via Kos
In an ad titled "Courage," the organization Progress for America, which claims to focus on "public policies that improve the lives of every American," but which limits all its recent statements to the sole issue of Social Security reform, offers this text over a photo of FDR signing SS into law:
It took courage to create Social Security [FDR heard in background saying "This Social Security Measure…"]. It will take courage [change to video of GWB signing something] and leadership to protect it…
Forget that in its previous statements PoA’s word of choice for what it wants to do to SS is "revamp," not "protect" …how dare this GWB mouthpiece invoke the image of FDR to sell the dismantling of his signature contribution to the nation. Really, have they no shame at all?
Really, have they no shame at all?
Shame? The Bushies? You’re joking, right?
” Really, have they no shame at all?”
Of course not. And that you and other Dems keep sincerely asking that is why we will continue to lose elections.
I’m all for restoring FDR’s original idea of Social Security–he set the age so high that most people die before they got there. Anyone for 78 as the new retirement age?
Sebastian — Here and I was under the impression that life expectancy for people of retirement age (65 or thereabouts) during FDR’s administration was in the mid-70s.
Sebastian: actually, a lot of the increase in life expectancy between FDR’s time and now was a reduction in infant and child mortality, which did not affect how long people lived once they had become workers. The difference in life expectancy for 65 year olds between 1940 and 1990, for instance, was 2.5 years, hardly earth-shattering.
No WMD’s found after much hallyboo about “immediate threat”
Prescription drug bill costs lied about until after passage.
SS is in “Crisis” and something “must” be done.
See a pattern here? Lies and over-exaggeration.
Democrats need to be pounding on this relenlessly. Equating exaggerations and lies about past initiatives to exaggerations and lies about SS. Bush has a pattern and it can be clearly seen now after four years. Democrats should be all over it.
I’m not exactly adverse to tinkering with SS, but It won’t be bi-partisan with this administration, and I feel SS is an issue where everyone should be on board.
of course I meant ballyhoo…dyslexic me.
I’m all for restoring FDR’s original idea of Social Security–he set the age so high that most people die before they got there.
Fun fact: the retirement age of 65 comes not from FDR but, originally, from Bismarck, who was keen to institute some kind of security net for the poor of the newly-created Germany so that his power would be protected against popular revolt.
Incidentally, Edward, Kevin Drum had a wonderful series on the way in which Bush’s domestic policies have been sold under the rhetoric of the liberal agenda. His basic contention — and I think he’s dead to rights on this — is that Bush’s social agenda* simply doesn’t have enough popularity to pass if he were to simply tell people what he intended to do. The best service progressives can do is to illuminate the discrepancy between words and actions (or intent) so that people will finally cotton on to this fact.
* Which only looks like the conservative social agenda if you squint really hard.
Anyone for 78 as the new retirement age?
Somehow, “Let’s move the country back to the good old days of the Great Depression!” strikes me as less than ideal. The optimists among us believe America can do better than that.
I certainly hope the Bush administration takes up your proposal though. It will make things easier for the Democrats, and it would be at least more honest than the lies about Social Security the administration is currently telling on a daily basis.
via the angry bear.
So moving the age to 78 is a bit of an over-reaction. Besides which, it’s not like the SSA went “DOH” why didn’t we think of that. This is already built into the calculation.
This is knowingly deceptive salesmenship, nothing else.
Bush: “The problem is, is that times have changed since 1935. Then, most women did not work outside the house, and the average life expectancy was about 60 years old — which for a guy 58 years old, must have been a little discouraging. Today, Americans, fortunately, are living longer and longer. I mean, we’re living way beyond 60 years old, and most women are working outside the house. Things have shifted.”
The facts: According to the SSA, the life expectancy for a 65-year-old man in 1940 was 76.9 years. Today, a man aged 65 can be expected to live to 81. Most of the increase in life expectancy in the past half century has been for infants, not for the elderly.
The increase in the percentage of women working outside the home has boosted Social Security’s resources, rather than depleted them. Today, many women who worked receive a widow’s pension rather than their own earned benefits. All the payroll taxes they paid are funding someone else’s retirement
2001: Bush claims proof that Saddam has WMD
-says Iraq supports terrorists
2005: Bush claims Social Security is in crisis
-says young workers will not get retirement benefits
See how the first statements are outright lies, but the 2nd ones are self-fulfilling prophecies?
Ed_
Where can I look up those numbers? You’re absolutely right that infant mortality stats distort the “average lifespan” number sometimes used in this debate.
