A Forum for Grinches and Ho-Ho-Hoes

[Mmmm, Burger (C.J.)]

Originally posted by Gattigap


There are two legitimate issues out there: the eventual insolvency (decades out) of a guaranteed entitlement, and the country's low retirement savings rate. Bush wants to "solve" the second problem by drawing funds from and eliminating the entitlement, at least in part, and perhaps altogether. His proclimations about "saving" SocSec are, as far as I can tell, nonsense.

They're not nonsense, because he also has reforms that would help solvency, independent of privatization, no? E.g., reducing the growth rate of benefits. The problem is that as a political matter, one has to buy off the people who get screwed by reductions in out-year benefits with a different approach that allows them to keep those benefit levels, but only by taking a gamble on the markets.

That said, my biggest problem is this: I don't want to pay twice. Once to give people money to invest for their retirement. A second time when they fuck it up and we still have to give them something in retirement.

[sgtclub]

Originally posted by Gattigap
Because that's exactly what Bush wants. His Administration has been conflating the two issues from the beginning.

There are two legitimate issues out there: the eventual insolvency (decades out) of a guaranteed entitlement, and the country's low retirement savings rate. Bush wants to "solve" the second problem by drawing funds from and eliminating the entitlement, at least in part, and perhaps altogether. His proclimations about "saving" SocSec are, as far as I can tell, nonsense.

You may recall that private accounts were originally touted as THE WAY to solve the SS problem. Only recently has the Administration dropped that argument, in the face of unpleasant facts. Apparently, before the SOTU an administration official briefing conceded that private accounts are at best net neutral effect on SocSec finances.

Bush has said that raising payroll taxes are not an option, which means that benefits will have to be cut, perhaps significantly. Further, according to the Krugman article I linked to above, the logic of Bush-style Social Security privatization "is, in effect, as if your financial adviser told you that you wouldn't have enough money when you retire - but you shouldn't save more. Instead, you should borrow a lot of money, buy stocks and hope for capital gains."

I know that there are many Krugman detractors out there, so I'm willing to be convinced otherwise. If someone can show me counters to Krugman's argument that doesn't use Bush Administration talking points that have been later discarded, I'd appreciate it.

I think we can all agree that something has to be done to reform SS at some point in time. The basis of the debate is the when and the what.

As to the when, I find it refreshing that we have a pol that is willing to try to do something before it reaches a crisis point.

As to the what, I would like to see personal retirement accounts for a host of reasons, most of which have nothing to do with saving SS. But I'm not sure why a plan can't be crafted involving PRAs. If X% of your SS taxes was placed in a PRA, but your non PRA benefits were reduced by an amount equal to the amount placed in plus the amount of interest it would have gained under the old system, then assuming that the PRA appreciated at a greater rate than under the old system, there would be a net benefit to the system as a whole.

As for Krugman, many, such as Tom Maguire and the Truth Squad, have debunked his SS position and, IMHO, he has been outed as a dishonest partisan. This is not to say that there are not good legitimate arguments against private accounts.

[Tyrone Slothrop]

Originally posted by Hank Chinaski
You cite some prediction from 1935 that says in 2000 14% (whatever it was) of the population will be over 65. In fact in 2000 13.8% was over 65. To you that predicting the burden accurately.

If you care about the numbers, just go back to my original post to get them right:

"The actuaries predicted that the proportion of Americans over 65 -- then only 5.4 percent -- would rise to 12.65 percent in 1990, meaning that retiree costs would soar. They were just a tad high; the actual figure would be 12.49 percent."

For a fifty-year projection, that's not bad. But the bigger point is that Bush was telling people that Social Security has problems no one could have anticipated in the 1930s -- in fact, they did anticipate that people would live longer, and slightly overestimated the effect.

Then you list a bunch of other things they might not have predicted. Whatever. I think we all agree that Social Security needs to be tweaked to accommodate changed circumstances. I have no problem with telling people to work a little longer before they get benefits. But the fact remains that Bush has an ideological goal of ending Social Security, and to that end said something that wasn't true.

