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Credit card companies opened the 30 percent interest casino – inviting high risk debtors – in the mathematical expectation that they would make more money on 30 percenters than they ever will on “straight” credit card holders – and they found out they were right.
The author of “The Two Income Trap spent all day giving a seminar to Citibank on how to cut its mortgage default rate in half – only to be told after all: “We have no intention of not making loans to those people; we make money on those people.”
If American finance wants to leave behind the old world of conservative loan practices to cash in on the higher risk arena – bless their sophisticated foresight – but the law of the land need not be pressed into service to reel in even more loans that went bad in the
lenders’ chosen high-fast game.
Posted by Denis Drew on Mar 10, 2005 at 10:01 AM
If this were an American phenomenon, then I’d understand the belief that the attack on social security can be stopped. However, the equivalent of Social security is under attack in dozens of countries all over the world, by governments of the right and the left. The welfare state is being systematically dismantled globally.
Since the beginning of the year, several hundred thousand people have demonstrated in Russia against government measures aimed at dismantling the existing benefits available to retired people, the sick, or certain state employees. The state will no longer provide free basic medicine and medical treatment, public transport or reductions in the price of phone calls or rents. In Germany, the period in which you can get unemployment pay has been cut from 36 months to 18 for the over 55s and to 12 for the rest; this at a time when unemployment has risen above 5 million (13%).
In Holland and Poland the governments are taking similar measures, following in the wake of the French and Austrian governments who, in 2003, ‘reformed’ the system of pension payments, adding several years to people’s working lives. The French government continues with its attacks on social protection, while the British government also intends to force more and more categories of workers to carry on toiling until they are 65 or even 70. In all the industrialised countries the welfare state is on the verge of collapse.
These governments have NO CHOICE, because it is CAPITALISM that is bankrupt. The economic crisis is laying bare all the contradictions of capitalism, and revealing the impossibility of finding a solution to them. Too many commodities are being produced; the world market is glutted. The bourgeoisie’s need to make profits in order to avoid bankruptcy is increasing rivalries between the main industrial countries. The result is an open economic war where the prize is to grab the markets from your rivals. This in turn leads to the desperate search to lower production costs. The only way to do this is to attack the working class. On the one hand the bourgeoisie is trying to raise productivity through speed-ups and increasing the flexibility of the labour force, so that it can get away with employing as few workers as possible. On the other hand it is carrying out a vast programme of ‘reforms’ – i.e. attacks on the social wage: pensions, unemployment benefits, medical benefits, sick pay, and so on. NO section of the working class is being spared – older or younger generation, at work or on the dole, public sector or private sector. The consequence of these attacks is a general degradation of living and working conditions for the whole international working class. The ferocious exploitation imposed on the workers leads to a general decline in health at the very time it becomes more difficult to get medical assistance; workers who have looked forward to a period of rest after years of wage slavery see these hopes threatened by the retirement age being raised and pension payments being lowered; younger workers face the problem of precarious employment, going from one job to the next with wage levels always being pulled downwards, all this interspersed by periods of unemployment on reduced benefits. Finding accommodation and putting something away for retirement becomes increasingly difficult.
The attacks are not going to stop there - they are going to get worse. It is a GLOBAL phenomenon. This is why the working class has to become aware that the system is indeed bankrupt and that the solution lies not in reforms, or a change of government, but in a change in the very basis of society.
Posted by Maximillian Al Dakari on Mar 10, 2005 at 12:37 PM
“In normal periods, stocks average 3.7 percent annual returns over the long run, only 0.7 percent more on average than returns in the current system.”
I don’t know where this “data” came from, but it is wrong. Stocks average about 11% growth per year and have for over a century (see Stocks for the Long Run or any economic text). This amounts to about 7-8% after inflation,
Allowing people to handle THEIR OWN MONEY makes about as much sense as allowing them to OWN THEIR OWN HOUSES - and we all know what a failure that was! :)
Posted by facts on Mar 10, 2005 at 1:23 PM
That is a very dire outlook, probably true. I also see that this is becoming a global situation.
I have posted numerous times on the Social Security issue and I have expressed concern with my state senators and district congressman. I don’t think the will of the people is being considered. The Bush agenda is being steamrolled, and I hope Congress won’t roll over and die on this. What is with this bottomless well of greed? Political propaganda is beating on Social Security mercilessly with lies, lies, and more lies.
Perhaps economies need to change before a collapse, but right now we are being driven into debt by the most fiscally irresponsible U.S. administration ever. It’s not too late to take a nose dive over the cliff if Congress would develop a backbone and serve the people instead of the fattest wallets.
Posted by pick of the litter on Mar 10, 2005 at 1:38 PM
Apologies folks; I seem to have patched in the wrong response with my credit card bit reply to the S.S. privatization story.
:-] <sheepish grin
I MEANT TO SAY that privatization requires the gov to overextend by borrowing (even more?) trillions, thereby taking a chance we CANNOT afford on causing the entire economy to melt down—all for the sake of lending money to buy stocks to folks who CAN afford to take the chance on their retirement precisely because they are otherwise so securely situated finacially.
Denis Drew
Posted by Denis Drew on Mar 10, 2005 at 1:50 PM
The argument that this is a global phenomenon is only partially true. Yes, they fought in Russia for their benefits and, in large part, they won. The government backed off and made the cuts less drastic.
Also, I heard an interview on BBC the other day in which some financial experts were saying that current pending legislation in Parliament is actually attempting to redirect the British retirement system to be more like our current social security. He said that Britain has had a scheme like the one Bush is proposing for some time, and it has been an utter failure. He stated that polls in England show most people want to go to our system as they have, for the most part, not done well with the “Bush” type system. Shouldn’t that tell us something?
Posted by Margaret on Mar 10, 2005 at 2:01 PM
it is very difficult to sort truth from fiction in the usa as well as any place in the world > i read on-line media from all over the world daily and find it fascinating that on-site reporting can be so radically different, so different that all to often it seems as if different events are being described > it does not take rocket science to see there exists an extreme dichotomy between the “haves” and the “have-nots” > every political system has bush types that are in essence just plain greedy and stupid > democracy as we have known it is not a system that works - even the primrose path is quickly coming to an end > salvation of the world possibly thru a benevalent dictatorship will be required > it is long past time for a world-wide grass roots effort without boundaries between countries, people, religions or social dynamics > time is running out pretty quick, maybe a hair quicker than is the fossil fuel but it is already too late by far to mitigate global warming
Posted by james r cummins, orchardist/farmer on Mar 10, 2005 at 7:05 PM
‘Facts’ Why don’t we just allocate everyone their own tank or jet fighter. Then they could get on with defending there own little bit of the country. We could share out the tools so that everyone gets a chance to repair the highways. We could also dismantle public education and have everyone tutoring their own kinds at home. Then we could give everyone fire extinguishers which would enable us to get rid of the fire department. That way no one would have to pay any tax.
Are you seriously going to argue that individuals do not know what’s best for their kids education, their local highway system, and are not the best people to DEFEND THEIR OWN HOMES in times of conflict or emergency?
I mean there is no such thing as society anyway, and the only legitimate law is the law of the jungle. Isn’t that right ‘facts’?
Posted by Matilda Gatsby on Mar 11, 2005 at 12:23 AM
Matilda,
I am not sure whether you’re being sarcastic or you really mean what you’ve written. Please clarify.
Posted by Margaret on Mar 11, 2005 at 10:10 AM
While I do not agree that the Social Security system needs the kind of fixing that Bush et al envision, it’s important to see the whole story. Facts is right when he points out that the rate of return on the stock market over time is not 3.7 percent, but closer to 7.5% discounting inflation. That’s a pretty substantial difference, especially compounded over some 30-40 years. It’s understandable why the 35 and under crowd would like that option. What Facts neglects to note is that the 1-2 TRILLION dollars pricetag to fund such a transfer would inevitably eat up whatever additional earnings the average retiree would receive in the form of higher taxes and/or reduced benefits. And that’s just the tip of the iceberg. What about the drag on the economy all the additional debt will cause? Higher interest rates, a depressed dollar (it’s pretty depressed already), tightening corporate profits, fewer jobs, etc. It’s a surefire recipe for economic disaster. Facts may be right that in a perfect world it would be good if we had some control over our Social Security monies before we retire, but this is not a perfect world. The price for that control is too high. There are better solutions.
Posted by tomkins on Mar 11, 2005 at 1:31 PM
dipping my toes in the water > sarcasm is, i think, usually a waste of time/energy and rarely effective > commentary on this forum (unlike many other forums) comes from people whom as a rule are much less in a state of denial than the “norm” as well as generally more intelligent but commentary seems mostly to be just that ....... commentary > it has been clear to me for many years that this planet is on it’s way downhill and with it civilization as we know it as well as a multitude of plant/animal species and on & on & on ......... blah, blah, blah ......... also, clear as our star, that radical re-orientation of humanities posits is long overdue and, in fact, it’s just plain to late > regardless of other’s good intentions methodolgy that will work is rarely verbalized and yet the hardware exists (constantly improving digital technology — www) > i advocate that it is long past time for “one earth - one people” > i am unaware of any political system that currently would have the mindset to implement and maintain the social dynamics necessary to succeed > example: 1) the United Nations has had many years to develop and bring to maturation a system whereby earth species could thrive, survive and continue evolving, instead the UN is a thoroughly corrupt political entity as well as the complete dichotomy of 2) Slow Foods (a far from perfect entity) which is a grass-roots league of nations (yes, i did attend Terra Madre where over 5000 mostly agriculturists/farmers representing over 100 countries/cultures were able to not only thrive and complete an agenda and leave feeling good and full of hope) > Reality? mass American denial? “what is our oil doing under their sand”? > i could go on and on but the essence of my previous post reflects my current understanding of what will be necessary if there is to be our children’s children’s children > other paths are folly .........
Posted by james r cummins, orchardist/farmer on Mar 11, 2005 at 2:52 PM
Here’s a great essay from the Future of Freedom Foundation (fff.org):
Government’s Social Security Mess
by Sheldon Richman, March 11, 2005
It’s hard to say how the debate over Social Security will turn out. Considering that the system rests on the three-legged stool of the welfare state — coercion, deception, and paternalism — it’s hard to see a case for anything but abolition and the individual right to control one’s own income. But in thinking about a way out of the mess, it is worth taking time to understand how we got into it.
And it is a mess. Government investment on behalf of future retirees is like the tooth fairy, the Easter Bunny, and Santa Claus. It never existed. As a result, in about a dozen years, when the payroll tax can’t cover benefits, the government, to keep its promises, will substantially raise taxes on workers and/or begin borrowing huge amounts of money, consuming capital that would have raised our living standard. The government could reduce other spending, but that will be difficult because all government spending is backed by well-organized interest groups who do not cotton to proposed cuts. However, the political wizards may try to get away with trimming the benefits of future retirees or changing the retirement age. Whatever solution the politicians adopt is bound to harm large groups of people and stunt economic growth.
If we take a step back, we can see that only government could have brought us to this lamentable condition. We have Franklin Roosevelt and his New Deal to thank. It didn’t have to be. Indeed, no private organization could have gotten away with it. There’s a lesson here that is not being learned: government produces nothing, and so it was a mistake to think it could provide retirement income constructively. It got away with moving money around for several decades, but, like a chain letter, the scheme had to end.
