Wobegone -- we'll all be above average.

Well, no kidding. I'm certainly doing that for my retirement. But then who's paying for our parents' retirement? Because the social compact we inherited, borne of the Great Depression, is that we pay for current retirees, and anothe generation will pay for us.

[/QUOTE]
What I don't get is the dogmatic democratic committment to the current system. I certainly don't believe that social security should be removed as a safety net. But I absolutely believe that people would be better off, and the system would be more sustainable, if people were investing the funds instead of loaning them to the government to pay for current expenses. [/QUOTE]

It's not a loan.

We inherited this obligation to our parents. No one is suggesting that we shirk the duty. So the question, in essence, is whether the government should borrow a lot of money now to invest in the stock market. It's hard to believe that so-called "conservatives" want to do this, but there it is.

Post-FoxNews Conservative Media Bias Strikes Again
 

You mean residential, or have you been talking to my wife?

Post-FoxNews Conservative Media Bias Strikes Again
 

She said she always makes you do the mopping. That's so sweet.

smoke & mirrors
 

Yup.


Yup.

You mean, acccepting your assumption as true, how can I disagree?

And the 11% (10.4, to be precise) number is the S&P since 1926.

I am too lazy to google it right now, but what has the annual growth in GDP been over that period?

Because we made a mistake then, and chose the more expensive and less sustainable system means we should be continually wed to it?

In your own words, its a Ponzi scheme. Isn't that reason enough to change it?

smoke & mirrors
 

You don't have to accept my assumption, but since I'm talking about a pair of Drum posts that you apparently haven't bothered to read, why not read them and respond to what they say?

And why 1926 as a starting point? And what about the observation in his posts about PE ratios?

In the midst of the Great Depression, one can see why the idea of betting government money on the stock market seemed like a bad idea. Would you explain to me why you think markets can be expected to outpace the growth of the economy as a whole over time?

I don't object to changing Social Security. For example, people live much longer now than they did back then. But that doesn't mean we should incur massive deficits to bet government money on the stock market.

people who see the world like Ty does
 

Until now, I thought you were just obssessed.

smoke & mirrors
 

Because it was the first number I found, and it was suitably long ago to capture the very worst years of stock returns. Would you prefer that I begin after the Depression?


A PE ratio is essentially a meaningless number. To the extent that it should be relied on at all, it is a useful shorthand whether a give stock is over or under valued in the market.

But it should surprise no one that PE ratios are higher than ever in times when there is more money than ever invested in stocks (i.e. people will pay more for scarce commodities). Indeed, this phenomenon alone suggests that stock prices (and returns) can increase faster than GDP growth (i.e. they already have).

As for the Drum posts, to the extent that they even oppose privatization, they argue only that Social Security may not really need to be fixed. Which is something you and I are not discussing. (in other words, don't take anything I am saying to be specifically support the President's or anyone else's, plan)

Further, Drum says, "However, lower population growth means lower GDP growth. No way around that," which I am not sure is true.


Yup. Totally understandable mistake, but that doesn't mean it wasn't a mistake.

people who see the world like Ty does
 

his records show you have a small cavity in your top left canine, and that was 34 years ago.

Post-FoxNews Conservative Media Bias Strikes Again
 

That's pretty low coming from a patent lawyer sitting on a well-padded rear in a Detroit-area office building.

S_A_M

Post-FoxNews Conservative Media Bias Strikes Again
 

One- I'm buff.
Two- what I was referring to was people in the National guard complaining because they had to spend time in the National guard.

I fully sympathize about armor or whatever, but people complaining that the National guard actually required them to put in time after they had been paid for years, for the off chance they might do time? I'm cool with what I said.

Nice
 

Post-FoxNews Conservative Media Bias Strikes Again
 

People who say that never are.
If you get to make up what people are saying, its easy to come up with clever putdowns.

S_A_M

Post-FoxNews Conservative Media Bias Strikes Again
 

Huh? We give Ty plenty of leash on the first part of that, and he still doesn't come through on the second part.

With all the dirt coming out about Kerik now,* I feel a lot better knowing that the guy who vetted him is going to be the next Attorney General.

* If you don't know what I'm talking about and think it's just about this nanny, check out the coverage in Newsweek and Newsday, as discussed by Josh.

You're aware the Bush administration is sucessfully performing combat surgery daily in Iraq, right? You've got to start giving up some credit.

Sure. Props to Bush for amputating the finger but losing the ring.

