[quote]100meters wrote:
Can you please just try factually debunking me? No, and a tip—s.s. wasn’t really designed to make those in the investing and banking fields richer, it’s more of an insurance policy[/quote]
HORSE SHIT!!
Originally it was supposed to be an insurance policy. It was never intended to be the leech it has become.
It is now socialized retirement, thanks to New Deal/Great Society democrats. And if you think for a second that folks drawing it don’t count it a pension, you are wrong.
Everyone that paid in is supposed to get what they paid in and more. Isn’t that how investing is supposed to work? I think so.
As for Bush’s ulterior motive of dis-mantling S.S. - the sooner the freakin better. I effectively pay 40% in tax on the last dollar I earn.
If Soc Sec is insureance, when do I get a fucking benefit from it? Fucking FDR - I hoe he’s choking in his grave.
You keep wanting to talk about Social Security on completely irrelevant threads.
Fine. Appologies for the hi-jack.
The President hasn’t proposed a plan for Social Security, so I don’t really know how you’re arguing about what “the President’s Plan” would or would not do.
The President has said that private accounts by themselves won’t bring Social Security into long-term solvency. But they could help to do so, depending on the details of whatever plan is proposed.
No new borrowed money would be required for the private accounts. The “cost” of private accounts is simply an accounting exercise – you are switching things around on the balance sheet, but no new debits are being created. With the pay-as-you-go system, money is owed to current workers and retirees. Money is paid by current workers. Money will be owed to future workers at some known level (ceteris paribus). THe “cost” comes from taking the current workers and their contributions out – so you have lessened your future liabilities. But the government has to pay its current obligations now – basically, it has to come to grips with the fact it already spent the money it collected that should have funded the current obligations.
News flash: There’s no “lock box”. The politicians spend the money as it comes in, and put government bonds in its place. They’ll have to pay the bonds off later. Putting money into private accounts is a way of making the government account for this now, rather than letting them continue the charade of the “lock box”. It would stop (or at least greatly lessen) the practice of using the current surpluses in Social Security tax collections to fund the rest of the government, and it would highlight the true size of our current budget deficit. That’s what private accounts would do: fix government accounting and make the government acknowledge the true size of its deficit spending problem.
The money is spent either way – the only question is whether it will be on the books or hidden by the current SS surplus, which just postpones the day of reckoning.
The true fix for Social Security will likley involve indexing benefits to the actual increase in cost of living rather than the increase in economic productivity. That’s assuming they keep it as an insurance/pension style program and don’t turn it into a complete welfare program.
100meters wrote:
Actually somebody else brought it up,
Perhaps a S.S. thread is in order.
I try to put plan in quotations, because your exactly right he won’t reveal his exact plan, but we have a good idea what the plan is.
His plan would immediately make S.S. insolvent—simple math. Next is S.S. actually headed for insolvency—if the economy grows faster than the 1.8 percent predicted in the pessimistic scenario, then no it’s not headed for insolvency. If you look at the optimistic numbers in their other projections (S.S.'s) then S.S. will be running nice surpluses for decades to come. And by the way, over it’s history, the optimistic projections have been the most accurate.[/quote]
The program is already technically insolvent – it just won’t happen in terms of actual cash flow for quite awhile. Letting currrent workers keep some of their own money works to simply accelerate to the cash flow what is already true of the program in general.
[quote]100meters wrote:
3.We do have to “borrow” money to make up the differences of the portions invested in private accts. This will be trillions of dollars. Paying back the trust fund will still be a given. Gov. pays back current debt. Gov. pays back trillions of dollars of new debt to make up difference in missing money going into pvt. accts. plus compounding interest on loans. Administrative fees. All subtracted from measly returns on safe govt. chosen investments. (maybe they’ll get 5%? maybe?)[/quote]
No NEW money would be borrowed – the money is already being borrowed from the current workers to pay benefits to the current retirees – whose money was “borrowed” to fund such boondoggles as The Great Society. The source of the borrowing would simply have to be different.
THe government already issues T-bills for this borrowing – it won’t pay any more in interest than it already is.
As to the return, a “safe” index stock fund (Wilshire 5000) for a 30-year-old would return a real, inflation-adjusted 6.8% if you use historical rate of return. A diversified bond fund, same assumptions, should be less than that, but a couple points higher than the historical risk-free rate of 3% on government T-bills. A mix should be between those two, depending on how the investor weights his portfolio. So the difference would be to the benefit of the individual – and it would compound, which, as you are well aware, makes it a huge difference over time.
See this article by FactCheck.org on how the Dems are using false assumptions in their web calculator to scare investors into thinking they will lose under a private account plan:
[quote]100meters wrote:
4. Yes Bush lied about the “Lockbox” and the taxcuts. Privitizing doesn’t fix any of the problems you mentioned. If Bush wants to borrow money, he’ll borrow it. Just like Bush borrows from the “charade” every day. A better plan would just have a president that keeps his word, or instead of faking his enormous deficit numbers with s.s. surplus money borrow from somewhere else.[/quote]
It wasn’t Bush who starting the borrowing from the Social Security “Trustfund” – using that term is a joke. A trustee would be tossed in jail for violation of his fiduciary duties if he treated the principal in a trust account as his personal spending source, covered by IOUs. I’m not going to look it up right now, but I believe it was LBJ who decided to put Social Security into the general budget – in order to cover the true cost of his Great Society programs. And it has been going on ever since – through Nixon, Ford, Carter, Reagan, Bush 41, Clinton and Bush 43.
[quote]100meters wrote:
5.Odds are incredibly good that not a damn thing needs to be done. Or as I keep saying IF Bush is right and S.S. goes “bankrupt” then it means the economy averaged 1.8 percent growth, and nobody can explain why in the holy hell would you want your money in the market!?----You would be shit out of luck with your privatized portion! Or you’d be getting a sweet 70% of your guaranteed benefit which would be much more than retirees currently get by just leaving S.S totally alone in the absolute worst case scenario. [/quote]
No, they aren’t. See this article by FactCheck.org, in response to those ridiculouse ads being run by the AARP:
[quote]100meters wrote:
Privatization is basically a foot in the door to dismantling S.S., because as people get less and less under the plan, it becomes more and more pointless to have the program…I want my check, don’t know about the rest of you guys… [/quote]
Under any calculation under the current conditions, benefits will be cut – your “check” that is, will get smaller. Without any private accounts. And your taxes will go up. Some other fixes will be necessary (as I said above, most notably the inflator will need to be changed to reflect increases in cost of living (the CPI) rather than increases in purchasing power and overall economic growth).
This is aside from the fact that all the plans for private accounts that have been proposed allow the individual to choose whether to invest a very small percentage of his SS taxes into private accounts – he can choose to invest up to the limit, or none at all, and get his check.
[quote]100meters wrote:
anyway where were we? oh yes Delay…[/quote]
DeLay is going to be just fine, assuming no new information of wrongdoing comes out. THe current stuff will blow over, and he surely won’t lose his seat in Texas.