How did it happen? According to economic historian Charlotte Twight, in 1935 Roosevelt exploited the American people’s concern about the elderly whose savings had been wiped out in the (government-caused) Great Depression. Americans supported emergency “public assistance,” but opposed a permanent government pension plan. It smelled of socialism, and Americans were still too individualistic to be comfortable with Prussian-style “social security.” So Roosevelt and his congressional water-carriers hitched Social Security to a “public assistance” bill. Whenever anyone suggested a separate vote on the two programs, Roosevelt opposed it. When the New Dealers talked publicly about Social Security, they dishonestly portrayed it as an insurance or pension program. It passed and grew over the years, turning most retirees into wards of the state.
Despite the references to insurance and pensions, Social Security has been run like a confidence game. It taxes workers and promises to provide retirement income to them later. Then it hands the money to current retirees as it plans to tax the next working generation to keep the promises it made to the current one. No money is invested, so there is no new production and no true return. In the early 1980s the politicians decided to collect more money than is needed for retirees so the surplus could cover other government spending and make budgets deficits appear smaller than they really were. The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.
All of this has come to a head lately because the big baby-boom generation will soon start retiring, the elderly are living longer, and relatively few workers will be around to support them. To sustain the system, the burden of government will grow.
Hence, the big mess. It takes a government to come up with something so tragically idiotic. The opportunistic politicians who saddled us with it thought that in the long run we’d all be dead. Well, they are. But the long run is now here. And so are we — to suffer the consequences.
-Sheldon Richman is senior fellow at The Future of Freedom Foundation, author of Tethered Citizens: Time to Repeal the Welfare State, and editor of The Freeman magazine.
Posted by Stephen Marsh on Mar 13, 2005 at 2:36 AM
It’s funny how one reader (Stephen) can look at an essay and classify it as great, while another (me) can read it and classify it as garbage. I read the above essay and just see a bunch of topic sentences strewn haphazardly about, totally devoid of any supporting sentences.
Take for instance the last sentence in the 3rd to last paragraph which reads “The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.” Nowhere in the essay do I see any supporting evidence for this statement. Why is the SS Trust Fund a lie? How do we know that people would otherwise have invested this money for later years? Which people? All people? I’m afraid I’ll have to call Bullshit there. I know lots of people who wouldn’t have invested the money for later years. I bet you do too.
The essay itself does nothing but criticize Social Security. It doesn’t provide any idea as to what would have been a better solution to the overwhelming problem of senior poverty after The Depression, or what to do about the supposed crisis now. Nothing.
Yet Stephen sees greatness in the essay. I guess there is just no accounting for taste.
Posted by Matt Harris on Mar 13, 2005 at 5:53 PM
Margaret, sorry about the late reply but yes, I was being sarcastic. Well, pointing out absurd ironies in the conservative position anyway. The fact that this was not immediately apparent worries me little bit.
Posted by Matilda Gatsby on Mar 13, 2005 at 9:29 PM
You’re right, Matt. The article was not great. Greatness can be found in the thinking of Ludwig von Mises, Murray Rothbard, and a few others. Free audio downloads are available at mises.org.
I would like to point out three facts that the establishment does not want you to know:
1. The Federal Reserve was created using a blueprint drawn up by a cabal of top bankers. (Can anyone on this page argue that they were acting in the public interest?)
2. The depression occurred after the creation of the Federal Reserve (coincidence?).
3. Since the creation of the Fed, the dollar has lost over 98% of its value. Compare this to the complete absence of inflation before its creation. Is this not theft?
Posted by Stephen Marsh on Mar 13, 2005 at 11:35 PM
I understand that each President has a desire to leave office with something that they have accomplished. Unfortunately Bush’s plan for Social Security will not have for him the desired effect. The fact that he is dismantling a system that has been in place and working for one that is bound to fail miserable proves that where he is concerned, once again arrogance rules the day.
Posted by Robin Meade on Mar 14, 2005 at 7:04 AM
Can anyone say they were truly surprised by this?Bush’s administration has done whatever it could to favor the interests of big business over the people.
I find this new development interesting,however.I didn’t think the re-party had the audacity to tamper with something like Social Security.After all,Ronald Reagan,god of the re-party,never had the temerity as he feared the political ramififcations.
Unfortunately,our citizens are once again being told The Big Lie and once again believing it.The sad thing is even if the Democrats win in 2008 and manage to fix this awful mess(with the re-partisans kibitzing and kvetching the whole time),the crooks who’ve engineered this scheme will still make their millions and retire some where they casn’t be touched.
Re-partisans are big believers in the cult of tradition-the good old days.I used to think they meant the 1950’s.Now I see they meant the 1920’s.
You can fool too many of the people too much of the time.
-James Thurber
Posted by wwoods on Mar 14, 2005 at 7:27 AM
Guest Commentary in “BusinessWeek” magazine 03-07-05 p.39-40
“Private Accounts: Right Idea, Wrong Time—-Why a longtime advocate isn’t backing Bush’s plan”
by Paul Craig Roberts, a former Assistant Treasury Secretary in the Reagan Administration
” A privatization scheme launched early in President Ronald Reagan’s first term would have had a 20-year financial market boom to underwrite the shift. The 1980s and 1990s were also periods of strong employment growth, which would have helped generate the payroll revenues needed to fund the transition. The U.S. had not amassed the massive trade deficits that now undermine its capacity to issue trillions of dollars in new debt, and it had not launched a costly war in the Middle East.”
“Strike One against Bush’s plan is the inability of the weakening dollar to carry the debt burden required to finance the transition to privatization. Foreigners are drowning in dollars. With the U.S. economy in relative decline, they have no appetite for additional trillions of dollars. The greenback has weakened
so much that it’s on the verge of losing status as a reserve currency.”
“Strike Two is the lack of domestic savings that would fund this shift. The U.S. personal savings rate is practically nonexistent, and the government budget is awash in red ink. Offshore production, job outsourcing, and the proliferation of H-1b and L-1 work visas for foreign professionals have brought a halt to the growth in the high-value-added, high-productivity jobs that permits household saving.”
I’ve posted this before. Bush sure talks a big game about Social Security but has yet to put forth a public proposal which can be fairly debated. The U.S. faces a the largest deficit ever, now is not the time to get even more in debt.
I am beginning to believe the conspiracy theory that George W. and his cronies are out to bankrupt the government.
Posted by pick of the litter on Mar 14, 2005 at 8:02 AM
Bankrupting the federal government would be a pretty good idea as a way of making a transition back to a confederate government like before the constitution was written and all we had was the Bill of Rights.
Speaking of the Constitution, Patrick Henry, upon hearing that plans were afoot to write a constitution, is quoted as having said, “I smell a rat.” I’ll bet you didn’t know that. I only learned it recently. Apparently they don’t teach that in the establishment schools.
If only they would dispose of all the bombs in a safe place instead of dropping them on innocent people.
Posted by Stephen Marsh on Mar 14, 2005 at 8:40 AM
You are not alone pick of the litter. This plan to privatize Social security is so wrong, for so many reasons, it should never have made it past some junior, junior manager’s desk at Treasury. And I’m being generous at that. Bush et al know it will bankrupt the government (as Paul Craig Roberts ably illustrates above), yet here we are. It does make you wonder why Bush and many of the re-party are pushing for it so hard. Am I missing something? It’s self-defeating, even for (especially for, eventually) the financial institutions it would help in the near-term. I realize that not everyone sees things the same way, but the rational behind this one simply escapes me.
Posted by tomkins on Mar 14, 2005 at 8:59 AM
Not everyone thinks that’s a good idea Stephen. Anyone who looks at the repercussions can see that. For starters, the dollar plunges, which triggers a world-wide Depression, which leads to social chaos, which leads to a series of wars to divert our attention, and on and on. Do the ends always justify the means? Because that’s what you are arguing…
Posted by tomkins on Mar 14, 2005 at 9:10 AM
I’m not so sure that this is about feathering the nests of those who support the GOP. I say that because the proposed “solutions” to the supposed “problems”, don’t align at all. In addition, many big Wall Street brokers gave as much to Democrats as the did to the GOP.
I think this is all about a once-in-a-lifetime shot at dismantling a key component of the New Deal. The GOP needs to launch a full-scale assault on Social Security this year, as many GOP members need to stand for re-election next year and they don’t want a bunch of pissed-off senior citizens interrupting their fund-raising rallies next year with questions from Grandpa Jones about how he is going to pay for his hemmorhoid medicine and his cat food without a Social Security check. It can be very unseemly to have to tell Grandpa to piss off and get a job as a greeter at Wal-Mart, just so Bush’s CEO pals won’t have to have that 6.2% deduction taken out of their first one or two pay stubs in a year. (Why can’t grandpa just go away and die, like the GOP wants????)
These right-wing nutjobs, like the hygienically challenged Grover Norquist, believe govenrnment should be small enough to “drown in a bathtub”, to use a hideously graphic rhetorical formulation that Mr. Norquist is fond of. Except of course for the military, where it is apparently O.K. to piss several billion dollars down our collective legs every month with not a damn thing to show for it.
These wingnuts want to eviscerate liberal social programs and they don’t give a flying BEEP about the human consequences of their actions. Maybe we should ask them if the 20% of all Social Security recipients for whom Social Security is their only source of income, can come and live with them after privitization??!?!??
Posted by Stephen Kriz on Mar 14, 2005 at 11:30 AM
Stephen - todays retirees are NOT affected by any SS proposal currently on the table. They should sit on the sidelines and let those affected decide their own fates.
It is fascinating to note that while elderly people are strongly against SS reform, the age group 20-40 is strongly in favor of reform. Given that the reforms will actually affect the latter group, it makes sense that they should have the say so in what happens. . .
Posted by tommy on Mar 14, 2005 at 11:43 AM
Tommy - you are right, folks 20-40 should have a major say in the issue. And if there were no or minimal repercussions for switching to private accounts, you would definitely have my ear. But that is not at all the case. The Bush plan at present will cost you, me, our families, our friends, our kids, our grandkids, etc., 1-2 trillion dollars to fund in transition costs. Monies the government cannot afford to add to the already considerable national debt. It will tank the economy for the forseeable future and will cost us far more in the form of higher interest rates, fewer jobs, etc. than any of us in the 20-40 year-old bracket (or any age bracket for that matter) would stand to gain from the switch.
Regardless of your thoughts regarding the social effects such legislation would have, surely the economic ones should grab your attention. Adding a trillion or more dollars of debt to a relatively weak economy is foolhardy at best. I just do not see an upside here.
Posted by tomkins on Mar 14, 2005 at 12:23 PM
tommy:
Better read a little more, tommy. People who will be retiring soon will be affected by Dumbya’s proposed reforms. As current workers contributions are bled off to fund these private accounts, some reduction in benefits will have to occur.
Younger workers (you said 20 to 40 year olds) may be more naive or more susceptible to propaganda or both. You also need to read about how younger employees will be required to borrow from the plan to fund an annuity to support their retirement and then pay it back with interest. It’s a screw job, don’t kid yourself. This is the most dishonest Administration in American history. Look, their fearless leader has the longest rap sheet of any president in American history. In short, he is a criminal.