That said, holy shit. I felt bad for Kerik at first assuming it was just a nanny problem. Now I simply feel, ah, bad.

Can we give the vetting job to someone who might only miss one big problem instead of about a half-dozen of them?

smoke & mirrors
 

Adder has my proxy on this one, apparently, but - the simple answer is that the stock market isn't the economy as a whole. It would be surprising if the stock markets didn't grow faster than the general economy, because it makes sense that people with excess capital to invest would choose invest it in the more efficient segments of the economy.
I'm suggesting it. Fuck my parents. Compared to me, compared to our entire generation, they're rich bastards, with their pensions and their medicare. Fuck 'em. Why should the working poor - even the working sort-of-rich like us - continue to subsidize what is now the richest segment of the population? (If the money was actually going to the poor and assetless who are no longer able to work, that would be an entirely different story. But by and large, it isn't.)

And, in case you missed the memo - no other generation is gonna pay for us, boyo. Someone is getting the shaft in this mess, someone is paying twice, and, frankly, I think I've already paid out quite enough for others to get a benefit I'm never gonna see.

BR(leading the charge in the inter-generational wars to come)C

smoke & mirrors
 

True or not, that has nothing to do with privatization and only to do with current (and future) benefit levels.

The biggest problem with privatization seems not to have been confronted by its advocates: What do you do with the people who manage their SS accounts poorly, and end up destitute? Tax the then-current workers to support them? SS principal benefit is that it avoids having a bunch of penniless oldsters begging for help. Why get rid of that?

smoke & mirrors
 

Yes, I don't disagree. My point -- or Drum's, which I'm repeating -- is that since the projection that Social Security is troubled depends on a projected slowing of the economy based on demographic changes, it doesn't make any sense to sell privatization as if market returns will mirror what we've seen lately. If the economy is going to slow, it's going to slow.

Well, if George Bush had the courage of his convictions -- or yours -- he might propose what you support, instead of suggesting that we run huge deficits. Deficits that, unless you are much older than me, you and I will be paying down for quite some time after Bush has retired to Crawford.

What Burger said. If the "problem" is that we're all living longer, let's tweak the system accordingly.

Kerik
 

The White House says it knew about and was untroubled by all of the troubles that Kerik had apart from his supposed nanny woes:

• They seem to be stipulating to their knowing about and being untroubled by a) Kerik's long-standing ties to an allegedly mobbed-up Jersey construction company (see yesterday's piece in the Daily News and tomorrow's in the Times), sub-a) that Kerik received numerous unreported cash gifts from Lawrence Ray, an executive at said Jersey construction company (Ray was later indicted along with Edward Garafola, Sammy "The Bull" Gravano's brother-in-law, and Daniel Persico, nephew of Colombo Family Godfather Carmine "The Snake" Persico and others on unrelated federal charges tied to what the Daily News called a "$40 million, mob-run, pump-and-dump stock swindle." b) that Riker's Island prison became a hotbed of political corruption and cronyism on his watch, c) that he is accused by nine employees of the hospital he worked at providing security in Saudi Arabia of using his policing powers to pursue the personal agenda of his immediate boss, d) that a warrant for his arrest (albeit in a civil case) was issued in New Jersey as recently as six years ago, e) that as recently as last week he was forced to testify in a civil suit in a case covering the period in which he was New York City correction commissioner, in which the plaintiff, "former deputy warden Eric DeRavin III contends Kerik kept him from getting promoted because he had reprimanded the woman [Kerik was allegedly having an affair with], Correction Officer Jeanette Pinero," or f) his rapid and unexplained departure from Baghdad.

TPM. Golly, I'd love to reproduce all the links, but it's just too much work. Odd that if this all is untroubling, the nanny thing is big trouble, but I guess that's just how D.C. is, eh? But the story the media would really have been eating up -- except for the "liberal" NYT, which can't be bothered -- if Kerik's nomination had gone forward is this one:

• A couple days ago we noted the odd story, reported by Newsweek, of how glamorous celebrity book publisher Judith Regan had to hire a bodyguard to protect her from Kerik after their relationship "soured."
  
  Now, Newsweek said that the two were "occasional workout partners." But clearly I'm way behind the times on the latest euphemisms. Because these weren't the sort of workouts you do at the gym, or, I should say, at least not in the public areas. The Daily News reports today that not only was Kerik carrying on an affair with Regan but also, at the same time, with city Correction Officer Jeanette Pinero. Pinero, you'll remember from yesterday evening's post, is the woman at the center of the civil suit in which Kerik had to testify just a couple days ago. The plaintiff in that case former deputy warden Eric DeRavin III says Kerik kept him from getting promoted because he had reprimanded Pinero. (The Daily News reports that the city has already ready settled one case related to the Kerik-Pinero relationship.)
  
