A Forum for Grinches and Ho-Ho-Hoes

[Gattigap]

Originally posted by sgtclub
I think the opposition is purely ideological - the DEMs don't want to see an undoing of one of the pillars of the New Deal.

Again, don't automatically presume that people opposing catapults do so only because they have a vested interest in selling train tracks.

After all, at least some Dems voted for welfare reform, you may recall.

It seems to me that there is a lot of room to strike a deal here. Would you object to some combination of raising the minimum age and allowing self directed investment accounts for a portion of an individual' SS account?

I don't pretend to be an expert here, but my understanding is that even Bush's own Social Security Commission concluded that partial privatization just doesn't work.

• Who thought the Bush Social Security Commission would have such a pitiful demise? The whole point of the Commission -- which, improbably enough, had libs jittery and wingers giddy -- was to send up a privatization proposal which would have the wind in its sails, define reform as privatization, and perhaps even arrest Pat Moynihan's precipitous slide into mendacity, hackdom and irrelevance.
  
  Now the last of these three objectives was obviously a pipe dream. Number two was a tough proposition. But who would have thought they wouldn't even be able to manage number one? I mean, the whole cliche about presidential commissions is that their reports sit on library shelves collecting dust. Releasing not a report or a proposal but three different vague policy recommendations really charts new territory on the barren wasteland of commission fecklessness. No wonder privatizers in the media feel like they've been had.
  
  The denouement is pitiful but the reality behind it is instructive. For years, privatization opponents have insisted that when it came down to brass tacks, there was no way to hash out a partial privatization plan that actually worked. That is, it was impossible if you defined 'working' as a) insuring long-term solvency for the program, b) not requiring massive benefit cuts, c) not requiring sizeable tax increases, and d) not being based on bogus accounting.
  
  What happened is that when the Commission tried to do it they discovered that this was pretty much true.

[Tyrone Slothrop]

Originally posted by sgtclub
This is a now or later problem. It would cost between $1.5-2.0 trillion now, or up to $10 trillion later.

Hogwash. I note that you ignored the post where I pointed out that the White House's Social Security numbers are based on much less favorable predictions about productivity than they are otherwise making.

[Tyrone Slothrop]

Originally posted by Sidd Finch
Do people believe that the Fed will actually repay its debt to Social Security?

Or are Repubs finally ready to admit that Ronald Reagan is the biggest tax (the poor)-and-spend President of all time?

Of course they'll repay the bonds. They have to, because the Social Security "reform" that Bush has in mind depends on selling trillions of those bonds to the Chinese and Japanese, and that's not going to go so well if he's refusing to stand behind them. It's a talking point to snow people now.

[Hank Chinaski]

Originally posted by Tyrone Slothrop
Hogwash. I note that you ignored the post where I pointed out that the White House's Social Security numbers are based on much less favorable predictions about productivity than they are otherwise making.

Well the problem with privitization is there is no guarentee you won't lose it all, right? The very nature of a net to make sure you have something at the end of the day is contrary to letting it be something that you can blow. Is it okay if people make an informed decision to opt out so that they can invest, and they'r ejust screwed if they go belly up? No. They'll be living on my streets. That was the point in the first place.

you guys always miss the easy answer with your mile long blogs.

[Tyrone Slothrop]

Originally posted by sgtclub
This is a now or later problem. It would cost between $1.5-2.0 trillion now, or up to $10 trillion later.

$2 trillion now invested at a 5% rate of return will be worth about $19 trillion in 2050. So even if your numbers here are right -- and if the system is going to go broke in 2050, that's still not a $10 trillion problem in 2050 -- let's try fixing, say, the Bush deficits first.

[Tyrone Slothrop]

Originally posted by Hank Chinaski
you guys always miss the easy answer with your mile long blogs.

That's why I said in #645, that you're "ending Social Security if you don't have a guarantee at the bottom." Don't blame us for your reading comprehension problems.