The Democrats do have a plan for Social Security, it’s called Social Security and it works the way it is supposed to. Lifting the $90k cap on income subject the tax would make it solvent forever. Democrats also have plans for “private accounts” - they are called 401(k)s and IRAs. Check into them!
Posted by Stephen Kriz on Mar 14, 2005 at 12:30 PM
Matt,
Stephen, like all other republican voters, is unable to recognize a false premise when he sees one. Rather, he is lead by a device (usually racial or religious bigotry, or some other vestigial, primitive remnant of the human instinct for tribalism) which renders them unable but to readily accept the false premise as truth. The exponents of the republican noise machine (Limbaugh, Hannity, etc.) are masters of the false premise, and if you pay close attention, you will find that they are unable make a single point that isn’t founded on a false premise, express or implied. In the case of this article, they are both.
Stephen and his ilk are victims to be pitied. He is, in all likelyhood, uneducable on this point.
Posted by Lefty on Mar 15, 2005 at 2:11 PM
“Stephen, like all other republican voters, is unable to recognize a false premise when he sees one.”
How easy it is to stereotype half the country! No need to worry or think about the complexities of how people decide what to think, how they gather information and process it. All one need know is that the “other” is a “republican” (or that they *might* be).
Hate and bigotry are alive and thriving! But there is good news - one can disavow such forces in ones own life. Whether they be on the left or the right or anywhere in between. . .
B.
Posted by BruceAlmighty on Mar 15, 2005 at 2:49 PM
Nah Bruce, Lefty is just pissed off that our President is able to lie blatantly to us and half the country seems to not care about that. While he/she may have been generalizing just a bit (90% of Republicans might be a more accurate assessment) his/her point is that Republicans have decided to drink the Kool Aid at the expense of the lives of our young servicemen and servicewoman, and now apparently at the expense of the elderly and those who will be at some point.
Though Lefty may hate some in the country for their despicably willful ignorance (as do I), your implication of bigotry is at best disingenuous. Sell your bullshit elsewhere. We’re not buyin’ it here.
Posted by Matt Harris on Mar 15, 2005 at 8:08 PM
I buy it!
Posted by Phil Zweir on Mar 16, 2005 at 6:48 AM
Matt - no need for you to “buy” anything. You have made up your mind - it must be nice for you to divide the US into “us” and “them”. Of course, the “them” faction is foolish or evil. Yeah, that’s it; no rutther thought needed there.
By the way, since you say “we” are not buying it i am curious. Are you the official spokesperson for ITT or the whole liberal community? :)
(Matt, you might want to stop reading here.)
More thoughtful readers will realize that both sides have pluses and minuses. And, of course, both sides have honorable champions. In reality, given human limitations, it can only be said we are doing the best we can. . .
Posted by BruceAlmighty on Mar 16, 2005 at 7:06 AM
To answer your question I am the official spokesperson of Matt Harris. Perhaps I used the wrong pro-noun. Maybe I’ve been watching too much of el Dumbidente.
Oops I didn’t stop reading there. I sure hope that this is not the best we can do and IMO most thoughtful readers would hope for better also. In fact, it seems to me, that we are doing about as poorly as we can do right now. And therein lies the source of my vitriol, which admittedly was overflowing last night. I know I can do better and I’m not afraid to admit it.
Have a good day.
Posted by Matt Harris on Mar 16, 2005 at 10:48 AM
http://www.buckfush.com/
Posted by brian on Mar 16, 2005 at 8:20 PM
The attack on Social Security reminds me of a baseball game between the All Stars and a farm league team made up of widows, orphans, disabled veterans, and the chronically ill. When the All Stars have run the score and get bored, they start beating the farm league players with baseball bats. The crowd goes wild!
Okay, maybe the All Stars aren’t as mean as that, but why is no one taking into account that cheap oil has funded the stock market gains of the past 70 years, and it is extremely unlikely to do so in the next 70? Don’t we have any responsibility to take care of each other, come what may?
Posted by Sian_Llewelyn on Mar 17, 2005 at 1:48 PM
Some municipalities have already begun the transition from SS to personal accounts.
“In 1981 officials in Galveston, a seafront city on the Gulf of Mexico opted out of Social Security along with neighboring Brazoria and Matagorda Counties and chose instead to plunge their county governments into the unknown territory of offering private retirement accounts.”
Full story in link below. Overall, it seems to be an improvement. . .
http://www.nytimes.com/2005/03/18/national/18texas.html
Posted by Thomas on Mar 18, 2005 at 11:25 AM
Again, I guess beauty is in the eye of the beholder. I read the article you linked and would say there appears to be a divergent mix of reviews. For instance this from the article:
“Critics contend that employees with higher incomes do much better than those with lower incomes and that over time the fact that the returns are not indexed for inflation make them a worse deal than Social Security.
A study in 1999 by the Social Security Administration, for instance, found that after 20 years of retirement, all of the plan’s benefits, even for wealthier retirees, would be lower relative to Social Security.”
Not exactly a glowing endorsement.
Posted by Matt Harris on Mar 19, 2005 at 12:35 PM
Can I pick on Matt too?
>>Take for instance the last sentence in the 3rd to last paragraph which reads “The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.” Nowhere in the essay do I see any supporting evidence for this statement.
<snip>
Why would you need supporting evidence that spending excess SS funds (taxes) into general revenues to support current obligations; rather than investing the excess into a multi-trillion dollar fund(s) which would enable returns for future retirees to offset the increased baby boomer projected needs; is not squandering the investment/trust?
Is that how you handle your retirement funds? Spend them this year and give yourself an I.O.U.?
Ron
Posted by Ron on Mar 25, 2005 at 5:01 PM
The forcasts are that in 2042 (or 2052 if you believe the CBO which is much more likely right) S.S. will need 33% more revenue to cover a finally filled out retiree population. Working pop to grow FASTER than retiree pop after 2050 according to the CBO aging population chart (which lately only goes up to 2040—can’t imagine why 2050 disappeared off the web site).
All of which means the outside limit of the problem can be solved by at the worst raising the payroll tax by one-third at a time when average income should have more than doubled!
The only rub is that payroll tax has been paying a little too much to “subsidize” income tax programs—so it is only right to ask income tax payers to put out a little more to pay back payroll tax.
By the time 2042-52 rolls around income tax payers would be very used to paying that little more real money to pay real benefits—nobody will notice or care if the I.O.U.s to ourselves run out.
Bottom line average income will double by then. Real rub is whether the USA gets union organized enough so that the average wage earner is not earning less by then! (Legislation being the answer to the latter.)
Posted by Denis Drew on Mar 25, 2005 at 6:34 PM
“Can I pick on Matt too?”
Have at it Ron, but you may want to re-read my post and the essay I was critiquing so you can do a real job of it next time.
“Why would you need supporting evidence that spending excess SS funds (taxes) into general revenues to support current obligations; rather than investing the excess into a multi-trillion dollar fund(s) which would enable returns for future retirees to offset the increased baby boomer projected needs; is not squandering the investment/trust?”
Nowhere in the essay that I critiqued was there any mention of investing excess funds into a multi-trillion dollar fund (an Al Gore style lock-box if you will) that would enable returns for future retirees. The author simply said, as I posted “people would otherwise have invested for their later years” in speaking of the funds had they never gone into the system. This is quite a different argument than you make above.
“Is that how you handle your retirement funds? Spend them this year and give yourself an I.O.U.?”
No and no. I have personal retirement accounts called 401k’s and IRA’s. Perhaps you’ve heard of them. If not, check ‘em out, they’re pretty cool.
Posted by Matt Harris on Mar 25, 2005 at 10:19 PM
With all the vituperation and misinformation in the attacks on Bush’s plan what we have yet to see is an argument that the system does not need to be fixed or, better, an alternative plan for fixing it. As is the wont of the rabid progressive, the analysis here is long on speculation about motivations and short on facts specific policy recommendations. Bush is right; something needs to be done, a fact known since the 1980’s. The Democrats punted during all the time they controlled the Congress and/or the White House, so Bush is taking a first step: proposing something. But the best the left can come up with in response is whining and ad hominem attacks. No ideas.
Posted by Mitch on Mar 27, 2005 at 9:25 AM
Ad hominem,is that a new catch phrase?....2 >TRILLION< $ in transfer costs.How much of a return on our investment of 4% do we need to see before we make up for that? Do I get to choose how I invest this money? Or am I forced to enroll only in various government sponsered accounts? This whole thing stinks to high heaven! From what I’ve read about this,it’s a BLATENT attempt to syphon off a large amount of money to people who have way too much of the stuff already! Bush has consistently chosen to benefit his base,(the rich and powerful) at the expence of the rest of us.And we just let it happen.Hell,some of us line up for the chance to bend over and take it.It boggles the mind.From what I understand, it would take a relatively small increase in the maximum amount that can be taken out in SS taxes.But that would only affect the wealthy.So Bush flat out says he won’t consider it. Instead, he proposes a ‘solution’ that would take 2 >TRILLION<$ out of our pockets.Isn’t there something wrong with that,or is it just me?
Posted by whats the truth? on Mar 27, 2005 at 7:07 PM
Actually, “ad hominem” is an old catch phrase. And you continue to prove my point. There is not a suggestion in your posting, beyond the misinformation that a “relatively small increase” (current discussion is somewhere between 33% to 50%, hardly small) in the income cap would fix the problem [But since the syste (if we are to preserve it) gives you more the more you pay, those figures are probably inaccurate]. Nor is there any analysis your digital wailing, just a series of questions and the gnashing of teeth that passes for argument among Bush’s critics.
Posted by Mitch on Mar 27, 2005 at 8:42 PM
“With all the vituperation and misinformation in the attacks on Bush’s plan what we have yet to see is an argument that the system does not need to be fixed…”
Actually the next plan that your boy Bush comes up with will be his first. All we’ve heard so far is some blathering about Private/Personal/Big Brokerage Company Accounts and that all other options are “on thuh table”. Kinda hard to make a counter-proposal without an initial proposal. But hey, I’ll take a shot here. Either you increase funding or decrease benefits cuz those are the only things that would solve any kind of funding problem.
Apparently it is exactly this kind of simple logic that evades your boy (see record Federal Budget Deficits). But hey, let’s go ahead and make those tax cuts for the rich permanent. I mean why should anyone have to sacrifice for Rumsfeld’s ill-advised war besides the troops and our kids who’ll be left with the bill.
Come to think of it I’ll be quite happy if the Dems do the smart thing and become a true Opposition Party on SS “reform” and just say no. Kind of like I wouldn’t let the doctor who screwed up my wife’s breast cancer surgery do a preventitive mastectomy on my daughter, why would we let Doc (Quack) Bush do preventitive surgery on SS? The more Quack Bush is lameduck, the less Quack Bush can upphuck.