It really helps to read the plan yourself and not just the DNC talking points.
Most bright folks would rather invest their own money and skip the S.S. tax. Yeah I am pretty sure I could beat 1.8 % over time. Or whatever silly rate of return you were trying to justify.
Hedo, you’re pretty funny, You just breeze right by all kinds of facts and figures. OK, most bright folks don’t support privatization. Out of the 20 largest US companies polled only 2 supported the plan. Huge majorities of americans don’t support it. And hedo its unbelievable that you said it, but under Bush’s “plan” you don’t get to “invest” your own money. The investment choices will be low risk pre-selected basket of options.
The 1.8 percent is the predicted growth rate of the ECONOMY. That dismal prediction is the basis for S.S. going bankrupt in 40 or 50 years.(And you’re questioning my judgement?) You said yourself that throwing money at problems isn’t the solution, yet the president’s plan immediately makes S.S. insolvent due to fact we’ll be throwing trillions of borrowed dollars (and the interest on those dollars) and you think its a good idea? Curious.
As for DNC talking points, It’s the President who says that his plan does nothing to add solvency to S.S. (He’s with the RNC right?) You didn’t major in economics right? Because if you did, you’d know the market does very,very poorly when the economy is growing at 1.8 percent. But perhaps the president is using the worst case scenario to make his case? But in the case that he’s dead wrong (highly likely) S.S. is fine for way more than 50 years, and will be paying out much more in benefits than the president’s “plan”.
If the president is right, well in 40 years or so S.S. will still be paying out much more than a privatized plan (If the economy grew at an avg of 1.8 percent for the next 40 years, then DAMN the returns on those privatized portions in the stock market would be DISMAL, plus paying back the interest on the money we borrowed to invest—you didn’t major in economics right?)
100 of course I didn’t major in economics. I studied Finance. Economics is for guys like you…theorists not people who actually make deals and run companies. Just as an aside I probably took economic lectures from folks that wrote the textbooks you used in college.
Your theory is comical son.
We have already established that you think I am funny and I think you are insignificant and silly. No need to keep berating the point. Maybe you have a need to but I don’t. Besides rearead this thread. Your relevance has been established by smarter men then I.
I guess you travel in different circles then I. Most of the folks I know in the investment and banking fields would love to invest all of their own money and skip S.S. entirely. But then again we don’t support the party of entitlements.
If you can put together a real argument other then trying to make leap of faith conjectures let me know.
Can you please just try factually debunking me? No, and a tip—s.s. wasn’t really designed to make those in the investing and banking fields richer, it’s more of an insurance policy[/quote]
You are an idealogue, you have already mad up your mind. You are also an absolutist meaning you will never change your position.
You don’t get it kid. I don’t view this as a debate with you. It’s just a forum to expose the liberal fallacies.
But if you ever want to debate, rationally. Start with facts. Admit you don’t know everything and open your mind. Otherwise don’t confuse my lack of response with defeat. It’s just boredom.
S.S. an insurance policy. Was that FDR’s intent. Certainly has changed hasn’t it. If I don’t want it then why should I be forced to accept it?
[quote]Joe Weider wrote:
hey 100meters, why the fuck don’t you answer my questions once? What about Pelosi? What about Reid? What about these real ethics problems?
[/quote]
Hold on!,I only get a few moments to post while at work…I’m trying to look into these “real ethics problems”…
[quote]rainjack wrote:
100meters wrote:
Can you please just try factually debunking me? No, and a tip—s.s. wasn’t really designed to make those in the investing and banking fields richer, it’s more of an insurance policy
HORSE SHIT!!
Originally it was supposed to be an insurance policy. It was never intended to be the leech it has become.
It is now socialized retirement, thanks to New Deal/Great Society democrats. And if you think for a second that folks drawing it don’t count it a pension, you are wrong.
Everyone that paid in is supposed to get what they paid in and more. Isn’t that how investing is supposed to work? I think so.
As for Bush’s ulterior motive of dis-mantling S.S. - the sooner the freakin better. I effectively pay 40% in tax on the last dollar I earn.
If Soc Sec is insureance, when do I get a fucking benefit from it? Fucking FDR - I hoe he’s choking in his grave.
[/quote]
You don’t know how and when S.S. provides benefits?
The program is already technically insolvent – it just won’t happen in terms of actual cash flow for quite awhile. Letting currrent workers keep some of their own money works to simply accelerate to the cash flow what is already true of the program in general.
100meters wrote:
3.We do have to “borrow” money to make up the differences of the portions invested in private accts. This will be trillions of dollars. Paying back the trust fund will still be a given. Gov. pays back current debt. Gov. pays back trillions of dollars of new debt to make up difference in missing money going into pvt. accts. plus compounding interest on loans. Administrative fees. All subtracted from measly returns on safe govt. chosen investments. (maybe they’ll get 5%? maybe?)
No NEW money would be borrowed – the money is already being borrowed from the current workers to pay benefits to the current retirees – whose money was “borrowed” to fund such boondoggles as The Great Society. The source of the borrowing would simply have to be different.
THe government already issues T-bills for this borrowing – it won’t pay any more in interest than it already is.
As to the return, a “safe” index stock fund (Wilshire 5000) for a 30-year-old would return a real, inflation-adjusted 6.8% if you use historical rate of return. A diversified bond fund, same assumptions, should be less than that, but a couple points higher than the historical risk-free rate of 3% on government T-bills. A mix should be between those two, depending on how the investor weights his portfolio. So the difference would be to the benefit of the individual – and it would compound, which, as you are well aware, makes it a huge difference over time.
See this article by FactCheck.org on how the Dems are using false assumptions in their web calculator to scare investors into thinking they will lose under a private account plan:
100meters wrote:
4. Yes Bush lied about the “Lockbox” and the taxcuts. Privitizing doesn’t fix any of the problems you mentioned. If Bush wants to borrow money, he’ll borrow it. Just like Bush borrows from the “charade” every day. A better plan would just have a president that keeps his word, or instead of faking his enormous deficit numbers with s.s. surplus money borrow from somewhere else.
It wasn’t Bush who starting the borrowing from the Social Security “Trustfund” – using that term is a joke. A trustee would be tossed in jail for violation of his fiduciary duties if he treated the principal in a trust account as his personal spending source, covered by IOUs. I’m not going to look it up right now, but I believe it was LBJ who decided to put Social Security into the general budget – in order to cover the true cost of his Great Society programs. And it has been going on ever since – through Nixon, Ford, Carter, Reagan, Bush 41, Clinton and Bush 43.
100meters wrote:
5.Odds are incredibly good that not a damn thing needs to be done. Or as I keep saying IF Bush is right and S.S. goes “bankrupt” then it means the economy averaged 1.8 percent growth, and nobody can explain why in the holy hell would you want your money in the market!?----You would be shit out of luck with your privatized portion! Or you’d be getting a sweet 70% of your guaranteed benefit which would be much more than retirees currently get by just leaving S.S totally alone in the absolute worst case scenario.