But you present only half of the answer. The question is how many people get past 65 multiplied by their life expectancy after that point, comparing now vs the earlier generation. Put another way, how many SS man-years the system has to support.
Your comment answers the second question, but I don’t know the answer to the first, and I think that’s a key number in this conversation. A source might help track down the first number.
me – I’ve just spent a fairly fruitless half hour googling around to try and find out what life expectancy at age 18 (or 21) was in 1940 vs. today. No luck so far.
me — I don’t know where to get the numbers, but about your calculation: I think it’s not how many people get to 65 x life expectancy that matters, but how many people who get into the workforce to begin with get to 65 x life expectancy. (Since children who die at 3 are, from the point of view of SS financing, though not from any other point of view, unimportant.)
Why is the left satisfied with a 1% return on investment and a system where participants cannot pass their hard-earned savings to their heirs? Why can federal employees opt out of SS and join a plan that gives them investment options? While calling the current system a “crisis” is an overexaggeration, Edward, so is your calling the proposed plan a “dismantling”.
“The facts: According to the SSA, the life expectancy for a 65-year-old man in 1940 was 76.9 years. Today, a man aged 65 can be expected to live to 81. Most of the increase in life expectancy in the past half century has been for infants, not for the elderly.”
Not a very useful fact. The life expectancy for a non-infant born in 1930 would be a much more useful fact.
The life expectancy for a non-infant born in 1930 would be a much more useful fact.
I’m seriously giggling at this, Sebastian. Could you maybe rephrase it?
Yeah, I know I pressed Post and didn’t bother to log in to change it. The life expectancy in 1940 of someone born in 1930. Therefore non-infant, but a realistic view of how many people get to retirement age.
Thanks 🙂
I think that’s the wrong statistic, however. What we really want, because SS is a pay-as-you-go system, is a measure of the discrepancy between the life expectancy of the elderly as versus the life expectancy of the young. Something like the disparity between LE65 and LE18, which would give more of an indication of the generation of wealth v. disbursement of benefits that FDR et al. had in mind.
Found the (I hope) relevant stats from the SSA website. To summarize from Table 1:
53.9% of men who turned 21 in 1896 made it to age 65 (in 1940). At that point, their average remaining life expectancy was 12.7 years. For women the numbers are 60.6% and 14.7 years.
72.3% of men who turned 21 in 1946 made it to age 65 (in 1990). At that point, their average remaining life expectancy was 15.3 years. For women the numbers are 83.6% and 19.6 years.
So, a man who came of age around the turn of the 20th Century had a little better than even odds of living to retirement age. By mid-century, his odds improved to nearly 3 in 4.
CB: “Why is the left satisfied with a 1% return on investment and a system where participants cannot pass their hard-earned savings to their heirs?”
I can’t speak for the left as a whole, but: I would of course prefer the highest possible rate of return, other things being equal. But they aren’t, and so when I consider Bush’s plan, or what little we know of it, I think: First, according to me our present levels of debt are way too high, especially since we show no signs of stopping running deficits. Therefore, I do not seriously consider any plan which involves trillions of dollars in borrowing. There are a lot of things that I really wish the government would do that I wouldn’t advocate now, since I think we can’t afford them. The sort of plan Bush seems to be going for, which isn’t something I’d normally advocate and which is unaffordable, doesn’t even make it out of the starting gate, as far as I’m concerned.
Second, what matters to me is not that, on average, senior citizens should get the highest possible rate of return, but that there should be a floor below which they cannot sink. This makes me favor an assured benefit, and thus not private accounts. Whether the SS trust fund should invest in stocks rather than bonds is a question I’m open to considering, though I worry, like everyone else, about how they’d choose which stocks, and how they’d avoid market distortions. But private accounts seem like a much less good idea to me.
Third, the best way to ensure a floor beneath one, given private accounts, would be to use them to buy some sort of lifelong annuity. But these can’t be left to one’s heirs in any case, so for lots of people (and specifically the least well off), letting one’s heirs inherit isn’t going to happen anyways. For the rest of us, SS will not be our sole source of support after retirement, and the rest can be left to our heirs.
Fourth, can you point me to one country where something like privatization has actually worked well, and where the higher rates of return haven’t been consumed by broker fees etc.?
I also have lots of smaller worries about more specific proposals, but this should give you a rough idea.
I just saw that Kevin Drum has put up a post on Social Security that I largely agree with.