Posted by Matt Harris on Mar 29, 2005 at 9:22 PM
Did you read about the 3 US citizens who were kicked out of one of Bush’s taxpayer funded seminars on Social Security privatization because of a bumper sticker on their car that said “No Blood for Oil”?! See the story here:
http://www.dailykos.com/story/2005/3/29/113651/512
Maybe the founding fathers were really just kidding with that First Amendment…
Posted by Matt Harris on Mar 29, 2005 at 9:39 PM
Come on, Matt: Its not THAT hard. If you can come up with a counter-proposal in the space of 4 paragraphs, the Democrats could have done it over the past…what?...7-8 years since Clinton acknowledged the problem, or the past 20-25 since Reagan did so. If Bush is vague, the Democrats can be vague. But instead they are negative.
Yes, “my boy” Bush (do you really have to be condescending when having a policy discussion?) has in fact not made a specific proposal. Nor will the general outline or concept, if you prefer, of private accounts that he has proposed actually solve the Social Security short-fall problem. Surprisingly enough, he is playing politics with a political issue, and in so far as his tactics will create confusion in the general public, they are to be criticized (but not self-righteously so: confusion and misdirection is a common politician’s technique of the left and the right). My point was that everyone seems to agree there is a problem; even you seem to agree. It’s that Bush is the first person to put the issue in genuine play in the political space and to take all the political risk such a move entails. The Democrats merely want to pretend there is no fundamental problem and to snipe.
By the way, your proposed solutions are what was debated and enacted in 1983. They are only short-term (about 20 years, apparently), band-aid approaches. There is a structural weakness that needs to be addressed.
Posted by Mitch on Mar 29, 2005 at 9:53 PM
Just my opinion Mitch, but I think you may need to develop some thicker skin if you are going to venture into the lair of the “rabid progressives” and accuse us of vituperation, misinformation and whining. Are you really offended by my labeling of Bush as “your boy”?! What did you expect after the above characterizations, to be greeted with flowers?
While we don’t disagree on the prospect of a possible funding problem at some point in the future, I really do disagree that there is a structural weakness that needs to be addressed. I also disagree with your assertion that the solutions in 1983 only added 20 years to funding of the program. By all accounts that I have read, the system had gone into a revenue/payout deficit situation some time in 1975 and Social Security trustees had estimated that ability to make full payments would cease by mid 1983 (as opposed to today’s most pessimistic estimate of 2042). By my math that’s an extension of about 60 years.
I truly believe that there are more important issues on the table at this point, such as Health Care reform (Repubs sure were positive when Clinton tried to tackle that one, weren’t they?) and the record budget deficits we face NOW. I’d just as soon Bush focused on cleaning up his own messes, before he is allowed to try his hand at other less pressing issues.
Posted by Matt Harris on Mar 30, 2005 at 10:27 AM
I suppose you are right about the thicker skin, although I was not so much offended as weary. And I thought of “vituperation, misinformation, and whining” as fairly objective assessments of the contents of many of the arguments I was reading, and not condescending. But probably not helpful characterisations, either. One man’s objective assessment is another’s personal insult.
You are probably right about the 60 years: I think I was confusing how often the issue has to get addressed with how often the problem arises. Bush is perhaps looking at the problem farther in advance than it was addressed in 1975. Whether you want to believe the 2042 date depends, I guess, on whether you have faith in the government’s ability to make long-term economic and fiscal forecasts: medicare after all is costing 8 times more than it was ever supposed to cost when it was created in 1965 (or thereabouts).
But I am not sure 60-year cycles of having to re-address the program and readjust the funding makes much more sense than 20-year cycles. In both, guesses some underlying problem has not been fixed. My opinion that the problem is structural is based on the view that having to raise taxes make what was supposed to be a self-funding insurance program work indicates the system is not working well at a fundamental level.
It is certainly arguable that there are more pressing problems than fixing the Social Security system. You and I would disagree, I would guess, about the government’s ability to effectively fix some of them (health care, for example). And we would probably disagree about which data are meaninful in analyzing the Social Security situation: I read analyses on both the left and the right and the numbers used, terms invoked, dimensions explored, are very different. All the yelling (on both sides) isn’t helpful to the public discussion. There may be no way around the slide into emotionalism (again, on both sides) as the basis for policy discussion in the US, but I find it hard to be optimisitic about the choices we will make if that is the case.
Posted by Mitch on Mar 30, 2005 at 2:59 PM
I appreciate your ability to discuss the subject rationally and didn’t really take any insult from the terms you used. You make some good points and offer some interesting debate. Have a good day.
Posted by Matt Harris on Mar 30, 2005 at 3:42 PM
Mitch,how did I prove your point?All I did was to point out that bushes ‘solution’is a blatent rip-off,not just from me but from you too,unless of course you are part of bushes base.I don’t really know what is the answer is,but taking >2 TRILLION $ out of our pockets isn’t it!Do you have a solution? So far you haven’t proposed one.Don’t talk the talk unless you’re willing to walk the walk.Really,if you have a possible solution,I’d like to hear it.We need to come up with something,brother.
Posted by whats the truth? on Apr 1, 2005 at 4:17 PM
To whats the truth? - Although I can no longer see your original post (maybe there is a way to retrieve it but I am a novice), I think I remember enough of it to respond as follows: Declaring that something is a blatent rip-off is not the same thing as proving that it is. The point you proved (and continue to prove) is that the critics of Bush’s plan are long on things they don’t like about it (without necessarily proving they won’t work) and short on specific alternative possiblities. The response seems much more emotional than reasoned, logical or analytic.
You, for example, seem to have faith that figures like $2 trillion are in some way reliable, when even non-partisan organizations like FactCheck.org have pointed out how grossly exaggerated they are; my guess is you want to believe they are accurate because you just don’t like Bush. Furthermore (if I remember correctly) your argument was largely based on a set of assumptions whose relationship to truth is debatable and a set of values that are not universally shared.
As for my providing a solution, I wasn’t the person complaining about the suggestion on the table, declaring it a rip-off without proof, argument, or an alternative. If pressed, I would support a more detailed proposal along the lines Bush is suggesting, phased in over time and voluntary at least at the beginning, and incorporating selected elements of the federal-employee retirement syste (which, coincidentally, Congresspeople already have access to and that I believe is much like Bush’s admittedly vague plan) that seem transferable.
You make clear you don’t have a solution, and it strikes me as strident and rather bush-league (no pun intended) to complain about someone else who is at least making an effort to solve a real problem. There are many things in what Bush has proposed that can be improved or that perhaps should be discarded, but anguished cries about his motivations don’t persuade and don’t move us any closer to a real solution.
Posted by Mitch on Apr 1, 2005 at 4:59 PM
My attempt with my original post was and is to question Bushes motives.And Mitch,your arguement also is “based on a set of assumptions whose relationship to truth is debatable”.You might try to discuss the issues without the continual litany of sometimes veiled insults to peoples intelligence.Calling someone else stupid does’nt make you smart.Oh,by the way,if you want to see my original post,just click on the ‘back’button,and scroll down to the bottom of the page.
Posted by whats the truth? on Apr 2, 2005 at 6:40 AM
what’s the truth? - My apologies for any veiled or other insult to people’s intelligence. Yes, of course, all opinion is based on assumptions and values. I wasn’t sure you knew that, because you seemed to believe that your declaration of your opinion on Bush’s motivations was somehow persuasive or definitive and therefore invalidated any other opinion and preclued your need for further argument.
My point is that motivation is not the best focus of debate: outcomes of policies are more important than motivations, more subject to objective evaluation, and less speculative. If one’s motivation is to make money and become rich, but the outcome is that he/she starts a business that employees 150 otherwise unemployed or low-income workers in steady and meaningful work, are you going to argue that the motivation of greed makes the effort unworthy? Similary, if one’smotivation is to provide better quality low-income housing, but the outcome is that 150 additional people become homeless, are we to celebrate unreservedly? I realize these are hypotheticals (although I would contend they are based on the history of the country); they just illustrate the point I was making. You can certainly question Bush’s motives, but why bother? You don’t know what his motives are, but merely guess what they are based on your feelings about Bush and his ideology, and in the long run, they don’t matter.
And your Back-button solution isn’t working: I am relaunchinng my browser when I get the email notices of responses, so there is no “Back” to go to, and I am not inclined to hunt through all the history: I would have several ITT List entries over many days to scour.
Posted by Mitch on Apr 2, 2005 at 9:26 AM
Peoples motivation are paramount importance in any discussion of public or even private policy.If you are trying to work out a business deal with someone,you damn well better know what there intentions are.Otherwise, your just setting yourself up.Bush says that he welcomes disscusion and wants all ideas on the table,but he bans anybody who doesn’t agree with him 100% from attending his town hall meetings on the subject,his words say one thing,but his actions say just the opposite.Which do you choose to believe?
Posted by whats the truth? on Apr 2, 2005 at 4:04 PM
I disagree. Motivation is not completely unimportant, but I don’t care how well-motivated you are if I think your proposed policy is doomed to failure or likely to create an undesirable result or an outcome that militates against your goals. The first thing to assess about a policy is its outcome; only if that makes sense do you make a guess about the motivation of those proposing it. Otherwise you would have to reject every idea of someone who you distrusted and accept every single idea of any politician you generally trusted, and that is just mindless.
Regarding your specific example, you are asking me if I think Bush really welcomes all ideas, as he says, when what he does is screen his audiences. I don’t see how the question pertains to our disagreement, frankly: the validity of Bush’s ideas are completely unrelated to his willingness to hear opposing views. His ability to persuade others of the validity of his ideas is very much tied to his willingness to entertain disagreement, so that the audience screening is stupid from a political point of view, but it says nothing about the ideas themselves.
An idea is a good idea or a bad idea irrespective of the motivation, personality, or values of the person putting forth the idea. That’s just basic logic.
Posted by Mitch on Apr 2, 2005 at 7:58 PM
People get scammed every day by others whose motivation is to scam them.Mainly because they didn’t accertain the others motive.If someones aim is to rip you off,don’t you want to know that? If not,you know,I’ve got a killer real estate deal for you.All kidding aside,whats so great about Bushes idea? It takes money out of the SS fund now(if there’s any money left),for less money going out later.Thats just a step sideways.And in the meantime,a LOT of money is being syphoned off by wall street.Doesn’t that raise even the slightest suspision in you? It does in me.You assume that Bush is well intentioned,I don’t.
Posted by whats the truth? on Apr 4, 2005 at 5:15 PM
I’m not saying motivation is never pertinent, just that it is not primary. Again, this is Logic 101: the source of a statement is no measure of the validity or truth of the statement. I don’t assume that Bush is well-intentioned. What I assume is that I can analyze the proposal down to the the assumptions underlying that proposal (which, granted, is pretty vague at this point regarding Social Security) and seeing if they make sense to me. Since what Bush is proposing moves Social Security in a direction towards making it more like what congresspeople have by way of a retirement system, I will not reject it outright, and I am waiting to see more detail before I pass final judgment.
My critique of the critics of Bush’s proposal is that, frankly, there is not enough of a plan yet to be sure whether or not it will work, and it is hard to escape the perception that his critics just don’t like Bush and haven’t even given his proposal much thought. It amazes me that people can get so worked up about something so vague; it suggests an emotional, rather than a thoughtful, reaction, which in political discussions is a dangerous path to follow. My guess is that if Bush proposed free universal health care, many of the same people who decry his social security proposal would criticize his health-care initiative, just because it came from him.