No, they aren’t. See this article by FactCheck.org, in response to those ridiculouse ads being run by the AARP:
100meters wrote:
Privatization is basically a foot in the door to dismantling S.S., because as people get less and less under the plan, it becomes more and more pointless to have the program…I want my check, don’t know about the rest of you guys…
Under any calculation under the current conditions, benefits will be cut – your “check” that is, will get smaller. Without any private accounts. And your taxes will go up. Some other fixes will be necessary (as I said above, most notably the inflator will need to be changed to reflect increases in cost of living (the CPI) rather than increases in purchasing power and overall economic growth).
This is aside from the fact that all the plans for private accounts that have been proposed allow the individual to choose whether to invest a very small percentage of his SS taxes into private accounts – he can choose to invest up to the limit, or none at all, and get his check.
100meters wrote:
anyway where were we? oh yes Delay…
DeLay is going to be just fine, assuming no new information of wrongdoing comes out. THe current stuff will blow over, and he surely won’t lose his seat in Texas.[/quote]
The program is NOT technically insolvent in any way! Despite the fact the Trust Fund is borrowed the program is currently running HUGE surpluses and will be for the foreseeable future. You also keep missing the greater point of will S.S. go “bankrupt” in the first place. In 1994 the projected date was 2029.(35 yrs out).It’s now 2042 (38yrs out).
Your repeating the unsupported claims of David Brooks and even WP editorials, Reality: CBO’s analysis of Plan2 the likely blueprint for Bush’s plan shows 1 to 2 trillion will be needed to cover transition costs. It would require an additional 3 trillion in the next decade, 5 in the next decade, and 5 in the next. Under this scenario the deficit wouldn’t be balanced till 2050(If privatization meets it’s best case scenario—which is a provable pipe dream) The net effect is it would still pay less than the “insolvent” current plan. Even Cheney has admitted we’ll be borrowing more money.
First if your right about the returns, then this debate is over. For returns to have avg. 6.8% in the wil 5000, we can assume that productivity grew more than the predicted(much,much more) 1.8 percent projected in the doomsday scenario. And S.S. would be running HUGE surpluses–absolutely Huge!
But for you to be right, wow, alot of things have to change. First historically market returns closely follow GDP growth, which is obviously projected to decrease. Secondly returns of 7 percent were possible because of low PE rations, about 14.5 to 1 over the last 70 years. It’s now 20 to 1. With a 60 percent payout ration you get a dividend yield of 4 percent on the 14.5/1 PE and only 3 percent with the 20/1 PE, and of course less and less as the PE continues to rise. This means profits have to grow 3.5-4 percent and the economy would have to continue to grow at 4.5-5 percent FOREVER! Base on the projections used market returns will be less than 5 percent. Privatizers are exaggerating market returns—wildly.
Also the Factcheck article has already–obviously been debunked. The article actually internally contradicts itself on “cuts”. They critique the ad for comparing projected benefits under current law to projected benefits under plan 2(the most likely scenario) and then proceed to commit the exact same “error” here:?current law will force an actual cut in benefits eventually.? Hilarious isn’t it? Worse the fact is benefits will grow substantially between now and 2042 so this :all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042 is also false since the benefit will still be higher than todays(using their own logic). Further if this 27 percent decrease is a “cut” then plan 2 causes a 46 percent “cut”----hence the ad is accurate.
I guess your missing the point on Bush and the lockbox, the point would be accountability?
2/27/01 - [Bush] "...To make sure the retirement savings of America?s seniors are not diverted into any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security and for Social Security alone..."
10/3/00 - [Bush]: "...The revenues exceed the expenses in Social Security to the year 2015, which means all retirees are going to get the promises made. So for those of you who [Gore] wants to scare into the voting booth to vote for him, hear me loud and clear: A promise made will be a promise kept..."
3/22/01 - [Bush] "...For years, politicians in both parties have dipped into the Trust Fund to pay for more spending. And I will stop it..."
I don’t know, I guess it’s funny that some believed it then…
Also could you be thrown in jail for questioning the ability of the U.S. to repay it’s debt? I’m pretty sure that’s in the ol’ constitution that the President swore to uphold, but meanwhile he keeps saying worthless IOU’s…and meanwhile a large part of his family fortune is in “worthless IOUs” kind of weird.
The program is NOT technically insolvent in any way! Despite the fact the Trust Fund is borrowed the program is currently running HUGE surpluses and will be for the foreseeable future. You also keep missing the greater point of will S.S. go “bankrupt” in the first place. In 1994 the projected date was 2029.(35 yrs out).It’s now 2042 (38yrs out). [/quote]
So what you’re telling me is that the projection is that in 2042 Social Security will no longer be taking in an amount of money equal to what it needs to pay out.
At that time, Social Security will have to cash in its U.S. Treasury bonds, on which the government will have to pay its interest – the same interest it will have to pay if the government has to issue Treasury bonds to fund private accounts now, accumulating at the same rate.
According to the assumptions of the Social Security Administration’s chief actuary, the current system can pay out full benefits it has promised until the year 2042, when the “Trust Fund” will be exhausted. Without any tax increases, Social Security can still continue to pay 73 percent of promised benefits, though that figure would fall each year thereafter, reaching only 68 percent by 2078.
The Congressional Budget Office predicts Social Secrurity won’t find benefits exceeding taxes until 2020, two years later than the actuary predicts. CBO also projects that the “Trust Fund” will last an additional 10 years, drying up in 2052. At that point CBO forecasts that the system can pay 78 percent of what beneficiaries are owed under current law.
While this isn’t “bankruptcy” in a business or legal sense, this is only because the government isn’t a business and exempts itself from rules protecting creditors. When you cannot cover your liabilities when they come due, “bankrupt” seems an apt general word for the description.
[quote]100meters wrote:
Your repeating the unsupported claims of David Brooks and even WP editorials, Reality: CBO’s analysis of Plan2 the likely blueprint for Bush’s plan shows 1 to 2 trillion will be needed to cover transition costs. It would require an additional 3 trillion in the next decade, 5 in the next decade, and 5 in the next. Under this scenario the deficit wouldn’t be balanced till 2050(If privatization meets it’s best case scenario—which is a provable pipe dream) The net effect is it would still pay less than the “insolvent” current plan. Even Cheney has admitted we’ll be borrowing more money. [/quote]
You completely glossed over the point, which I am assuming you understand. It’s not new borrowing. It’s the same borrowing from a different source. Right now, they are borrowing the money from the surplus Social Security taxes, and they are giving back Treasury Bills. If they needed to get the money now, they would sell Treasury Bills. Same thing.