[sgtclub]

Originally posted by Sidd Finch
Oh, piff. Dems don't want to see SS undone because it has worked extraordinarily well.

But given the demographics, it can't work indefinitely, and you have stated several times here that something has to be done. Maybe you don't like what you think the Bush proposal is (which, I repeat, has not been released yet), but I like the fact that he is willing to confront the problem.

Identify a Republican program that has achieved its desired goal for 60 years and is projected to achieve it for another 30.... and achieve 75% of its goal thereafter. SDI?

This is a bait and switch. Pure GOPers propose cutting programs, not enacting them.

When the undoing of the program will cost 4 trillion dollars (yes, I know -- Bush only wants to borrow 2 trillion or so, but what will the cost of that debt be?), and will not address the problems of the program, and may well give rise to new and worse problems.... well, I suppose that's merely an ideological response, right?

Again, I don't know how you know what Bush's program is if it hasn't been released. I'm in favor of upping the triggers for eligibility, which I understand would go a long way towards fixing the problem. I'm also in favor of self-directed accounts, not so much for the "fix" but because I believe that I should have control over how my money is invested (though I'm willing to settle for "safe" investments).

[Hank Chinaski]

Originally posted by Tyrone Slothrop
That's why I said in #645, that you're "ending Social Security if you don't have a guarantee at the bottom." Don't blame us for your reading comprehension problems.

Who can read all of it? This is why the big firms invented boilerplate.

[sgtclub]

Originally posted by Tyrone Slothrop
Raising the minimum age? Fine by me, but what are you going to give us for going along with that? I mean, what's the deal?

On the self-directed investment accounts, this is the rub. It's ending Social Security if you don't have a guarantee at the bottom. And how are you going to pay for it? It's making the problem you're pretending to solve worse.

I thought that at least some DEMs had supported raising the minimum age?

Why is it ending SS if it's only a portion of each individual's account?

[sgtclub]

Originally posted by Tyrone Slothrop
Hogwash. I note that you ignored the post where I pointed out that the White House's Social Security numbers are based on much less favorable predictions about productivity than they are otherwise making.

I think they should use the same projections. I don't know how that effects the projected costs that I haven't seen challenged anywhere. I'll grant Sidd that the interest costs would push the fix it now costs up higher, but the do nothing costs still are roughly $10 trillion.

efs

[sgtclub]

Originally posted by Tyrone Slothrop
let's try fixing, say, the Bush deficits first.

Fine by me.

[Tyrone Slothrop]

Originally posted by sgtclub
But given the demographics, it can't work indefinitely.....

• There is no Social Security crisis.
  
  Until very recently, I believed, as most of my generation still does, that Social Security was facing a crisis. Thanks to a declining birthrate and increasing longevity, at some point during my lifetime the program was going to go bankrupt and people my age were going to wind up with nothing after a lifetime of payroll taxes. I was -- and the bulk of young people still are -- the victim of a massive fraud, perpetrated by Social Security abolition advocates and unfortunately re-enforced from time to time by liberals seeking an argument against Republican tax cuts. This fraud, which is ongoing and in which a lazy media has been complicit, is crucial to understanding the politics of Social Security.
  
  Democrats charge the president with submitting a plan that will cut benefits and force people to rely on the vicissitudes of the stock market to ensure a dignified retirement. This is true. But if you believe that Social Security is currently headed for self-destruction, it's also irrelevant. Smaller benefits and an investment portfolio that may or may not pay off sound like an excellent deal compared with a pension plan that's going to go bankrupt. It is only if you try to see the truth -- that there is no crisis -- that criticisms of the Bush plan become compelling.
  
  Some Social Security proponents have been convinced by consultants that turning around young peoples' attitudes on this question is impossible. It is possible, and if the program is to be saved, it must be done. For if Social Security is not eliminated in 2005, its enemies will simply try again later. Over time, the older Americans who are currently the bulwark against privatization will die off and be replaced by the younger, pro-privatization bulwark. Saving Social Security means at least getting started on the work of changing people's minds. It shouldn't be that hard to do.
  