I am probably not as suspicious of Wall Street making money as you are. My experience, as someone who has worked largely with government employees in my adult life, is that the government is not particularly astute or efficient in most of its efforts and can be as corrupt and larcenous as corporations, if the opportunity is right (vide, the Keating 5, the House check-kiting scandal, Tammany Hall, the Chicago machine, etc.). So I don’t dismiss something out of hand just because someone in a corporation might make some money off of it. Being suspicious makes some sense, but being suspicious is not the same thing as evaluating and critiquing.
Posted by Mitch on Apr 4, 2005 at 6:56 PM
“My critique of the critics of Bush’s proposal is that, frankly, there is not enough of a plan yet to be sure whether or not it will work, and it is hard to escape the perception that his critics just don’t like Bush and haven’t even given his proposal much thought.”
I am sure that most of Bush’s critics (myself included) don’t like Bush much. The main reason for this is Bush’s track record, which in my opinion is one of failure and deceit. What would you expect us to do, while Bush is out there selling his non-existent plan ad nauseum? Wait for his final proposal? By that time the game would be over. His propoganda regarding Social Security would have become regarded as fact by the intellectually lazy of the country (a very large number IMO).
“It amazes me that people can get so worked up about something so vague; it suggests an emotional, rather than a thoughtful, reaction, which in political discussions is a dangerous path to follow.”
It amazes me that somebody can sell something so vague. Did you see the scripted town-hall style meeting where Bush had that black man on and started telling him what a bad deal SS was for black people cuz they died younger? Like all his other staged propoganda events it was downright creepy. Did you see the story I linked about those horrid Democrats being kicked out of one of these “discussions” because they had a bumper sticker on one of their cars that said “No Blood for Oil”? Talk about a dangerous path to follow. If you want a thoughtful reaction, you had better make an honest, thoughtful presentation. That’s just not happening right now.
Posted by Matt Harris on Apr 6, 2005 at 6:23 PM
The last two sentences were aimed at the Bush Administration, and not you Mitch, in case that wasn’t clear.
Posted by Matt Harris on Apr 6, 2005 at 6:26 PM
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Reader Comments
Credit card companies opened the 30 percent interest casino – inviting high risk debtors – in the mathematical expectation that they would make more money on 30 percenters than they ever will on “straight” credit card holders – and they found out they were right.
The author of “The Two Income Trap spent all day giving a seminar to Citibank on how to cut its mortgage default rate in half – only to be told after all: “We have no intention of not making loans to those people; we make money on those people.”
If American finance wants to leave behind the old world of conservative loan practices to cash in on the higher risk arena – bless their sophisticated foresight – but the law of the land need not be pressed into service to reel in even more loans that went bad in the
lenders’ chosen high-fast game.
If this were an American phenomenon, then I’d understand the belief that the attack on social security can be stopped. However, the equivalent of Social security is under attack in dozens of countries all over the world, by governments of the right and the left. The welfare state is being systematically dismantled globally.
Since the beginning of the year, several hundred thousand people have demonstrated in Russia against government measures aimed at dismantling the existing benefits available to retired people, the sick, or certain state employees. The state will no longer provide free basic medicine and medical treatment, public transport or reductions in the price of phone calls or rents. In Germany, the period in which you can get unemployment pay has been cut from 36 months to 18 for the over 55s and to 12 for the rest; this at a time when unemployment has risen above 5 million (13%).
In Holland and Poland the governments are taking similar measures, following in the wake of the French and Austrian governments who, in 2003, ‘reformed’ the system of pension payments, adding several years to people’s working lives. The French government continues with its attacks on social protection, while the British government also intends to force more and more categories of workers to carry on toiling until they are 65 or even 70. In all the industrialised countries the welfare state is on the verge of collapse.
These governments have NO CHOICE, because it is CAPITALISM that is bankrupt. The economic crisis is laying bare all the contradictions of capitalism, and revealing the impossibility of finding a solution to them. Too many commodities are being produced; the world market is glutted. The bourgeoisie’s need to make profits in order to avoid bankruptcy is increasing rivalries between the main industrial countries. The result is an open economic war where the prize is to grab the markets from your rivals. This in turn leads to the desperate search to lower production costs. The only way to do this is to attack the working class. On the one hand the bourgeoisie is trying to raise productivity through speed-ups and increasing the flexibility of the labour force, so that it can get away with employing as few workers as possible. On the other hand it is carrying out a vast programme of ‘reforms’ – i.e. attacks on the social wage: pensions, unemployment benefits, medical benefits, sick pay, and so on. NO section of the working class is being spared – older or younger generation, at work or on the dole, public sector or private sector. The consequence of these attacks is a general degradation of living and working conditions for the whole international working class. The ferocious exploitation imposed on the workers leads to a general decline in health at the very time it becomes more difficult to get medical assistance; workers who have looked forward to a period of rest after years of wage slavery see these hopes threatened by the retirement age being raised and pension payments being lowered; younger workers face the problem of precarious employment, going from one job to the next with wage levels always being pulled downwards, all this interspersed by periods of unemployment on reduced benefits. Finding accommodation and putting something away for retirement becomes increasingly difficult.
The attacks are not going to stop there - they are going to get worse. It is a GLOBAL phenomenon. This is why the working class has to become aware that the system is indeed bankrupt and that the solution lies not in reforms, or a change of government, but in a change in the very basis of society.
“In normal periods, stocks average 3.7 percent annual returns over the long run, only 0.7 percent more on average than returns in the current system.”
I don’t know where this “data” came from, but it is wrong. Stocks average about 11% growth per year and have for over a century (see Stocks for the Long Run or any economic text). This amounts to about 7-8% after inflation,
Allowing people to handle THEIR OWN MONEY makes about as much sense as allowing them to OWN THEIR OWN HOUSES - and we all know what a failure that was! :)
That is a very dire outlook, probably true. I also see that this is becoming a global situation.
I have posted numerous times on the Social Security issue and I have expressed concern with my state senators and district congressman. I don’t think the will of the people is being considered. The Bush agenda is being steamrolled, and I hope Congress won’t roll over and die on this. What is with this bottomless well of greed? Political propaganda is beating on Social Security mercilessly with lies, lies, and more lies.
Perhaps economies need to change before a collapse, but right now we are being driven into debt by the most fiscally irresponsible U.S. administration ever. It’s not too late to take a nose dive over the cliff if Congress would develop a backbone and serve the people instead of the fattest wallets.
Apologies folks; I seem to have patched in the wrong response with my credit card bit reply to the S.S. privatization story.
:-] <sheepish grin
I MEANT TO SAY that privatization requires the gov to overextend by borrowing (even more?) trillions, thereby taking a chance we CANNOT afford on causing the entire economy to melt down—all for the sake of lending money to buy stocks to folks who CAN afford to take the chance on their retirement precisely because they are otherwise so securely situated finacially.
Denis Drew
The argument that this is a global phenomenon is only partially true. Yes, they fought in Russia for their benefits and, in large part, they won. The government backed off and made the cuts less drastic.
Also, I heard an interview on BBC the other day in which some financial experts were saying that current pending legislation in Parliament is actually attempting to redirect the British retirement system to be more like our current social security. He said that Britain has had a scheme like the one Bush is proposing for some time, and it has been an utter failure. He stated that polls in England show most people want to go to our system as they have, for the most part, not done well with the “Bush” type system. Shouldn’t that tell us something?
it is very difficult to sort truth from fiction in the usa as well as any place in the world > i read on-line media from all over the world daily and find it fascinating that on-site reporting can be so radically different, so different that all to often it seems as if different events are being described > it does not take rocket science to see there exists an extreme dichotomy between the “haves” and the “have-nots” > every political system has bush types that are in essence just plain greedy and stupid > democracy as we have known it is not a system that works - even the primrose path is quickly coming to an end > salvation of the world possibly thru a benevalent dictatorship will be required > it is long past time for a world-wide grass roots effort without boundaries between countries, people, religions or social dynamics > time is running out pretty quick, maybe a hair quicker than is the fossil fuel but it is already too late by far to mitigate global warming
‘Facts’ Why don’t we just allocate everyone their own tank or jet fighter. Then they could get on with defending there own little bit of the country. We could share out the tools so that everyone gets a chance to repair the highways. We could also dismantle public education and have everyone tutoring their own kinds at home. Then we could give everyone fire extinguishers which would enable us to get rid of the fire department. That way no one would have to pay any tax.
Are you seriously going to argue that individuals do not know what’s best for their kids education, their local highway system, and are not the best people to DEFEND THEIR OWN HOMES in times of conflict or emergency?
I mean there is no such thing as society anyway, and the only legitimate law is the law of the jungle. Isn’t that right ‘facts’?
Matilda,
I am not sure whether you’re being sarcastic or you really mean what you’ve written. Please clarify.
While I do not agree that the Social Security system needs the kind of fixing that Bush et al envision, it’s important to see the whole story. Facts is right when he points out that the rate of return on the stock market over time is not 3.7 percent, but closer to 7.5% discounting inflation. That’s a pretty substantial difference, especially compounded over some 30-40 years. It’s understandable why the 35 and under crowd would like that option. What Facts neglects to note is that the 1-2 TRILLION dollars pricetag to fund such a transfer would inevitably eat up whatever additional earnings the average retiree would receive in the form of higher taxes and/or reduced benefits. And that’s just the tip of the iceberg. What about the drag on the economy all the additional debt will cause? Higher interest rates, a depressed dollar (it’s pretty depressed already), tightening corporate profits, fewer jobs, etc. It’s a surefire recipe for economic disaster. Facts may be right that in a perfect world it would be good if we had some control over our Social Security monies before we retire, but this is not a perfect world. The price for that control is too high. There are better solutions.
dipping my toes in the water > sarcasm is, i think, usually a waste of time/energy and rarely effective > commentary on this forum (unlike many other forums) comes from people whom as a rule are much less in a state of denial than the “norm” as well as generally more intelligent but commentary seems mostly to be just that ....... commentary > it has been clear to me for many years that this planet is on it’s way downhill and with it civilization as we know it as well as a multitude of plant/animal species and on & on & on ......... blah, blah, blah ......... also, clear as our star, that radical re-orientation of humanities posits is long overdue and, in fact, it’s just plain to late > regardless of other’s good intentions methodolgy that will work is rarely verbalized and yet the hardware exists (constantly improving digital technology — www) > i advocate that it is long past time for “one earth - one people” > i am unaware of any political system that currently would have the mindset to implement and maintain the social dynamics necessary to succeed > example: 1) the United Nations has had many years to develop and bring to maturation a system whereby earth species could thrive, survive and continue evolving, instead the UN is a thoroughly corrupt political entity as well as the complete dichotomy of 2) Slow Foods (a far from perfect entity) which is a grass-roots league of nations (yes, i did attend Terra Madre where over 5000 mostly agriculturists/farmers representing over 100 countries/cultures were able to not only thrive and complete an agenda and leave feeling good and full of hope) > Reality? mass American denial? “what is our oil doing under their sand”? > i could go on and on but the essence of my previous post reflects my current understanding of what will be necessary if there is to be our children’s children’s children > other paths are folly .........