[quote]100meters wrote:
First if your right about the returns, then this debate is over. For returns to have avg. 6.8% in the wil 5000, we can assume that productivity grew more than the predicted(much,much more) 1.8 percent projected in the doomsday scenario. And S.S. would be running HUGE surpluses–absolutely Huge!
But for you to be right, wow, alot of things have to change. First historically market returns closely follow GDP growth, which is obviously projected to decrease. Secondly returns of 7 percent were possible because of low PE rations, about 14.5 to 1 over the last 70 years. It’s now 20 to 1. With a 60 percent payout ration you get a dividend yield of 4 percent on the 14.5/1 PE and only 3 percent with the 20/1 PE, and of course less and less as the PE continues to rise. This means profits have to grow 3.5-4 percent and the economy would have to continue to grow at 4.5-5 percent FOREVER! Base on the projections used market returns will be less than 5 percent. Privatizers are exaggerating market returns—wildly.[/quote]
To justify their lowball 3 percent figure, the calculator’s authors state that it is “the same assumption used by the CBO for its Social Security analysis.” That’s not entirely true.
It’s a fact that the Congressional Budget Office did publish a study of a proposed system of individual accounts in which it used a “risk-adjusted” figure of 3 percent for one part of its analysis. But in another part of the same study the CBO assumed that stocks would return an average of 6.8 percent. A series of 500 different computer simulations of possible future outcomes showed a very low likelihood that actual future returns would be as low as 3 percent, and a decent probability that returns would be even better than 7 percent.
The “risk-adjusted” figure is an arcane concept that we won’t attempt to dissect here, except to say that it is essentially equal to the expected return on risk-free, interest-bearing Treasury securities. And by using that figure in one set of calculations, CBO was not predicting stock gains of a measly 3 percent over inflation. That would be a massive turn for the worst in the economy.
Just to be sure about that, we checked with the CBO’s director, Douglas Holtz-Eakin:
FactCheck.org: Does CBO's use of a 3 percent "risk-adjusted" figure constitute a prediction by CBO that equities (stocks) will return only 3 percent in the future?
Holtz-Eakin: That's the way its been portrayed. That's wrong. We assume that equities will return 6.8 percent in the future. [/i]
[quote]100meters wrote:
Also the Factcheck article has already–obviously been debunked. The article actually internally contradicts itself on “cuts”. They critique the ad for comparing projected benefits under current law to projected benefits under plan 2(the most likely scenario) and then proceed to commit the exact same “error” here:?current law will force an actual cut in benefits eventually.? [/quote]
No, FactCheck is exactly right. If nothing is done, then Social Security will not have the money to pay out the current level benefits in the future. See above.
Benefits are currently adjusted according to a formula that was supposed to approximate inflation, but it actually overstates the rate of inflation and measures productivity growth. Basically, it adjusts for rising wages rather than rising prices.
So generally, when “current benefits” are referenced w/r/t projections, they mean today’s level, calculated with the current SS inflator. THis is one reason why one step to addressing the insolvency problem should definitely involve changing the inflator to a measure the better captures actual cost-of-living increase.
What the FactCheck article is criticizing is the ads building in the fix in their critique of private accounts, and calling it a cost of private accounts. It’s not a cost of private accounts. It’s a cost of fixing the Social Security inflator – and the cost is measured in their ads by the difference between current projections and projections fixed so as to reflect only the raise in the cost of living.
[quote]100meters wrote:
Hilarious isn’t it? Worse the fact is benefits will grow substantially between now and 2042 so this :all benefits would have to be cut 27% when the Social Security Trust Fund is exhausted in the year 2042 is also false since the benefit will still be higher than todays(using their own logic). [/quote]
Yes, benefits will “grow” under current law because of the bad Social Security inflator. If that inflator is not fixed, then the benefits SS is paying at that time – which are the benefits of today plugged into the SS inflator – will have to be cut by over 1/4.
The amount of money someone who is receiving a Social Security check would receive would fall by over 1/4 at that time.
[quote]100meters wrote:
Further if this 27 percent decrease is a “cut” then plan 2 causes a 46 percent “cut”----hence the ad is accurate. [/quote]
No. Again, the ad attributes the cost to private accounts. It’s not a cost of private accounts. It’s a difference in projected benefits under two different inflators, and that difference is the “cost” of making the inflator reflect cost of living. It has nothing to do with private accounts. Nothing at all.
ADDENDUM:
This is how private accounts would likely work:
How Private Accounts Would Work
February 4, 2005 12:09 p.m.
1: Worker diverts up to 4% of wages into private account, with a $1,000 limit that rises each year.
2: Worker puts money in stock or bond mutual funds.
3: At retirement, government reduces traditional Social Security monthly benefit to reflect taxes diverted to private accounts. Here’s how:
? Add up contributions to private account and what they’d earn if invested at 3% on top of inflation
? Estimate what that total would provide monthly if paid over retiree’s life
? Subtract that sum from monthly government benefit
4: A retiree comes out ahead if personal account earns more than 3% on top of inflation. Retiree is worse off if returns are less than that.
5: Worker can use private account at retirement to spend, save or bequeath.
Note: Mr. Bush proposes additional across-the-board reductions in Social Security benefits from those promised in current law, but hasn’t spelled out details.
Source: White House
Notice the Note – that references the re-calibration of the Social Security Inflator, and other possible fixes – all of which have nothing to do with private accounts. That’s why people are saying private accounts wouldn’t fix the SS shortfall – because this stuff that would is not part of the private accounts. What private accounts have the potential to do is to increase people’s returns above whatever level the government sets its base payments.
Also, another small note: At some point (at retirement most likely) the owner would likely be forced to turn at least part of his private account into an annuity that, combined with whatever normal payment to which he was entitled from SS, paid enough to keep a person above the poverty line – thus only returns above that would be “kept” and could be willed or otherwise used.
[quote]100meters:
I guess your missing the point on Bush and the lockbox, the point would be accountability?
2/27/01 - [Bush] "...To make sure the retirement savings of America?s seniors are not diverted into any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security and for Social Security alone..."[/quote]
It does – in politician speak. At that time, he was protecting it the same way Gore had promised to protect it: By not doing anything differently than before.
This isn’t to defend doing nothing – it needs to be fixed.
I’m sorry, but you’ll have to provide some more detail here to even elucidate what the point was – namely, what was Gore’s claim?
[quote]
3/22/01 - [Bush] “…For years, politicians in both parties have dipped into the Trust Fund to pay for more spending. And I will stop it…” [/quote]
And that’s exactly what he’s trying to do now by addressing the issue.
[quote]100meters wrote:
I don’t know, I guess it’s funny that some believed it then…
Also could you be thrown in jail for questioning the ability of the U.S. to repay it’s debt? I’m pretty sure that’s in the ol’ constitution that the President swore to uphold, [/quote]
No. Not that I’ve ever seen or heard anyway.