“how dare this GWB mouthpiece invoke the image of FDR to sell the dismantling of his signature contribution to the nation. Really, have they no shame at all?”
Really, S.S. is just a bad thing that has happened to America for the long term. It may have had a place in it’s day for which we can applaud FDR. But, now many people abdicate their own responsibility. And the gov’t abuses it.
I don’t think FDR would approve of S.S in its current state. I can only think that he also would be abdicating change. Does anyone think that we should just leave S.S. in its current state? Does anyone think that FDR would be happy with S.S in its current state?
It makes us all the weaker as a people for it. It’s unfortunate.
Of coures, it you think FDR would truly approve of S.S. in its current state, then wouldn’t that make him irresponsible as a leader?
(and it was “me” in the previous, non-previewed post)
Drum refers to an article by Longman in Fortune with a crazy, clever idea.
If Social Security is supposed to be a fixed income for an unknown period, how about splitting the difference by reducing the “known” timespan (that which, say, 80% of the population lives to, like 72) and focus Social Security on those extended years that we can’t plan for rationally?
So private accounts (which I agree are just the 401ks etc that we have today) cover us from retirement from working life (65 or so) to the point where we are “expected” to die, then social security covers that extended period after, so that we don’t die destitute.
The clever part of the idea in my mind is that we set two retirement ages. Right now, we have a single retirement age used for managing tax-deferred retirement accounts, private pensions, and social security. Having a working life, a first, term-limited phase of retirement funded by tax-deferred savings, and a second phase (if you live that long) funded by social security has a lot of appeal for me. Does this voice of moderation have appeal for others?
Additional thought: once we accept the idea of two retirement ages, who says they have to be static?
Say someone wants to retire at 62, which is to say start drawing on the tax-deferred account (401k, IRA, etc). We could allow that with the caveat that you can’t take social security until you are 75. That way people could plan their savings around when SS kicks in, and allow the possibility of earlier retirement with tax incentives.
Reverse it – say you stay in the workforce and contribute to payroll taxes until you are 69. You could then start drawing on SS right away, without having to wait until the higher year. The previous few years of work you did would “pay” for your extra few years of drawing on SS.
So we could have a more flexible system that lets people plan with fixed timeframes, incentivizes retirement planning/savings, but doesn’t impose a huge penalty (you just have to work a few more years) for those who don’t.
OK, smlook, would you care to expand on why you think that Social Security “is just a bad thing that has happened to America for the long term”? That’s the sort of statement that, if it came from someone with ties to the administration, would lend credence to the notion that we’re looking at an effort to destroy the program rather than fix it.
Why is the left satisfied with a 1% return on investment and a system where participants cannot pass their hard-earned savings to their heirs? Why can federal employees opt out of SS and join a plan that gives them investment options? While calling the current system a “crisis” is an overexaggeration, Edward, so is your calling the proposed plan a “dismantling”.
Meet exaggeration with exaggeration. If Bush wants to call it a crisis, Democrats should cry from the hills he wants to destroy it and make old people penniless. Fight fear mongering with more fear mongering. Besides, it IS the first step in dismantling it, which is the ultimate republican goal, stated or not.
I wonder how many liberals aren’t exactly opposed to making some changes to SS, but just don’t trust this administration, or just about any republican politician to do it in a bipartisan manner. Bi-partisan in this administration means “my way or the highway”. Or at least that’s my take on it.
Fourth, can you point me to one country where something like privatization has actually worked well, and where the higher rates of return haven’t been consumed by broker fees etc.?
Chile ain’t perfect, but it works pretty well. Surely a little American ingenuity can devise a system that provides partial privatization, funding to current payees and a floor for the disadvantaged.
I wonder how many liberals aren’t exactly opposed to making some changes to SS, but just don’t trust this administration
DING! DING! DING!
We have a winner folks.
This question of trust really annoys the Bush supporters I read…like it shouldn’t be part of the equation for us. But looking back at some of the other times I was asked to put aside my mistrust and assume Bush had the nation’s best interest at heart I find 1) serious lack of commitment to federal funding or state funding solutions for NCLB; 2) no Kyoto replacement plan that passes the laugh test; 3) no energy plan that doesn’t start with ANWR drilling and work its way back to responsible usage (if it ever does); 4) don’t even get me started on WMD; 5) “compassion” that lasts only until his religious right base objects; 6) not one single veto of a spending bill, despite record breaking deficits; and 7) total lack of accountability called for his hand-chosen people despite how royally they screw up.