Here’s a great essay from the Future of Freedom Foundation (fff.org):
Government’s Social Security Mess
by Sheldon Richman, March 11, 2005
It’s hard to say how the debate over Social Security will turn out. Considering that the system rests on the three-legged stool of the welfare state — coercion, deception, and paternalism — it’s hard to see a case for anything but abolition and the individual right to control one’s own income. But in thinking about a way out of the mess, it is worth taking time to understand how we got into it.
And it is a mess. Government investment on behalf of future retirees is like the tooth fairy, the Easter Bunny, and Santa Claus. It never existed. As a result, in about a dozen years, when the payroll tax can’t cover benefits, the government, to keep its promises, will substantially raise taxes on workers and/or begin borrowing huge amounts of money, consuming capital that would have raised our living standard. The government could reduce other spending, but that will be difficult because all government spending is backed by well-organized interest groups who do not cotton to proposed cuts. However, the political wizards may try to get away with trimming the benefits of future retirees or changing the retirement age. Whatever solution the politicians adopt is bound to harm large groups of people and stunt economic growth.
If we take a step back, we can see that only government could have brought us to this lamentable condition. We have Franklin Roosevelt and his New Deal to thank. It didn’t have to be. Indeed, no private organization could have gotten away with it. There’s a lesson here that is not being learned: government produces nothing, and so it was a mistake to think it could provide retirement income constructively. It got away with moving money around for several decades, but, like a chain letter, the scheme had to end.
How did it happen? According to economic historian Charlotte Twight, in 1935 Roosevelt exploited the American people’s concern about the elderly whose savings had been wiped out in the (government-caused) Great Depression. Americans supported emergency “public assistance,” but opposed a permanent government pension plan. It smelled of socialism, and Americans were still too individualistic to be comfortable with Prussian-style “social security.” So Roosevelt and his congressional water-carriers hitched Social Security to a “public assistance” bill. Whenever anyone suggested a separate vote on the two programs, Roosevelt opposed it. When the New Dealers talked publicly about Social Security, they dishonestly portrayed it as an insurance or pension program. It passed and grew over the years, turning most retirees into wards of the state.
Despite the references to insurance and pensions, Social Security has been run like a confidence game. It taxes workers and promises to provide retirement income to them later. Then it hands the money to current retirees as it plans to tax the next working generation to keep the promises it made to the current one. No money is invested, so there is no new production and no true return. In the early 1980s the politicians decided to collect more money than is needed for retirees so the surplus could cover other government spending and make budgets deficits appear smaller than they really were. The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.
All of this has come to a head lately because the big baby-boom generation will soon start retiring, the elderly are living longer, and relatively few workers will be around to support them. To sustain the system, the burden of government will grow.
Hence, the big mess. It takes a government to come up with something so tragically idiotic. The opportunistic politicians who saddled us with it thought that in the long run we’d all be dead. Well, they are. But the long run is now here. And so are we — to suffer the consequences.
-Sheldon Richman is senior fellow at The Future of Freedom Foundation, author of Tethered Citizens: Time to Repeal the Welfare State, and editor of The Freeman magazine.
It’s funny how one reader (Stephen) can look at an essay and classify it as great, while another (me) can read it and classify it as garbage. I read the above essay and just see a bunch of topic sentences strewn haphazardly about, totally devoid of any supporting sentences.
Take for instance the last sentence in the 3rd to last paragraph which reads “The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.” Nowhere in the essay do I see any supporting evidence for this statement. Why is the SS Trust Fund a lie? How do we know that people would otherwise have invested this money for later years? Which people? All people? I’m afraid I’ll have to call Bullshit there. I know lots of people who wouldn’t have invested the money for later years. I bet you do too.
The essay itself does nothing but criticize Social Security. It doesn’t provide any idea as to what would have been a better solution to the overwhelming problem of senior poverty after The Depression, or what to do about the supposed crisis now. Nothing.
Yet Stephen sees greatness in the essay. I guess there is just no accounting for taste.
Margaret, sorry about the late reply but yes, I was being sarcastic. Well, pointing out absurd ironies in the conservative position anyway. The fact that this was not immediately apparent worries me little bit.
You’re right, Matt. The article was not great. Greatness can be found in the thinking of Ludwig von Mises, Murray Rothbard, and a few others. Free audio downloads are available at mises.org.
I would like to point out three facts that the establishment does not want you to know:
1. The Federal Reserve was created using a blueprint drawn up by a cabal of top bankers. (Can anyone on this page argue that they were acting in the public interest?)
2. The depression occurred after the creation of the Federal Reserve (coincidence?).
3. Since the creation of the Fed, the dollar has lost over 98% of its value. Compare this to the complete absence of inflation before its creation. Is this not theft?
I understand that each President has a desire to leave office with something that they have accomplished. Unfortunately Bush’s plan for Social Security will not have for him the desired effect. The fact that he is dismantling a system that has been in place and working for one that is bound to fail miserable proves that where he is concerned, once again arrogance rules the day.
Can anyone say they were truly surprised by this?Bush’s administration has done whatever it could to favor the interests of big business over the people.
I find this new development interesting,however.I didn’t think the re-party had the audacity to tamper with something like Social Security.After all,Ronald Reagan,god of the re-party,never had the temerity as he feared the political ramififcations.
Unfortunately,our citizens are once again being told The Big Lie and once again believing it.The sad thing is even if the Democrats win in 2008 and manage to fix this awful mess(with the re-partisans kibitzing and kvetching the whole time),the crooks who’ve engineered this scheme will still make their millions and retire some where they casn’t be touched.
Re-partisans are big believers in the cult of tradition-the good old days.I used to think they meant the 1950’s.Now I see they meant the 1920’s.
You can fool too many of the people too much of the time.
-James Thurber
Guest Commentary in “BusinessWeek” magazine 03-07-05 p.39-40
“Private Accounts: Right Idea, Wrong Time—-Why a longtime advocate isn’t backing Bush’s plan”
by Paul Craig Roberts, a former Assistant Treasury Secretary in the Reagan Administration
” A privatization scheme launched early in President Ronald Reagan’s first term would have had a 20-year financial market boom to underwrite the shift. The 1980s and 1990s were also periods of strong employment growth, which would have helped generate the payroll revenues needed to fund the transition. The U.S. had not amassed the massive trade deficits that now undermine its capacity to issue trillions of dollars in new debt, and it had not launched a costly war in the Middle East.”
“Strike One against Bush’s plan is the inability of the weakening dollar to carry the debt burden required to finance the transition to privatization. Foreigners are drowning in dollars. With the U.S. economy in relative decline, they have no appetite for additional trillions of dollars. The greenback has weakened
so much that it’s on the verge of losing status as a reserve currency.”
“Strike Two is the lack of domestic savings that would fund this shift. The U.S. personal savings rate is practically nonexistent, and the government budget is awash in red ink. Offshore production, job outsourcing, and the proliferation of H-1b and L-1 work visas for foreign professionals have brought a halt to the growth in the high-value-added, high-productivity jobs that permits household saving.”
I’ve posted this before. Bush sure talks a big game about Social Security but has yet to put forth a public proposal which can be fairly debated. The U.S. faces a the largest deficit ever, now is not the time to get even more in debt.
I am beginning to believe the conspiracy theory that George W. and his cronies are out to bankrupt the government.
Bankrupting the federal government would be a pretty good idea as a way of making a transition back to a confederate government like before the constitution was written and all we had was the Bill of Rights.
Speaking of the Constitution, Patrick Henry, upon hearing that plans were afoot to write a constitution, is quoted as having said, “I smell a rat.” I’ll bet you didn’t know that. I only learned it recently. Apparently they don’t teach that in the establishment schools.
If only they would dispose of all the bombs in a safe place instead of dropping them on innocent people.
You are not alone pick of the litter. This plan to privatize Social security is so wrong, for so many reasons, it should never have made it past some junior, junior manager’s desk at Treasury. And I’m being generous at that. Bush et al know it will bankrupt the government (as Paul Craig Roberts ably illustrates above), yet here we are. It does make you wonder why Bush and many of the re-party are pushing for it so hard. Am I missing something? It’s self-defeating, even for (especially for, eventually) the financial institutions it would help in the near-term. I realize that not everyone sees things the same way, but the rational behind this one simply escapes me.
Not everyone thinks that’s a good idea Stephen. Anyone who looks at the repercussions can see that. For starters, the dollar plunges, which triggers a world-wide Depression, which leads to social chaos, which leads to a series of wars to divert our attention, and on and on. Do the ends always justify the means? Because that’s what you are arguing…
I’m not so sure that this is about feathering the nests of those who support the GOP. I say that because the proposed “solutions” to the supposed “problems”, don’t align at all. In addition, many big Wall Street brokers gave as much to Democrats as the did to the GOP.
I think this is all about a once-in-a-lifetime shot at dismantling a key component of the New Deal. The GOP needs to launch a full-scale assault on Social Security this year, as many GOP members need to stand for re-election next year and they don’t want a bunch of pissed-off senior citizens interrupting their fund-raising rallies next year with questions from Grandpa Jones about how he is going to pay for his hemmorhoid medicine and his cat food without a Social Security check. It can be very unseemly to have to tell Grandpa to piss off and get a job as a greeter at Wal-Mart, just so Bush’s CEO pals won’t have to have that 6.2% deduction taken out of their first one or two pay stubs in a year. (Why can’t grandpa just go away and die, like the GOP wants????)
These right-wing nutjobs, like the hygienically challenged Grover Norquist, believe govenrnment should be small enough to “drown in a bathtub”, to use a hideously graphic rhetorical formulation that Mr. Norquist is fond of. Except of course for the military, where it is apparently O.K. to piss several billion dollars down our collective legs every month with not a damn thing to show for it.
These wingnuts want to eviscerate liberal social programs and they don’t give a flying BEEP about the human consequences of their actions. Maybe we should ask them if the 20% of all Social Security recipients for whom Social Security is their only source of income, can come and live with them after privitization??!?!??
Stephen - todays retirees are NOT affected by any SS proposal currently on the table. They should sit on the sidelines and let those affected decide their own fates.
It is fascinating to note that while elderly people are strongly against SS reform, the age group 20-40 is strongly in favor of reform. Given that the reforms will actually affect the latter group, it makes sense that they should have the say so in what happens. . .
Tommy - you are right, folks 20-40 should have a major say in the issue. And if there were no or minimal repercussions for switching to private accounts, you would definitely have my ear. But that is not at all the case. The Bush plan at present will cost you, me, our families, our friends, our kids, our grandkids, etc., 1-2 trillion dollars to fund in transition costs. Monies the government cannot afford to add to the already considerable national debt. It will tank the economy for the forseeable future and will cost us far more in the form of higher interest rates, fewer jobs, etc. than any of us in the 20-40 year-old bracket (or any age bracket for that matter) would stand to gain from the switch.
Regardless of your thoughts regarding the social effects such legislation would have, surely the economic ones should grab your attention. Adding a trillion or more dollars of debt to a relatively weak economy is foolhardy at best. I just do not see an upside here.
tommy:
Better read a little more, tommy. People who will be retiring soon will be affected by Dumbya’s proposed reforms. As current workers contributions are bled off to fund these private accounts, some reduction in benefits will have to occur.