[quote]100meters wrote:
but meanwhile he keeps saying worthless IOU’s…and meanwhile a large part of his family fortune is in “worthless IOUs” kind of weird.[/quote]
I’m assuming you’re guessing his family holds T-bills? Which is probably right – though I would kind of doubt “large part” – but anyway, the T-bills aren’t worthless IOUs. The promises that benefits can be maintained at current levels while the government gives a crappy rate of return on the current excess is the worthless IOU.
To step away from the hi-jack on Social Security for a moment, here’s the latest w/r/t Mr. DeLay’s foreign-travel issues – as I said, unless something else comes out, this will blow over:
Luxury Travel Could Trip Up DeLay
Journeys to London and Russia
May Have Been Underwritten by a Lobbyist
By DAVID ROGERS
Staff Reporter of THE WALL STREET JOURNAL
April 13, 2005; Page A4
Times have been good at the National Center for Public Policy Research since Republicans captured the House in 1994: Annual contributions have quadrupled to more than $6 million, and the wife-husband team that runs the conservative nonprofit foundation is paid combined salaries of $275,000, according to recent tax filings. After investing millions of dollars in direct mail, the Center boasts a donor base of near 75,000.
“The National Center is THE CENTER for conservative communications,” says an endorsement from House Majority Leader Tom DeLay on the organization’s Web site.
Yet for all this success, the Center and Mr. DeLay are on the defensive these days, accused of sacrificing their conservative message for the fast money and favors of Washington. Each came of age in the Ronald Reagan-dominated years of the early 1980s. Both are haunted by a very different Republican from California: lobbyist Jack Abramoff, a former director and fund-raiser for the Center and political ally of Mr. DeLay.
Mr. Abramoff was Mr. DeLay’s travel companion on trips in 1997 and 2000 to Russia and London, both paid for by the Center. The Center, the congressman and lobbyist had a shared interest in the trips. The Center, which sponsored the travel, got to promote its agenda with a powerful Republican lawmaker. Mr. Abramoff got to travel with the congressman in a manner that wouldn’t be permitted if his lobbying clients – rather than the Center – were paying directly. And Mr. DeLay and his wife traveled in luxury not possible on traditional taxpayer-financed congressional delegations.
For example, House records show that for the London trip, Mr. DeLay’s office filed reports listing $70,259 in transportation, hotel and meal bills paid by the Center – $28,100 for Mr. DeLay and his wife and $42,159 for his chief of staff and her husband, as well as a second aide who was on at least part of the trip.
The Center says it paid the bills for the London trip from general donations, while the Russia trip was covered from an estimated $165,000 payment from an international law firm seeking to promote exchanges with Russian businessmen. Lobbying records filed with Congress and the timing of donations to the Center indicate Mr. Abramoff may have used the nonprofit group to cloak payments from his clients to pay for Mr. DeLay’s trips, thus circumventing the House ban on lobbyist-financed travel.
The controversy is heightened by the fact that federal prosecutors are investigating whether Mr. Abramoff, a major source of campaign funds for Republicans including Mr. DeLay, overbilled his Indian-tribe clients.
Through his attorneys, Mr. Abramoff has denied any wrongdoing. Tax filings and the Center’s account to The Wall Street Journal indicate that Mr. Abramoff directed money to be moved from his law firm to the conservative think tank; the Center, in turn, made grants to a second nonprofit group Mr. Abramoff controlled and used for his political and personal priorities. The Center says it made the grants, totaling $700,000, for a legitimate purpose. The Senate Finance Committee has begun an inquiry into whether tax rules for charitable foundations were violated.
When asked about Mr. Abramoff’s activities with the Center, a spokesman for Mr. Abramoff said the Center “is a real organization that is allowed and did properly support congressional trips. Any funds that Mr. Abramoff or any of his clients contributed to [the Center] were therefore properly used to support the work and activities of the Center.”
Having risen together, Mr. DeLay and the Center could fall together – but neither will go down easily. Meeting with Senate Republicans yesterday, Mr. DeLay downplayed the controversy swirling around him as “old.” As House majority leader, Mr. DeLay is less vulnerable than past House Speakers, including Democrat Jim Wright of Texas and Republican Newt Gingrich of Georgia, whose ethics problems contributed to their downfall.
That is because speakers are elected by the full House, including members of both parties. Any erosion in a speaker’s base can be fatal because it is compounded by resistance from the opposition party. By comparison, majority leaders are subject only to their own party. While many Republicans privately wince at what they see as Mr. DeLay’s take-no-prisoners style of politics, they also respect him as a defender of his party.
The Center shows no sign of backing away from Mr. DeLay, and if anything, their joint defense rests on the claim that the think tank had strong ties to the congressman independent of Mr. Abramoff. “We know Tom directly, we don’t know Tom through Jack [Abramoff],” says Center President Amy Ridenour, a 45-year-old activist and longtime friend of the congressman’s former chief of staff, Susan Hirschmann. Established in 1982 – just two years before Mr. DeLay’s arrival in Congress – the Center is a networking and information source for conservatives, sending out postcards with talking points on issues, disseminating op-ed articles and running its Web site.
Mr. DeLay has said he prefers to have private sponsors such as the Center, rather than official Congressional delegations, when he travels abroad, but the practice opens the door to problems for him. If Mr. Abramoff or his lobbying clients paid for the trips – and Mr. DeLay knew about it – that would violate House ethics rules prohibiting lobbyist-paid travel. If Mr. DeLay’s office asked the Center to help arrange the trip, that would violate House gift rules.
By Ms. Ridenour’s and the Center’s account, the Russia trip in the summer of 1997 stemmed from a contribution to them by the Washington office of the law firm Cadwalader, Wickersham & Taft LLP. A Cadwalader spokeswoman said yesterday, “The firm is investigating these allegations and has no further comment.” According to the Center, the chief contact was attorney Julius Kaplan, who has left Cadwalader and declined to comment on where the money originated.
Mr. Kaplan has been associated with principals in Naftasib, a Russian energy company that helped host the American visitors in Moscow. In early 1997, Mr. DeLay hosted Russia Prime Minister Victor Chernomyrdin in Washington and his Houston-area energy background was of interest to the Russians. On July 18, 1997 – before the trip – the congressman’s staff in Houston helped arrange a meeting between local firms and Alexander Koulakovsky, the general manager for Naftasib.
Mr. Abramoff was working at the time at Preston Gates Ellis & Rouvelas Meeds LLP, which also helped plan the Russia trip. The firm had a common client with Mr. Kaplan: Chelsea Commercial Enterprises Ltd., a company that was registered in the Bahamas. According to Russian news reports, the company was backed by Russian business interests. The Center says Mr. Kaplan and Cadwalader took the lead on the trip, and the Center was given freedom to shape the project and decide whom to invite.
In addition to backing the Russian trip in which Mr. DeLay, Mr. Abramoff and Ms. Ridenour all participated, the Cadwalader funds also helped pay for an earlier delegation to Russia that included journalists and an assortment of conservatives with foreign-policy expertise. Russian business executives participated in the exchanges. Ms. Ridenour says the motives behind the trips were more than commercial, and that the Russian business leaders hoped to enhance their personal security in Russia by being seen with prominent Americans.