Where is one supposed to begin to trust this guy?
Speaking as a card-carrying member of the Left: I’d be *happy* to have limited private accounts. However, given the way this administration does ANYTHING, I want them to stay the heck away from this.
Especially given that they appear to be planning to borrow money (AGAIN!) to pay the transition costs. Essentially, they are living high on the hog now, and getting ready to send me (and you) a bill for their irresponsibility.
I’d say, add 2% to the payroll tax, and let them use the TSP that the government employees use in private accounts, and also allow additional contributions. Allow withdrawals for the same reasons that are currently permitted for IRAs.
To actually protect the current system, take the cap off the taxes. Having done this, you might even be able to reduce taxes and still improve the balance. Also, Trust Fund, Lockbox, ’nuff said.
As to why be happy with the 1% return, it also provides disability and survivor benefits. The survivor benefit has saved my butt, even though I’m only 29, it allows me to have one job and still help out my grandmother, otherwise, I’d need two or more jobs, and I’d still have to help her out (that would be quite impossible for me). It has far-reaching, and usually good effects above and beyond the retirement.
“I wonder how many liberals aren’t exactly opposed to making some changes to SS, but just don’t trust this administration”
I guess if we had ever had a Democratic president we would no the answer to that question. But since we have had an unbroken line of Republican presidents for 40 years I guess we will never know. 😉
JerryN,
But, now many people abdicate their own responsibility.
I thought I did…
Really, S.S. is just a bad thing that has happened to America for the long term…
Even my parents did this. It was only well into retirement that they realized their mistake counting on S.S. Call my parents dumb or naive, but I think they were typical of their age.
And the gov’t abuses it.
I don’t there is any reason to go into details about that. I think that could be the one issue we all agree on.
And personally I don’t really have a problem with dismantling S.S. in its current form.
And personally I don’t really have a problem with dismantling S.S. in its current form.
Finally!
Someone willing to admit it.
If we start the discussion there, perhaps, we can build more trust about what is really needed and what is really going on with this issue.
Chile ain’t perfect, but it works pretty well
First of all it doesn’t work well, second of all, the answer to the question about broker fees is “around 20%”. In SS, by contrast, only 1% of the money goes to management fees.
As to more detail about why Chile’s system is not only not perfect, but is in fact fundamentally broken, let’s give the floor to Krugman via DeLong:
Maybe I’m slow (OK, not maybe) but it seems like the first of smlook’s issues – that their parents realized too late that SS didn’t provide enough for a comfortable retirement – argues for the contention that it is still only providing a safety net, which was the intent of the program from its inception. I’m not sure how that translates into people abdicating their responsibilities unless you feel that the government should not provide any safety net at all.
As to the government abusing it, the only abuse that I can think of is the deception entailed in using the balance in the trust fund to mask the size of the general fund shortfall.
Really, have they no shame at all?
No. Next?
I don’t think FDR would approve of S.S in its current state.
Some people disagree:
god I hate astroturf
….his signature contribution to the nation.
That would be one of two things: preventing the disintegration of the American polity in 1933, and/or winning the Second World War. Me, I vote for the former.
Social Security….eh.
smlook: “Even my parents did this. It was only well into retirement that they realized their mistake counting on S.S. Call my parents dumb or naive, but I think they were typical of their age.”
I take it their mistake was thinking SS would be enough, not thinking it would exist or something. If so, how would removing SS help? They would have had to save for a while to get to the point at which they’d have as much as SS would have provided; why do you think they wouldn’t just have made the same mistake and stopped there?
And why do you think that the fact that some people don’t engage in sound financial planning means that necessary support should be taken away from others? Especially when those others include people who didn’t make enough to save in the first place, and therefore have to survive on SS alone for reasons that have nothing to do with their lack of prudence, and who in your preferred state of affairs would have nothing.
Zing!
2001: Bush claims proof that Saddam has WMD
-says Iraq supports terrorists
2005: Bush claims Social Security is in crisis
-says young workers will not get retirement benefits
See how the first statements are outright lies, but the 2nd ones are self-fulfilling prophecies?
———————
Actually, this works fine if you substitute “center of world terrorism”
“Why can federal employees opt out of SS and join a plan that gives them investment options?”
This is a flatly incorrect statement.
Hilzoy,
First, I think S.S. affects familial responsibility (as do many aspects of our culture) which in turn contributes to the breakdown of the family. In a similar way that T.V. has affected the family. Our technology has grown extremely fast. Even the food we eat, that technology has produced is something that our society has difficulties dealing with in a healthy way.