Younger workers (you said 20 to 40 year olds) may be more naive or more susceptible to propaganda or both. You also need to read about how younger employees will be required to borrow from the plan to fund an annuity to support their retirement and then pay it back with interest. It’s a screw job, don’t kid yourself. This is the most dishonest Administration in American history. Look, their fearless leader has the longest rap sheet of any president in American history. In short, he is a criminal.
The Democrats do have a plan for Social Security, it’s called Social Security and it works the way it is supposed to. Lifting the $90k cap on income subject the tax would make it solvent forever. Democrats also have plans for “private accounts” - they are called 401(k)s and IRAs. Check into them!
Matt,
Stephen, like all other republican voters, is unable to recognize a false premise when he sees one. Rather, he is lead by a device (usually racial or religious bigotry, or some other vestigial, primitive remnant of the human instinct for tribalism) which renders them unable but to readily accept the false premise as truth. The exponents of the republican noise machine (Limbaugh, Hannity, etc.) are masters of the false premise, and if you pay close attention, you will find that they are unable make a single point that isn’t founded on a false premise, express or implied. In the case of this article, they are both.
Stephen and his ilk are victims to be pitied. He is, in all likelyhood, uneducable on this point.
“Stephen, like all other republican voters, is unable to recognize a false premise when he sees one.”
How easy it is to stereotype half the country! No need to worry or think about the complexities of how people decide what to think, how they gather information and process it. All one need know is that the “other” is a “republican” (or that they *might* be).
Hate and bigotry are alive and thriving! But there is good news - one can disavow such forces in ones own life. Whether they be on the left or the right or anywhere in between. . .
B.
Nah Bruce, Lefty is just pissed off that our President is able to lie blatantly to us and half the country seems to not care about that. While he/she may have been generalizing just a bit (90% of Republicans might be a more accurate assessment) his/her point is that Republicans have decided to drink the Kool Aid at the expense of the lives of our young servicemen and servicewoman, and now apparently at the expense of the elderly and those who will be at some point.
Though Lefty may hate some in the country for their despicably willful ignorance (as do I), your implication of bigotry is at best disingenuous. Sell your bullshit elsewhere. We’re not buyin’ it here.
I buy it!
Matt - no need for you to “buy” anything. You have made up your mind - it must be nice for you to divide the US into “us” and “them”. Of course, the “them” faction is foolish or evil. Yeah, that’s it; no rutther thought needed there.
By the way, since you say “we” are not buying it i am curious. Are you the official spokesperson for ITT or the whole liberal community? :)
(Matt, you might want to stop reading here.)
More thoughtful readers will realize that both sides have pluses and minuses. And, of course, both sides have honorable champions. In reality, given human limitations, it can only be said we are doing the best we can. . .
To answer your question I am the official spokesperson of Matt Harris. Perhaps I used the wrong pro-noun. Maybe I’ve been watching too much of el Dumbidente.
Oops I didn’t stop reading there. I sure hope that this is not the best we can do and IMO most thoughtful readers would hope for better also. In fact, it seems to me, that we are doing about as poorly as we can do right now. And therein lies the source of my vitriol, which admittedly was overflowing last night. I know I can do better and I’m not afraid to admit it.
Have a good day.
http://www.buckfush.com/
The attack on Social Security reminds me of a baseball game between the All Stars and a farm league team made up of widows, orphans, disabled veterans, and the chronically ill. When the All Stars have run the score and get bored, they start beating the farm league players with baseball bats. The crowd goes wild!
Okay, maybe the All Stars aren’t as mean as that, but why is no one taking into account that cheap oil has funded the stock market gains of the past 70 years, and it is extremely unlikely to do so in the next 70? Don’t we have any responsibility to take care of each other, come what may?
Some municipalities have already begun the transition from SS to personal accounts.
“In 1981 officials in Galveston, a seafront city on the Gulf of Mexico opted out of Social Security along with neighboring Brazoria and Matagorda Counties and chose instead to plunge their county governments into the unknown territory of offering private retirement accounts.”
Full story in link below. Overall, it seems to be an improvement. . .
http://www.nytimes.com/2005/03/18/national/18texas.html
Again, I guess beauty is in the eye of the beholder. I read the article you linked and would say there appears to be a divergent mix of reviews. For instance this from the article:
“Critics contend that employees with higher incomes do much better than those with lower incomes and that over time the fact that the returns are not indexed for inflation make them a worse deal than Social Security.
A study in 1999 by the Social Security Administration, for instance, found that after 20 years of retirement, all of the plan’s benefits, even for wealthier retirees, would be lower relative to Social Security.”
Not exactly a glowing endorsement.
Can I pick on Matt too?
>>Take for instance the last sentence in the 3rd to last paragraph which reads “The Social Security Trust Fund is a lie hiding the fact that the government squanders what people would otherwise have invested for their later years.” Nowhere in the essay do I see any supporting evidence for this statement.
<snip>
Why would you need supporting evidence that spending excess SS funds (taxes) into general revenues to support current obligations; rather than investing the excess into a multi-trillion dollar fund(s) which would enable returns for future retirees to offset the increased baby boomer projected needs; is not squandering the investment/trust?
Is that how you handle your retirement funds? Spend them this year and give yourself an I.O.U.?
Ron
The forcasts are that in 2042 (or 2052 if you believe the CBO which is much more likely right) S.S. will need 33% more revenue to cover a finally filled out retiree population. Working pop to grow FASTER than retiree pop after 2050 according to the CBO aging population chart (which lately only goes up to 2040—can’t imagine why 2050 disappeared off the web site).
All of which means the outside limit of the problem can be solved by at the worst raising the payroll tax by one-third at a time when average income should have more than doubled!
The only rub is that payroll tax has been paying a little too much to “subsidize” income tax programs—so it is only right to ask income tax payers to put out a little more to pay back payroll tax.
By the time 2042-52 rolls around income tax payers would be very used to paying that little more real money to pay real benefits—nobody will notice or care if the I.O.U.s to ourselves run out.
Bottom line average income will double by then. Real rub is whether the USA gets union organized enough so that the average wage earner is not earning less by then! (Legislation being the answer to the latter.)
“Can I pick on Matt too?”
Have at it Ron, but you may want to re-read my post and the essay I was critiquing so you can do a real job of it next time.
“Why would you need supporting evidence that spending excess SS funds (taxes) into general revenues to support current obligations; rather than investing the excess into a multi-trillion dollar fund(s) which would enable returns for future retirees to offset the increased baby boomer projected needs; is not squandering the investment/trust?”
Nowhere in the essay that I critiqued was there any mention of investing excess funds into a multi-trillion dollar fund (an Al Gore style lock-box if you will) that would enable returns for future retirees. The author simply said, as I posted “people would otherwise have invested for their later years” in speaking of the funds had they never gone into the system. This is quite a different argument than you make above.
“Is that how you handle your retirement funds? Spend them this year and give yourself an I.O.U.?”
No and no. I have personal retirement accounts called 401k’s and IRA’s. Perhaps you’ve heard of them. If not, check ‘em out, they’re pretty cool.
With all the vituperation and misinformation in the attacks on Bush’s plan what we have yet to see is an argument that the system does not need to be fixed or, better, an alternative plan for fixing it. As is the wont of the rabid progressive, the analysis here is long on speculation about motivations and short on facts specific policy recommendations. Bush is right; something needs to be done, a fact known since the 1980’s. The Democrats punted during all the time they controlled the Congress and/or the White House, so Bush is taking a first step: proposing something. But the best the left can come up with in response is whining and ad hominem attacks. No ideas.
Ad hominem,is that a new catch phrase?....2 >TRILLION< $ in transfer costs.How much of a return on our investment of 4% do we need to see before we make up for that? Do I get to choose how I invest this money? Or am I forced to enroll only in various government sponsered accounts? This whole thing stinks to high heaven! From what I’ve read about this,it’s a BLATENT attempt to syphon off a large amount of money to people who have way too much of the stuff already! Bush has consistently chosen to benefit his base,(the rich and powerful) at the expence of the rest of us.And we just let it happen.Hell,some of us line up for the chance to bend over and take it.It boggles the mind.From what I understand, it would take a relatively small increase in the maximum amount that can be taken out in SS taxes.But that would only affect the wealthy.So Bush flat out says he won’t consider it. Instead, he proposes a ‘solution’ that would take 2 >TRILLION<$ out of our pockets.Isn’t there something wrong with that,or is it just me?
Actually, “ad hominem” is an old catch phrase. And you continue to prove my point. There is not a suggestion in your posting, beyond the misinformation that a “relatively small increase” (current discussion is somewhere between 33% to 50%, hardly small) in the income cap would fix the problem [But since the syste (if we are to preserve it) gives you more the more you pay, those figures are probably inaccurate]. Nor is there any analysis your digital wailing, just a series of questions and the gnashing of teeth that passes for argument among Bush’s critics.
“With all the vituperation and misinformation in the attacks on Bush’s plan what we have yet to see is an argument that the system does not need to be fixed…”
Actually the next plan that your boy Bush comes up with will be his first. All we’ve heard so far is some blathering about Private/Personal/Big Brokerage Company Accounts and that all other options are “on thuh table”. Kinda hard to make a counter-proposal without an initial proposal. But hey, I’ll take a shot here. Either you increase funding or decrease benefits cuz those are the only things that would solve any kind of funding problem.
Apparently it is exactly this kind of simple logic that evades your boy (see record Federal Budget Deficits). But hey, let’s go ahead and make those tax cuts for the rich permanent. I mean why should anyone have to sacrifice for Rumsfeld’s ill-advised war besides the troops and our kids who’ll be left with the bill.
Come to think of it I’ll be quite happy if the Dems do the smart thing and become a true Opposition Party on SS “reform” and just say no. Kind of like I wouldn’t let the doctor who screwed up my wife’s breast cancer surgery do a preventitive mastectomy on my daughter, why would we let Doc (Quack) Bush do preventitive surgery on SS? The more Quack Bush is lameduck, the less Quack Bush can upphuck.
Did you read about the 3 US citizens who were kicked out of one of Bush’s taxpayer funded seminars on Social Security privatization because of a bumper sticker on their car that said “No Blood for Oil”?! See the story here:
http://www.dailykos.com/story/2005/3/29/113651/512
Maybe the founding fathers were really just kidding with that First Amendment…
Come on, Matt: Its not THAT hard. If you can come up with a counter-proposal in the space of 4 paragraphs, the Democrats could have done it over the past…what?...7-8 years since Clinton acknowledged the problem, or the past 20-25 since Reagan did so. If Bush is vague, the Democrats can be vague. But instead they are negative.
Yes, “my boy” Bush (do you really have to be condescending when having a policy discussion?) has in fact not made a specific proposal. Nor will the general outline or concept, if you prefer, of private accounts that he has proposed actually solve the Social Security short-fall problem. Surprisingly enough, he is playing politics with a political issue, and in so far as his tactics will create confusion in the general public, they are to be criticized (but not self-righteously so: confusion and misdirection is a common politician’s technique of the left and the right). My point was that everyone seems to agree there is a problem; even you seem to agree. It’s that Bush is the first person to put the issue in genuine play in the political space and to take all the political risk such a move entails. The Democrats merely want to pretend there is no fundamental problem and to snipe.