Mr. Abramoff became a director of the Center in October 1997. On the trip to London in 2000, Ms. Ridenour stayed home because of a pregnancy, and Mr. Abramoff had a major role in arranging the outing – including a golf excursion at St. Andrews in Scotland. Ms. Ridenour confirms that Mr. Abramoff’s Indian and gambling clients made two $25,000 donations to the Center just before the London trip. The travel, she says, wasn’t the product of outside money but more conversations between herself and Ms. Hirschmann.
The Center’s involvement in promoting conservative causes with minorities encouraged Ms. Ridenour’s interest in Mr. Abramoff’s Indian-tribe clients.
Ms. Ridenour says she was “very impressed” with what the Mississippi Band of Choctaw Indians, an Abramoff client, had done to improve its people’s welfare and preserve tribal culture with casino earnings. She had hoped to sponsor work to advance the same cause, and for a period Mr. Abramoff directed money to the Center, which then issued grants to his nonprofit charity, the Capital Athletic Foundation LLC. CAF’s 2002 tax filings show that its chief mission was financing a Jewish school in suburban Maryland.
Ms. Ridenour says the turnaround time from when the money came in to when it went out was sometimes brief, and a lack of information finally led her to end participation after the spring of 2003.
April 13, 2005, 10:14 a.m.
Fitting the Bill?
How would Clinton have saved Social Security?
By Kevin A. Hassett & Maya MacGuineas
One sidelight of President George W. Bush?s recent trip to Rome for the funeral of the pope was the apparently warm interaction between Presidents Bush and Clinton. In particular, Bush praised Clinton?s thinking in the area of Social Security. This praise focused the public eye on an underappreciated fact. President Clinton devoted an enormous amount of effort to the study of Social Security reform. It may well be the case that Social Security reform would have been accomplished if impeachment had not taken over the agenda.
With that in mind, it is instructive to wind back the clock and look at how Social Security reform played out back then, and compare it to the current episode.
The statement that the Social Security system faces a long-term crisis has been met with cries of protest, but during his presidential tenure, Clinton made the same point. Just as Bush has made Social Security his number one domestic agenda item today, President Clinton put the issue ahead of all others with his ?Save Social Security First? campaign. And like Bush, who is a champion of individual investment accounts, Clinton considered accounts a central component of reform. It is likely that this view, combined with the strong support of congressional Republicans for personal accounts, would have set the stage in the late 1990s for a grand bargain on Social Security.
Clinton?s 1994-96 Advisory Council on Social Security, which was arguably less stacked than the one Bush appointed, concluded that actuarial balance was not a strong enough goal. Instead they set forth the standard that the ratio of the trust fund to benefits needs to be flat or growing at the end of the 75 year period ? a goal that is basically mirrored in President Bush?s objective of ?sustainable solvency.? But today, reform opponents want to stop the clock at 75 years.
Furthermore, all three factions of the Clinton panel supported a reliance on equity investments at least in part, a practice that current opponents of personal accounts argue is too risky. The panel members disagreed on whether investment should be made by individuals or centrally through the trust funds, with a majority supporting individual accounts. As Douglas Elmendorf, Jeffrey Liebman, and David Wilcox, all veterans of the Clinton administration, remark in their paper, ?Fiscal Policy and the Social Security Policy During the 1990s,? ?the idea of individual accounts had, in a few short years, made a remarkable transition from the white papers of libertarian think tanks to the mainstream policy debate.? Such an acknowledgment should help to dampen accusations that accounts are little more than a right-wing conspiracy.
The Clinton administration was quite serious about personal accounts and made significant inroads in figuring out how they might work. Experts within the administration investigated in great detail options to minimize both the risks and the costs of creating accounts. Their work provided a number of important and interesting contributions in the policy arena. For example, one challenge in structuring accounts is the timeliness in which deposits can be made. The working group at the Clinton Treasury developed a plan whereby deposits could be made based on previous years? earnings and reconciled later. They also developed a model where workers could make their investment choices on their annual tax forms. Another option they looked at to minimize costs was to not allow any level of investment choice until an account balance reached a minimum amount, an idea that has since become popular in a number of more developed account-based plans. While they recognized that new risks would be introduced by investing in stocks, as the paper reports, ?On balance, however, the economic team did not think that market risk was a sufficiently important concern to rule out plans that involved equities.?
It is important to note that these accounts would have been supplemental ? though analyzing the impact of this is impossible without knowing how the rest of Social Security would have been balanced. (For more on this see ?Hung Up on Words.? http://nationalreview.com/nrof_hassett/hassett200503180819.asp ) There is one more similarity. Many opponents of Social Security reform continue to comment on how the real problem is Medicare. (Though few of them have actually proposed anything constructive to fix Medicare.) That is true today just as it was true when the Clinton administration pursued Social Security reform. However that does nothing to undermine the argument that Social Security needs to be fixed ? in fact, it makes the argument stronger.
If a patient has been bitten by a rabid animal, you fix the cut and then you give him medicine. You need to start somewhere. Fixing the cut first is not a sign that you plan to withhold medicine in the future. The Clinton administration recognized this without setting off alarms on the editorial pages. Bottom line: Fixing Social Security is just as important today as it was when Clinton wanted to tackle the job ? more so, in fact, since years have elapsed.
Given how many areas of agreement there were in the Clinton ?90s on Social Security reform, one would think the possibility for broad-based bipartisan compromise would still exist today. To be sure, the fiscal environment has changed dramatically, making the options more difficult. But the underlying problems facing Social Security remain. Perhaps the rhetorical hugs in Rome can serve as the starting point for turning those many points of agreement into a bipartisan plan.
? Kevin A. Hassett is director of economic-policy studies at the American Enterprise Institute. Maya MacGuineas is the director of the fiscal-policy program at the New America Foundation.
[quote]BostonBarrister wrote:
rainjack wrote:
Thanks BB. What kind of spin doctoring will transpire now in order for 100M to dismiss all of these quotes?
Here’s another good one that delves into the old Clinton positions:
April 13, 2005, 10:14 a.m.
Fitting the Bill?
How would Clinton have saved Social Security?
By Kevin A. Hassett & Maya MacGuineas
One sidelight of President George W. Bush?s recent trip to Rome for the funeral of the pope was the apparently warm interaction between Presidents Bush and Clinton. In particular, Bush praised Clinton?s thinking in the area of Social Security. This praise focused the public eye on an underappreciated fact. President Clinton devoted an enormous amount of effort to the study of Social Security reform. It may well be the case that Social Security reform would have been accomplished if impeachment had not taken over the agenda.
With that in mind, it is instructive to wind back the clock and look at how Social Security reform played out back then, and compare it to the current episode.