” If so, how would removing SS help?”
See above. I think the best safety net is a local safety net… possibly monitored by the Fed’s with some. Call me cruel, but I think people should pay their own way for the most part… and help those who truly need help.
Money donated to the Tsunami victims is crucial, but we all know it is going to be abused. And alot is going to be lost just in the distribution of it. The farther away the money is from the community the more expense it takes to get back to them and the less control they have over it.
S.S. today is a crutch… not a safety net. I think people “feel” the gov’t is going to take care of them, but we know that the gov’t spends money it doesn’t actually have.
“And why do you think that the fact that some people don’t engage in sound financial planning means that necessary support should be taken away from others?”
I never said that. I said:
And personally I don’t really have a problem with dismantling S.S. in its current form.
See this is the real problem with the debate for me. Everything is taken to the extreme… It’s like chicken little… the sky is falling. All I said is that S.S. in its current form should be dismantled. I think you would agree with that statement if you thought by dismantling I meant providing more money. Why would we not want to dismantle something that doesn’t work? Give me a form that works and let’s rebuild it like that.
“…nothing to do with their lack of prudence, and who in your preferred state of affairs would have nothing.”
Well, if that is the game you want to play, then why do you want to continue to provide millionaires with S.S. that they don’t need and hurt the people who need it more? Your assumtion is typical. See, you really didn’t say that, but if you want to defend S.S. then I guess I could assume that’s what you want. You haven’t said you didn’t want it in this thread now have you?
Felix,
It’s a shame that James R. doesn’t seem to care about S.S. failing in the future. Also, there have been ammendments to the constition in order to preserve it. Are you against those changes also?
Why can’t we all opt out or opt in?
“It’s a shame that James R. doesn’t seem to care about S.S. failing in the future.”
Since “the future” is infinitely far off in these discussion, good on James R.
“Also, there have been ammendments to the constition in order to preserve it. Are you against those changes also?”
So I’m guessing you are both pro and con on Prohibition?
….his signature contribution to the nation.
That would be one of two things: preventing the disintegration of the American polity in 1933, and/or winning the Second World War. Me, I vote for the former.
Fair enough.
One of his signature contributions to the nation.
You have to know though, I feel the way about FDR that you do about Reagan. He’s a hero, and I don’t feel his image should be abused this way.
smlook, I don’t want to put words in your mouth, but it seems to me like what you would prefer is an abolition of Social Security (or at least the retirement portion of it) and, at most, perhaps easier access to the welfare system for the destitute elderly. Is this correct? Are you OK with the disability and survivors benefits portion of the program? If so, how would you propose that they be funded?
You have to know though, I feel the way about FDR that you do about Reagan. He’s a hero, and I don’t feel his image should be abused this way.
Well neither do I but in this particular case his image isn’t being abused at all.
I am shocked Edward, that FDR is a hero given his overall history regarding “Civil Liberties”. Where do you stand on Truman?
It’s the same old astroturf game of wondering how they can be the biggest a–hole. Witness the history of attacking Affirmative Action not on the merits, but by saying MLK would have hated it. Except, of course, that the actual human being was all for it. Sons of ::expletive deleted::, they can go ::anatomical impossibility deleted::.
It’s a shame that James R. doesn’t seem to care about S.S. failing in the future.
The only way Social Security will fail is if those Republicans who made promises about it in the 80s refuse to live up to those promises. If they do, let’s vote them out and put people in who will keep the promises that have been made. As pointed out regularly and with far more eloquence than I can muster, the Social Security system is not in immediate financial trouble. With fairly small changes it can last half a century under the worst assumptions.
Under less pessimistic assumptions (i.e., the ones the Bush administration uses when pushing its own plans), Social Security is not ever going to be in financial trouble, and in fact, retirement ages could be lowered, or payroll taxes lowered, or benefits raised, or some combination of the three.
If, after 75 years of growth, the government can’t provide a no-risk plan for the elderly and disabled that far exceeds what was provided during the Great Depression, something is very, very wrong with the moral values of our nation.
Why can’t we all opt out or opt in?
Because the government can’t “opt out” of providing for the elderly or disabled no matter what choices those people have made over their lifetimes. This is true for practical reasons, political reasons, and moral reasons.
Social Security is a success. We have practically eliminated poverty among the elderly in the space of a few generations. Some people seem to view this success as a problem to be overcome. That is absurd.