  And since Kerik was married while all this was going, he had a secret love den set up down in Battery Park City where he'd meet Regan and Pinero for their workouts.
  
  And that, it seems, was how he eventually came to grief. According to the Daily News, after one workout Regan left a "romantic note" for Kerik. But, as so often seems to happen in these cases, it was found by, you guessed it, Mrs. Pinero (yes, she's married too).
  
  Pinero and Regan chatted on the phone; and presumably things were never quite the same.
  
  The Battery Park love shack saga would also seem to throw a little light on one question left dangling from yesterday's story in the Daily News.
  
  In that piece, Lawrence Ray, Kerik's financial benefactor with all the mob connections, said that "Kerik always complained about surviving on his civil servant salary." That, notwithstanding the fact that a December 1997 piece in the Times reported that Kerik's starting salary as Corrections chief was $136,990 a year.
  
  But now the story comes into clearer focus because not only was Kerik paying for the place on E. 79th street where he and his wife lived. He was also paying through the nose for the love den down in Battery Park which the Daily News estimates cost between $3,150 to $6,200 in monthly rent.
  
  With those sorts of expenses, no wonder he had to rely on Ray to pay off some of his bills.

Heh. Busy guy.

smoke & mirrors
 

Sort of. It has to do with privatization in that I/we, effectively, are already on the privatized retirement system, and I/we are the ones bearing the double-cost, and it might be nice for the G to figure out some better way of smoothing the double-cost problem over more generations than the one that will be getting ready to retire just as the boomers bankrupt the whole system, which will be ours.
Some of them do just gloss it over, but I think a lot of privatization advocates have actually tried, with various schemes, to address that. A number of them posit that a residual, basic, means-tested, public safety net will exist, which might be (correctly) called "welfare," and a lot of critics (willfully?) fail to realize that that, too, is part of those plans to overhaul SS.

And it's not just people who fuck up their accounts, of course - my real concern is for the people who don't and won't earn enough to have any realistic shot of saving & investing enough to retire on even if they're perfectly invested in a 40-year long tech boom. Those are the people this system really should be protecting, not rich fuckers sitting on their asses by golf courses in FL whining about what free benefits they "deserve." (Hell, even under the current system bad management happens - I know some pretty high-income pre-Boomers who have suddenly realized that they're 65 and haven't saved a cent and will have to work until they die. I have almost no fucking sympathy for them at all, and eagerly await their verdict on whether cat food really does taste like pate.) In any event, whether SS is reformed/replaced by privatization or otherwise, I would absolutely support retaining some form of true hardship safety net, though one would have to address the negative incentives it might create (lower savings, more risky investment).

We are agreed. More people should run on the "pull the plug on the old rich bastards sucking the lifeblood out of the rest of us" ticket. I miss Dick Lamm.

BR(forming a nice subtext for my next vampire movie script - Chronos already sort of covered it, and likely better than I would, unfortunately; I'd go more overt political statement as high camp a la "They Live")C

smoke & mirrors
 

I don't necessarily disagree with what you say, but I still fail to see how privatization solves those problems.

If SS goes too much to the rich, cut the benefits at the top end, or means test, or tax (this despite promised made to the generation).

If all we want is a safety net, create that. Lower taxes adn benefits, and promise a much lower benefit that's right at the poverty line.

Privatization does not mean no savings. It means forced savings without a gov't guarantee. If you're going to force people to save--that is pay for their own retirement--you might as well make sure it will be paid for no matter how incapable they are.

Why are Republicans agitating to "fix" Social Security when their other policies are causing much more severe budget problems?

DUDE!
 

DUDE! Link to it!

Sorry -- it wasn't nearly that big when I pasted the url into my Address line. -- T.S.

Jesus, Ty. I understand that the point is important and all, but the only part of it I can read on one screen is "Curr...

smoke & mirrors
 

It doesn't, necessarily, except in the assumption (reasonably sound but by no means certain, which is a clear problem) that private investment of the funds currently being deducted from people's paychecks will, on average, earn better effective returns than the SS taxes the G will be able to wrest from the then-available-worker tax base in the future.