The statement that the Social Security system faces a long-term crisis has been met with cries of protest, but during his presidential tenure, Clinton made the same point. Just as Bush has made Social Security his number one domestic agenda item today, President Clinton put the issue ahead of all others with his ?Save Social Security First? campaign. And like Bush, who is a champion of individual investment accounts, Clinton considered accounts a central component of reform. It is likely that this view, combined with the strong support of congressional Republicans for personal accounts, would have set the stage in the late 1990s for a grand bargain on Social Security.
Clinton?s 1994-96 Advisory Council on Social Security, which was arguably less stacked than the one Bush appointed, concluded that actuarial balance was not a strong enough goal. Instead they set forth the standard that the ratio of the trust fund to benefits needs to be flat or growing at the end of the 75 year period ? a goal that is basically mirrored in President Bush?s objective of ?sustainable solvency.? But today, reform opponents want to stop the clock at 75 years.
Furthermore, all three factions of the Clinton panel supported a reliance on equity investments at least in part, a practice that current opponents of personal accounts argue is too risky. The panel members disagreed on whether investment should be made by individuals or centrally through the trust funds, with a majority supporting individual accounts. As Douglas Elmendorf, Jeffrey Liebman, and David Wilcox, all veterans of the Clinton administration, remark in their paper, ?Fiscal Policy and the Social Security Policy During the 1990s,? ?the idea of individual accounts had, in a few short years, made a remarkable transition from the white papers of libertarian think tanks to the mainstream policy debate.? Such an acknowledgment should help to dampen accusations that accounts are little more than a right-wing conspiracy.
The Clinton administration was quite serious about personal accounts and made significant inroads in figuring out how they might work. Experts within the administration investigated in great detail options to minimize both the risks and the costs of creating accounts. Their work provided a number of important and interesting contributions in the policy arena. For example, one challenge in structuring accounts is the timeliness in which deposits can be made. The working group at the Clinton Treasury developed a plan whereby deposits could be made based on previous years? earnings and reconciled later. They also developed a model where workers could make their investment choices on their annual tax forms. Another option they looked at to minimize costs was to not allow any level of investment choice until an account balance reached a minimum amount, an idea that has since become popular in a number of more developed account-based plans. While they recognized that new risks would be introduced by investing in stocks, as the paper reports, ?On balance, however, the economic team did not think that market risk was a sufficiently important concern to rule out plans that involved equities.?
It is important to note that these accounts would have been supplemental ? though analyzing the impact of this is impossible without knowing how the rest of Social Security would have been balanced. (For more on this see ?Hung Up on Words.? http://nationalreview.com/nrof_hassett/hassett200503180819.asp ) There is one more similarity. Many opponents of Social Security reform continue to comment on how the real problem is Medicare. (Though few of them have actually proposed anything constructive to fix Medicare.) That is true today just as it was true when the Clinton administration pursued Social Security reform. However that does nothing to undermine the argument that Social Security needs to be fixed ? in fact, it makes the argument stronger.
If a patient has been bitten by a rabid animal, you fix the cut and then you give him medicine. You need to start somewhere. Fixing the cut first is not a sign that you plan to withhold medicine in the future. The Clinton administration recognized this without setting off alarms on the editorial pages. Bottom line: Fixing Social Security is just as important today as it was when Clinton wanted to tackle the job ? more so, in fact, since years have elapsed.
Given how many areas of agreement there were in the Clinton ?90s on Social Security reform, one would think the possibility for broad-based bipartisan compromise would still exist today. To be sure, the fiscal environment has changed dramatically, making the options more difficult. But the underlying problems facing Social Security remain. Perhaps the rhetorical hugs in Rome can serve as the starting point for turning those many points of agreement into a bipartisan plan.
? Kevin A. Hassett is director of economic-policy studies at the American Enterprise Institute. Maya MacGuineas is the director of the fiscal-policy program at the New America Foundation.
[/quote]
Ok, we all remember Clinton analyzed “supplemental” accounts, and that he proposed investing a portion of the trust fund in equity markets…Damn that Clinton had some good ideas. Very sneaky thoses AEI guys he leads you and then at the end…“It is important to note that these accounts would have been supplemental” yep that’s pretty important!
[quote]rainjack wrote:
Thanks BB. What kind of spin doctoring will transpire now in order for 100M to dismiss all of these quotes?[/quote]
Damn I’ve missed all of page 3, I didn’t even see these quotes. Some good quotes B.B. I guess alot of Dems do support the idea of investing portions of the trust fund in the market—I certainly do. I don’t think any spin is needed though?
What’s funny is this line here:
“these Democrats endorsed the idea of personal accounts”
Boy! If none of these people support personal accounts, and their all talking about investing the trust fund, I think that makes that line…a lie? why would they do that, it seems like that would make conservatives think dems were being …oh I get it, that is what they’re doing. At least Rainjack’s all excited that these Dems are all FOR investing portions of the trust fund in the stock market.Funny. Shameless, but funny.
[quote]rainjack wrote:
BostonBarrister wrote:
You keep wanting to talk about Social Security on completely irrelevant threads.
Does anyone have a link to a video, or transcript of Clinton’s speech(es) in which he talks specifically about S.S. going broke?
100M is “faking his own ignorance” wrt Clinton saying the exact same thing that Bush is now saying about S.S.'s solvency, or lack thereof.
[/quote]
I’m not questioning Dems and Repubs are saying insolvent…my point is the projections they are based on…as I’ve pointed out “doomsday” (the day the trustfund runs out) continues to move further and further out. Also I’ve pointed out that the most accurate projections historically have been the optimistic ones, those projections still show surpluses(huge) 50 years from now. That makes this whole discussion pointless. I’m familiar with Clinton’s speech and agreed with his proposal.
The program is NOT technically insolvent in any way! Despite the fact the Trust Fund is borrowed the program is currently running HUGE surpluses and will be for the foreseeable future. You also keep missing the greater point of will S.S. go “bankrupt” in the first place. In 1994 the projected date was 2029.(35 yrs out).It’s now 2042 (38yrs out).
So what you’re telling me is that the projection is that in 2042 Social Security will no longer be taking in an amount of money equal to what it needs to pay out.
[/quote]
I’m asking you what is the likelyhood of productivity growing by 1.8 percent in the next 40 years? If your answer is not likely–then S.S. is fine. If your answer is yes, what do you think market returns would be if productivity grows at 1.8 percent. Please show your math as I’ve done in your effort to produce a return greater than 5 percent on equity returns at a productivity rate of 1.8 percent. (also please start a S.S. thread–everybody likes you, and your posts are great reads–eventhough I disagree with you)
Great posts on Social Security by a couple of you guys, not an issue I know the ins and outs of…but back to Delay. As a conservative, I’m in no rush to jump to the guy’s defense. I tend to agree with Zap Branigan from the first page of this thread. No reason to defend a guy just because he’s from your party; I think Jerry Falwell’s worse than even a RINO like Lincoln Chaffee, or a certified lib like Pelosi.