  Social Security is healthy and successful. There is no crisis. The president and the Republicans in Congress are trying to scare the American people in order to destroy the most successful program in American history -- a program that presidents from Franklin Delano Roosevelt to Harry Truman to Richard Nixon to Ronald Reagan to Bill Clinton have been committed to preserving.
  
  George W. Bush wants to break Social Security's bipartisan promise to the American people, and now he's making up stories to try to persuade voters to go along with it. These scare stories are based on a pessimistic assessment of the country's potential for future economic growth, an assessment the president does not embrace in any other context. Nor is it an assessment that he should embrace. Instead, we should be working to ensure robust future growth by improving America's health care, education system, and basic infrastructure while devising policies that make it easier for couples to have and raise children and remaining open to immigration from the rest of the world.
  
  But even if the president's pessimism about America's potential proves warranted, his scare stories are not. As this chart clearly demonstrates, even if we do absolutely nothing to change the system or prevent economic growth from slowing, Social Security checks will never stop flowing, and benefit levels will always be higher than what today's retirees enjoy. The Social Security pessimists have been proven wrong again and again in the past, and even under their "doomsday" scenario, the system can continue to exist in its present form while still providing a decent benefit to all.
  
  Young people, though supposedly immune to the liberal message on retirement security, are, in fact, going to be the biggest victims of the Bush plan. The president proposes to offer us a guaranteed cut in benefits and $2 trillion in debt, plus the possible burden of supporting our parents if the stock market underperforms, in order to forestall the mere possibility that benefit growth may have to be curtailed sometime in the 2040s. This is, when stated clearly, a horrible deal for Generation Y, and liberals need to have some confidence in our ability to make our case.
  
  Advocates of eliminating Social Security argue that this is wrong and that the program holds no "real assets" instead of "mere IOUs." These IOUs, however, are U.S. Treasury bonds, considered far and wide to be the safest investment in the world. In times of grave national crisis, from the Revolutionary War to World War II, the federal government has financed its activities be issuing these bonds -- and they've always been repaid.
  
  The president has chosen to finance a series of tax cuts for people earning more than $100,000 a year by selling these bonds to the central banks of China and Japan, and to Social Security. Now he says that he doesn't want to pay back what he's borrowed from my generation's retirement fund. That's just wrong. Worse, what kind of message does it send to the Chinese and others that Bush plans to offer an additional $2 trillion in bonds when the U.S. government takes the position that these are just IOUs that don't need to be repaid?
  
  Faced with current projections, the responsible thing to do is to close the massive hole in the government's non-Social Security budget while thinking of ways to prevent the dramatic slowdown in economic growth that forms the basis of the president's doomsday scenario. Instead, Bush wants to tell scary stories to young people in the hope that we'll panic and abandon our support for the most successful, and most fiscally sound, program our government runs today.
  
  Matthew Yglesias is a Prospect staff writer.

This is a bait and switch. Pure GOPers propose cutting programs, not enacting them.

I guess we need a new name for the ruling party we've got.

[Tyrone Slothrop]

Originally posted by sgtclub
I think they should use the same projections. I don't know how that effects the projected costs that I haven't seen challenged anywhere. I'll grant Sidd that the interest costs would push the fix it now costs up higher, but the do nothing costs still are roughly $10 trillion.

$10 trillion when? I'd rather have 2$ trillion now than $10 trillion in 2050. Wouldn't you?

[Hank Chinaski]

Originally posted by Tyrone Slothrop
$10 trillion when? I'd rather have 2$ trillion now than $10 trillion in 2050. Wouldn't you?

Because you could invest it, and make lots more?

[Tyrone Slothrop]

Originally posted by Hank Chinaski
Because you could invest it, and make lots more?

I think I'd just pay down my debts. It doesn't make sense to invest and have to pay taxes on the profits when I already owe so much.