The first problem is the gap - someone will have to pay twice, paying both for current retirees' bens and then again for their own retirement. But privatization doesn't create that problem - it will happen anyway, because of the huge chunk of people who will be retiring soon and have been promised the moon, but who haven't paid enough surplus into the system over their working lives to draw down, and don't have enough workers coming behind them to support, the benefits they claim to have been "promised." Privatization is just one of a number of mooted schemes to manage the problem. I have no strong opinion on whether it is the best one that has been suggested, but it is more realistic than most.

Right now, the group that will bear the brunt of that inevitable gap is probably us (those colloquially know as X-ers and Y-ers), simply because demographically the boomers may well be able to demand extra funds from us for their own benefit, sucking the funds out of the system so there isn't a cushion left for us when our turn comes, and having taxed us much more heavily and therefore reduced the amount we have been able to save ourselves (I love the idea of a massive Gen X/Y tax revolt, but sadly I don't think it is likely). Most privatization schemes (and most "individual SS account" schemes, whether they propose investing those individual account funds in the private sector or not) attempt to shift some of that burden off of us and onto boomers (and pre-boomers, if they live long enough) in a politically manageable way, by (i) pulling some of our retirement tax money out of the pot going to older generations during our remaining working life and applying it toward our own future retirement (i.e.: protecting a portion of our income from current retirees and preserving it for our own retirement) and (ii) putting a good face on reducing the benefits to those older generations, which presumably have not have saved as if they expected it (the "putting a good face on it" part is calling it "reform" rather "benefit reduction," which obviously would be just as (or more) effective but politically untenable). Since those age groups are, on average, a lot wealthier than our age group, this seems to me like a decent and reasonably equitable idea to try to work from.

Then comes the problem of dealing with the members of those unprepared groups who are not, in fact, relatively wealthy, and dealing with the members of future generations who will not, in fact, save enough in a private system to retire on (either through bad luck or because they just never earned enough).
I advocate both of those measures, with or without private retirement accounts or other SS "reform" measures.
Yes. Not sure what you mean, but if you mean "guarantee a liveable minimum amount so no one will starve to death or freeze in their tenament because their account took a bad hit on a sure-thing Nigerian investment when they were 66," I agree, though I think it should be rigorously means tested (requiring the liquidation of assets before sucking off the public teat).

Of course, I note that I think SS payments should be rigorously means tested right now. I also note that I have never claimed to be remotely mainstream or moderate in my views on SS.

That graph really should be bigger.

Seriously, because SS can be projected out quite a bit further, and the blue bars will be a lot more negative than the red bars by 2033 and beyond.

I think they're talking about 2042, but the date really depends on a bunch of economic assumptions, so it's not like anyone knows. Notably, that date keeps moving backwards:

http://www.washingtonmonthly.com/blo...Bankruptcy.gif

Meanwhile, Republicans in government don't seem to mind the massive deficits they're running now, so one should be properly skeptical of the idea that we need to do something pronto about the threat of massive deficits four decades from now.

Ever clean the house and wax the car when you had a really hard research paper due the next day? its kinda like that.

Of course not, because with lower taxes we'll grow our way out of the current deficit. No such trick for SS.

Maybe you've noticed, but you ever see those articles about how we're sending 55 year olds to Iraq with the Guard? Well, problem solved.

I don't know which is worse: That the ruling party spouts this crap, or that many of them believe it.

smoke & mirrors
 

If parents are indeed "rich", then they have investments, SS will not be something they need to survive, but something that supplements their income. This money would presumably be saved now and inherited later or given to people of our generation as gifts, so its trickling down anyway. Besides, no matter how you slice it, it is their money. They earned it. If they want to use it to buy a gold wheelchair, hey, thats their gig. Its not public money.

And pensions are not synonymous with wealth. many lower middle class folks have pensions.

All that said, I do agree with the premise that pensions are absurd. Why govt employees should get them early and with fantastic lifetime perks is beyond me. Pension obligations have totally fucked up a lot of companies. They're almost like CEO compensation - there's just no reason for so much of it.

The story I saw today was about a retired 70-year-old man recalled to the Army to serve in Afghanistan. I was hoping it was part of a secret plan to build a case to reform Social Security benefits.

See, it's things like this that feed my sneaking suspicion that the seemingly contradictory and scatterbrained Bush Administration policies are really just part of an integrated whole, the outlines of which are only now becoming clear.

By the end of Bush's second term, for example, I expect we'll discover that the skills learned by the personnel at Gitmo really just laid the groundwork for subsequently overcoming the funding challenges of No Child Left Behind.