Moreover, if this (http://slate.msn.com/id/1002713/) is true, then Delay’s war record is the kind of thing that should disqualify someone from public office, particularly as a Republican. And yes, I know the source, but that story has been around for a long time, and I’m kinda inclined to think it’s true. Not a real T-man there.
“I blame Congress over the last 50 to 100 years for not standing up and taking its responsibility given to it by the Constitution. The reason the judiciary has been able to impose a separation of church and state that’s nowhere in the Constitution is that Congress didn’t stop them. The reason we had judicial review is because Congress didn’t stop them. The reason we had a right to privacy is because Congress didn’t stop them.”
Tom Delay to the washington times editorial board.
Oh.
My.
God.
It’s official. Delay is an absolute nut. How in the holy hell can a guy who says things this stupid be a US congressman? Try to believe that Delay can wipe his ass on the constitution, and spit on our founding fathers, and still be supported by some on the right.
[quote]100meters wrote:
It’s official. Delay is an absolute nut. How in the holy hell can a guy who says things this stupid be a US congressman? Try to believe that Delay can wipe his ass on the constitution, and spit on our founding fathers, and still be supported by some on the right.[/quote]
How can mureders, racists and thieves be held in such high regard by the democratic party? Even your #1 guy was impeached. Your hypocrisy is shouting over any message you are trying to convey.
Under intermediate assumptions, we have the problems I discussed above.
Also, a general question on productivity growth: Productivity growth will grow both taxable wages and benefits under the current system with the current SS Inflator, and should essentially cancel itself out as an effect – except that tax rates are capped at $90,000 in current dollars, so shouldn’t higher productivity actually have a greater effect on growth of the problem w/r/t Social Security as is? And wouldn’t the stock and bond markets – i.e. private accounts – would be able to better capture the value of those productivity gains?
[quote]100meters wrote:
“I blame Congress over the last 50 to 100 years for not standing up and taking its responsibility given to it by the Constitution. The reason the judiciary has been able to impose a separation of church and state that’s nowhere in the Constitution is that Congress didn’t stop them. The reason we had judicial review is because Congress didn’t stop them. The reason we had a right to privacy is because Congress didn’t stop them.”
Tom Delay to the washington times editorial board.
Oh.
My.
God.
It’s official. Delay is an absolute nut. How in the holy hell can a guy who says things this stupid be a US congressman? Try to believe that Delay can wipe his ass on the constitution, and spit on our founding fathers, and still be supported by some on the right.[/quote]
I can give you some assumed interpretation of those quotes, which were obviously said in a certain context.
Separation of church and state – it isn’t in the Constitution. It is in current Supreme Court doctrine. In fact, if one is a believer in original intent, I just heard Walter Dellinger (hardly a right-winger) make the argument yesterday the the original intent of the establishment clause was most likely to prevent the federal government from establishing the Anglican church as a national church – the states didn’t want any interference with the establishment of official state churches. [On an unrelated side note, Dellinger also said that the NEA and PBS were likely unconstitutional under conventional 1st Amendment interpretation because they implicitly engage in viewpoint-based (or at least content-based) discrimination – he said he hated that conclusion because he is generally politically and culturally alligned with PBS and the NEA].
The “judicial review” comment was likely short-hand for the current interpretation of judicial review, which is judicial supremacy. Going back historically, the original understanding of judicial review wasn’t nearly so expansive – each branch of government had its own responsibility to interpret the Constitution. The Court served only to solve disputes – cases and controversies – not to presribe certain interpretations. And definitely not to legislate solutions to problems from the bench. Go back and look at the Constitutional history of the Reconstruction period…
Similarly, the “right to privacy” isn’t spelled out in the Constitution. It’s the result of Supreme Court decisions employing the phrase and analogizing to rights that actually are in the Constitution, such as “Search and Seizure.”
There are a lot of things Congress can do to check the power of the courts that they haven’t done in a long time – probably the easiest tool is to control the jurisdiction of the lower federal courts. They can also keep passing laws that parse the meaning of Court decisions, but that generally requires taking a political stand on an issue, and most people in Congress would much rather have courts or agencies make decisions – otherwise they might actually be held accountable by their constituents.
The program is NOT technically insolvent in any way! Despite the fact the Trust Fund is borrowed the program is currently running HUGE surpluses and will be for the foreseeable future. You also keep missing the greater point of will S.S. go “bankrupt” in the first place. In 1994 the projected date was 2029.(35 yrs out).It’s now 2042 (38yrs out).
BostonBarrister wrote:
So what you’re telling me is that the projection is that in 2042 Social Security will no longer be taking in an amount of money equal to what it needs to pay out.
100meters wrote:
I’m asking you what is the likelyhood of productivity growing by 1.8 percent in the next 40 years? If your answer is not likely–then S.S. is fine. If your answer is yes, what do you think market returns would be if productivity grows at 1.8 percent. Please show your math as I’ve done in your effort to produce a return greater than 5 percent on equity returns at a productivity rate of 1.8 percent. (also please start a S.S. thread–everybody likes you, and your posts are great reads–eventhough I disagree with you)
I’m not an actuary, or one given to making probability calculations on 40-year time periods – I would be quite out of my league on that.
However, the Social Security Actuary has come up with a great set of projections, based on a 75-year time horizon – check them out for yourself:
Under intermediate assumptions, we have the problems I discussed above.
Also, a general question on productivity growth: Productivity growth will grow both taxable wages and benefits under the current system with the current SS Inflator, and should essentially cancel itself out as an effect – except that tax rates are capped at $90,000 in current dollars, so shouldn’t higher productivity actually have a greater effect on growth of the problem w/r/t Social Security as is? And wouldn’t the stock and bond markets – i.e. private accounts – would be able to better capture the value of those productivity gains?
[/quote]
First, nobody can come up with the numbers to explain how stocks could reach 5 percent returns on 1.8 productivity. All attempts to do so involve changing market theories.
Secondly,
Keyword: under the intermediated assumptions. Look at the optimistic assumption. Historically, as I’ve pointed out optimistic has won out almost everytime! (pessimistic assumptions have never happened).
My 2 points are:
A. Likeyhood of intermediate assumption low.
B. Inability for market to make gains if
intermediate assumptions are correct.
The reality of this would lead one to reach for a different solution than privatized accts. (If the president was being sincere or honest in his proposal–he is not, as witnessed by his projections for privatized accts where he pulls a deceptive switch on productivity numbers—I think 2.8 or 2.9 percent—B.B. you have to see that bit of deceptiveness)
How do you trust a guy who uses 1.8 to scare you into thinking bankrupt but sells you on privatizing with 2.8?
I’m guessing you know how S.S. would be doing if he used 2.8 for the current plan…Flush with tons of cash!
Last, This is another reminder of priority mismanagement, of all the sectors of S.S., OASDI is in the best shape(The best shape it’s ever been in!), and yet this is the focus?