By the way, your proposed solutions are what was debated and enacted in 1983. They are only short-term (about 20 years, apparently), band-aid approaches. There is a structural weakness that needs to be addressed.
Just my opinion Mitch, but I think you may need to develop some thicker skin if you are going to venture into the lair of the “rabid progressives” and accuse us of vituperation, misinformation and whining. Are you really offended by my labeling of Bush as “your boy”?! What did you expect after the above characterizations, to be greeted with flowers?
While we don’t disagree on the prospect of a possible funding problem at some point in the future, I really do disagree that there is a structural weakness that needs to be addressed. I also disagree with your assertion that the solutions in 1983 only added 20 years to funding of the program. By all accounts that I have read, the system had gone into a revenue/payout deficit situation some time in 1975 and Social Security trustees had estimated that ability to make full payments would cease by mid 1983 (as opposed to today’s most pessimistic estimate of 2042). By my math that’s an extension of about 60 years.
I truly believe that there are more important issues on the table at this point, such as Health Care reform (Repubs sure were positive when Clinton tried to tackle that one, weren’t they?) and the record budget deficits we face NOW. I’d just as soon Bush focused on cleaning up his own messes, before he is allowed to try his hand at other less pressing issues.
I suppose you are right about the thicker skin, although I was not so much offended as weary. And I thought of “vituperation, misinformation, and whining” as fairly objective assessments of the contents of many of the arguments I was reading, and not condescending. But probably not helpful characterisations, either. One man’s objective assessment is another’s personal insult.
You are probably right about the 60 years: I think I was confusing how often the issue has to get addressed with how often the problem arises. Bush is perhaps looking at the problem farther in advance than it was addressed in 1975. Whether you want to believe the 2042 date depends, I guess, on whether you have faith in the government’s ability to make long-term economic and fiscal forecasts: medicare after all is costing 8 times more than it was ever supposed to cost when it was created in 1965 (or thereabouts).
But I am not sure 60-year cycles of having to re-address the program and readjust the funding makes much more sense than 20-year cycles. In both, guesses some underlying problem has not been fixed. My opinion that the problem is structural is based on the view that having to raise taxes make what was supposed to be a self-funding insurance program work indicates the system is not working well at a fundamental level.
It is certainly arguable that there are more pressing problems than fixing the Social Security system. You and I would disagree, I would guess, about the government’s ability to effectively fix some of them (health care, for example). And we would probably disagree about which data are meaninful in analyzing the Social Security situation: I read analyses on both the left and the right and the numbers used, terms invoked, dimensions explored, are very different. All the yelling (on both sides) isn’t helpful to the public discussion. There may be no way around the slide into emotionalism (again, on both sides) as the basis for policy discussion in the US, but I find it hard to be optimisitic about the choices we will make if that is the case.
I appreciate your ability to discuss the subject rationally and didn’t really take any insult from the terms you used. You make some good points and offer some interesting debate. Have a good day.
Mitch,how did I prove your point?All I did was to point out that bushes ‘solution’is a blatent rip-off,not just from me but from you too,unless of course you are part of bushes base.I don’t really know what is the answer is,but taking >2 TRILLION $ out of our pockets isn’t it!Do you have a solution? So far you haven’t proposed one.Don’t talk the talk unless you’re willing to walk the walk.Really,if you have a possible solution,I’d like to hear it.We need to come up with something,brother.
To whats the truth? - Although I can no longer see your original post (maybe there is a way to retrieve it but I am a novice), I think I remember enough of it to respond as follows: Declaring that something is a blatent rip-off is not the same thing as proving that it is. The point you proved (and continue to prove) is that the critics of Bush’s plan are long on things they don’t like about it (without necessarily proving they won’t work) and short on specific alternative possiblities. The response seems much more emotional than reasoned, logical or analytic.
You, for example, seem to have faith that figures like $2 trillion are in some way reliable, when even non-partisan organizations like FactCheck.org have pointed out how grossly exaggerated they are; my guess is you want to believe they are accurate because you just don’t like Bush. Furthermore (if I remember correctly) your argument was largely based on a set of assumptions whose relationship to truth is debatable and a set of values that are not universally shared.
As for my providing a solution, I wasn’t the person complaining about the suggestion on the table, declaring it a rip-off without proof, argument, or an alternative. If pressed, I would support a more detailed proposal along the lines Bush is suggesting, phased in over time and voluntary at least at the beginning, and incorporating selected elements of the federal-employee retirement syste (which, coincidentally, Congresspeople already have access to and that I believe is much like Bush’s admittedly vague plan) that seem transferable.
You make clear you don’t have a solution, and it strikes me as strident and rather bush-league (no pun intended) to complain about someone else who is at least making an effort to solve a real problem. There are many things in what Bush has proposed that can be improved or that perhaps should be discarded, but anguished cries about his motivations don’t persuade and don’t move us any closer to a real solution.
My attempt with my original post was and is to question Bushes motives.And Mitch,your arguement also is “based on a set of assumptions whose relationship to truth is debatable”.You might try to discuss the issues without the continual litany of sometimes veiled insults to peoples intelligence.Calling someone else stupid does’nt make you smart.Oh,by the way,if you want to see my original post,just click on the ‘back’button,and scroll down to the bottom of the page.
what’s the truth? - My apologies for any veiled or other insult to people’s intelligence. Yes, of course, all opinion is based on assumptions and values. I wasn’t sure you knew that, because you seemed to believe that your declaration of your opinion on Bush’s motivations was somehow persuasive or definitive and therefore invalidated any other opinion and preclued your need for further argument.
My point is that motivation is not the best focus of debate: outcomes of policies are more important than motivations, more subject to objective evaluation, and less speculative. If one’s motivation is to make money and become rich, but the outcome is that he/she starts a business that employees 150 otherwise unemployed or low-income workers in steady and meaningful work, are you going to argue that the motivation of greed makes the effort unworthy? Similary, if one’smotivation is to provide better quality low-income housing, but the outcome is that 150 additional people become homeless, are we to celebrate unreservedly? I realize these are hypotheticals (although I would contend they are based on the history of the country); they just illustrate the point I was making. You can certainly question Bush’s motives, but why bother? You don’t know what his motives are, but merely guess what they are based on your feelings about Bush and his ideology, and in the long run, they don’t matter.
And your Back-button solution isn’t working: I am relaunchinng my browser when I get the email notices of responses, so there is no “Back” to go to, and I am not inclined to hunt through all the history: I would have several ITT List entries over many days to scour.
Peoples motivation are paramount importance in any discussion of public or even private policy.If you are trying to work out a business deal with someone,you damn well better know what there intentions are.Otherwise, your just setting yourself up.Bush says that he welcomes disscusion and wants all ideas on the table,but he bans anybody who doesn’t agree with him 100% from attending his town hall meetings on the subject,his words say one thing,but his actions say just the opposite.Which do you choose to believe?
I disagree. Motivation is not completely unimportant, but I don’t care how well-motivated you are if I think your proposed policy is doomed to failure or likely to create an undesirable result or an outcome that militates against your goals. The first thing to assess about a policy is its outcome; only if that makes sense do you make a guess about the motivation of those proposing it. Otherwise you would have to reject every idea of someone who you distrusted and accept every single idea of any politician you generally trusted, and that is just mindless.
Regarding your specific example, you are asking me if I think Bush really welcomes all ideas, as he says, when what he does is screen his audiences. I don’t see how the question pertains to our disagreement, frankly: the validity of Bush’s ideas are completely unrelated to his willingness to hear opposing views. His ability to persuade others of the validity of his ideas is very much tied to his willingness to entertain disagreement, so that the audience screening is stupid from a political point of view, but it says nothing about the ideas themselves.
An idea is a good idea or a bad idea irrespective of the motivation, personality, or values of the person putting forth the idea. That’s just basic logic.
People get scammed every day by others whose motivation is to scam them.Mainly because they didn’t accertain the others motive.If someones aim is to rip you off,don’t you want to know that? If not,you know,I’ve got a killer real estate deal for you.All kidding aside,whats so great about Bushes idea? It takes money out of the SS fund now(if there’s any money left),for less money going out later.Thats just a step sideways.And in the meantime,a LOT of money is being syphoned off by wall street.Doesn’t that raise even the slightest suspision in you? It does in me.You assume that Bush is well intentioned,I don’t.
I’m not saying motivation is never pertinent, just that it is not primary. Again, this is Logic 101: the source of a statement is no measure of the validity or truth of the statement. I don’t assume that Bush is well-intentioned. What I assume is that I can analyze the proposal down to the the assumptions underlying that proposal (which, granted, is pretty vague at this point regarding Social Security) and seeing if they make sense to me. Since what Bush is proposing moves Social Security in a direction towards making it more like what congresspeople have by way of a retirement system, I will not reject it outright, and I am waiting to see more detail before I pass final judgment.
My critique of the critics of Bush’s proposal is that, frankly, there is not enough of a plan yet to be sure whether or not it will work, and it is hard to escape the perception that his critics just don’t like Bush and haven’t even given his proposal much thought. It amazes me that people can get so worked up about something so vague; it suggests an emotional, rather than a thoughtful, reaction, which in political discussions is a dangerous path to follow. My guess is that if Bush proposed free universal health care, many of the same people who decry his social security proposal would criticize his health-care initiative, just because it came from him.
I am probably not as suspicious of Wall Street making money as you are. My experience, as someone who has worked largely with government employees in my adult life, is that the government is not particularly astute or efficient in most of its efforts and can be as corrupt and larcenous as corporations, if the opportunity is right (vide, the Keating 5, the House check-kiting scandal, Tammany Hall, the Chicago machine, etc.). So I don’t dismiss something out of hand just because someone in a corporation might make some money off of it. Being suspicious makes some sense, but being suspicious is not the same thing as evaluating and critiquing.
“My critique of the critics of Bush’s proposal is that, frankly, there is not enough of a plan yet to be sure whether or not it will work, and it is hard to escape the perception that his critics just don’t like Bush and haven’t even given his proposal much thought.”
I am sure that most of Bush’s critics (myself included) don’t like Bush much. The main reason for this is Bush’s track record, which in my opinion is one of failure and deceit. What would you expect us to do, while Bush is out there selling his non-existent plan ad nauseum? Wait for his final proposal? By that time the game would be over. His propoganda regarding Social Security would have become regarded as fact by the intellectually lazy of the country (a very large number IMO).
“It amazes me that people can get so worked up about something so vague; it suggests an emotional, rather than a thoughtful, reaction, which in political discussions is a dangerous path to follow.”
It amazes me that somebody can sell something so vague. Did you see the scripted town-hall style meeting where Bush had that black man on and started telling him what a bad deal SS was for black people cuz they died younger? Like all his other staged propoganda events it was downright creepy. Did you see the story I linked about those horrid Democrats being kicked out of one of these “discussions” because they had a bumper sticker on one of their cars that said “No Blood for Oil”? Talk about a dangerous path to follow. If you want a thoughtful reaction, you had better make an honest, thoughtful presentation. That’s just not happening right now.
The last two sentences were aimed at the Bush Administration, and not you Mitch, in case that wasn’t clear.
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