[Tyrone Slothrop]

Originally posted by Secret_Agent_Man
That statement by Bush seemed to me to be a non-substantive rhetorical flourish, and it doesn't really matter if the U.S. government foresaw or predicted these issues in 1936.

Talk about the bigotry of low expectations.

[Tyrone Slothrop]

Originally posted by sgtclub
As to the when, I find it refreshing that we have a pol that is willing to try to do something before it reaches a crisis point.

It would be more refreshing if Bush were aiming to do something to address the crisis, instead of making it worse. He wants to solve the problem of the projected insolvency in 2052 by borrowing trillions now. That cure is worse than the disease -- unless you think the problem is that we have Social Security at all. Since most Americans disagree, the Republicans who feel this way have had to resort to a flim-flam case for change.

[sgtclub]

Originally posted by Tyrone Slothrop
It would be more refreshing if Bush were aiming to do something to address the crisis, instead of making it worse. He wants to solve the problem of the projected insolvency in 2052 by borrowing trillions now. That cure is worse than the disease -- unless you think the problem is that we have Social Security at all. Since most Americans disagree, the Republicans who feel this way have had to resort to a flim-flam case for change.

He does want to end the crisis. You may quibble with the how, and that is a debate that would be beneficial to all of us.

[Greedy,Greedy,Greedy]

Originally posted by sgtclub
I think we can all agree that something has to be done to reform SS at some point in time.

No, I'm afraid not.

Something needs to be done to properly fund social security. The fundamentals, however, should remain in place.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy


Something needs to be done to properly fund social security.

That's not reform? (or the alternative, cutting the growth of future benefits?)

[sgtclub]

Originally posted by Greedy,Greedy,Greedy
No, I'm afraid not.

Something needs to be done to properly fund social security. The fundamentals, however, should remain in place.

And this, my commie friend, is why you will remain the minority party in the near future.

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
That's not reform? (or the alternative, cutting the growth of future benefits?)

I think of reform as meaning changing the basic rules of the system, not merely the funding mechanism.

Bush's goal is to rework the entire benefit structure, and thus to revise the goal and purposes of social security.

[Greedy,Greedy,Greedy]

Originally posted by sgtclub
And this, my commie friend, is why you will remain the minority party in the near future.

I suspect you will hear many voices in the red states agreeing with me, you rich coastal snob.

[sgtclub]

Originally posted by Greedy,Greedy,Greedy
you rich coastal snob.

I am undoubtedly coastal, and perhaps rich in a relative sense, but snob? How am I a snob?

[sgtclub]

FYI

[Not anymore. -- T.S.]

[Greedy,Greedy,Greedy]

Originally posted by sgtclub
I am undoubtedly coastal, and perhaps rich in a relative sense, but snob? How am I a snob?

You're rich and coastal, ergo....

I'll confess, I thought calling someone who supports social security a commie went out in the 30s, but you never know.

[Tyrone Slothrop]

Originally posted by sgtclub
He does want to end the crisis. You may quibble with the how, and that is a debate that would be beneficial to all of us.

If the crisis is that we're going to be short some money in 2052, how does borrowing trillions of dollars now help end the crisis?

Hint: It doesn't, and the White House's apparent recognition of that fact was the very point of the three paragraphs you posted yesterday from the LA Times.

eta:

The paragraphs immediately before the ones you quoted make this even more clear:

• A Bush aide, briefing reporters on the condition of anonymity, was more explicit, saying that the individual accounts would do nothing to solve the system's long-term financial problems.
  
  That candid analysis, although widely shared by economists, distressed some Republicans.
  
  "Oh, my God," one GOP political strategist said when he learned of the shift in rhetoric. "The White House has made a lot of Republicans walk the plank on this. Now it sounds as if they are sawing off the board."

LA Times, via Drum