Timmy:
I am shocked Edward, that FDR is a hero given his overall history regarding “Civil Liberties”. Where do you stand on Truman?
Quickly, look over there! FDR is eating babies!
The only way Social Security will fail is if those Republicans who made promises about it in the 80s refuse to live up to those promises.
I’m just curious as to what you are talking about?
FDR ate babies, I didn’t knonw that, a cite if you please.
I’m thinking that anytime someone uses the image of a historical figure to make an political argument, it’s demogogic. Does anyone have any other examples of this?
I remember some controversy when various companies wanted to use deceased actors to tout their products (I thought the first was Fred Astaire dancing with a vacuum cleaner) On the other hand, the Michael Jordan playing his younger self was truely amazing. Was this a slippery slope from Forrest Gump?
Wow. I’m amazed it took this long for Timmy to wade in and post an irrelevant attempt at derailing the discussion. The man’s slacking.
I don’t think anyone disputes that SS could use some tweaking. But I think Edward was right in recognizing the point about trusting this administration. It’s so on-target that it bears repeating:
I wonder how many liberals aren’t exactly opposed to making some changes to SS, but just don’t trust this administration
That would be me and nearly everyone I know to whom I’ve spoken about the subject. And given the administration’s track record for responsibility, accountability, honesty, and fiscal discipline, I can’t imagine anyone grounded in reality /expecting/ us to trust Bush with SS.
felix and JerryN,
Seems like both of you need to spend a little time here:
http://www.cbo.gov/showdoc.cfm?index=5530&sequence=2
“[A]nnual Social Security outlays exceed revenues starting in 2019, and scheduled benefits cannot be paid beginning in 2053.”
I wonder if you guys are planning your retirement. Shouldn’t we be giving Bush credit for planning early? 15 years really isn’t that long away.
JerryN,
“I don’t want to put words in your mouth”
Then by all means don’t.
If you can try to imagine that I’m not evil, then your questions were answered before you posted.
“See above. I think the BEST safety net is a local safety net… possibly monitored by the FEDS with some. Call me cruel, but I think people should pay their own way for the MOST part… and help those who truly need help.”
Does that really seem so cruel and inhumane? Is it not clear that there is still the safety net?
Felix,
“Social Security is a success. We have practically eliminated poverty among the elderly in the space of a few generations.”
It really seems like you would be better off educating some of those on the left about this.
Catsy,
“Wow. I’m amazed it took this long for Timmy to wade in and post an irrelevant attempt at derailing the discussion. The man’s slacking”
That’s not really called for is it?
“That would be me and nearly everyone I know”
But, if that is the kind of digs you enjoy making. Let me have a shot… It really seems like you need to get out and meet more people.
That’s not really called for is it?
Actually, yes, it is. Timmy engages in this sort of dishonest rhetorical tactic consistently enough that he needs to be called out on it.
But, if that is the kind of digs you enjoy making. Let me have a shot… It really seems like you need to get out and meet more people.
So you equate a groundless (and ignorant) cheap shot about someone’s social life with pointing out that someone consistently tries to disrupt and derail discussion? This explains much.
Thanks for the suggestion. I think I’ll take it as an indication that there’s nothing more of value to be gained from engaging with you. Crickets are still chirping waiting for you to address the administration’s credibility deficit, and answer why on earth we should be expected to give Bush our trust on this one after the way he’s squandered it over the last four years.
“[A]nnual Social Security outlays exceed revenues starting in 2019, and scheduled benefits cannot be paid beginning in 2053.”
I made my point perfectly clear when I said, “Under less pessimistic assumptions (i.e., the ones the Bush administration uses when pushing its own plans)…”. You chose to ignore this sentence, for some reason.
There are assumptions being used to make the calculations you cite. Those assumptions are much more conservative than the ones the Bush administration is using in its projections of how its proposed privatization program would work. If you use the same assumptions for SS as the Bush administration is using for its plans, scheduled benefits can be paid in perpetuity with money left over for reducing the retirement age, or reducing payroll taxes, or increasing benefits, or some combination of the above.
If, to the contrary, we assume the more conservative SS assumptions are more accurate, Bush’s plan simply does not work. Ever. Period.
You can make up your mind as to which set of assumptions you would like to use. But what Bush is trying to do is to use the conservative assumptions when claiming SS is in crisis, while using the less conservative assumptions when claiming his plan will work.
The technical term for this is “fraud”.
“[A]nnual Social Security outlays exceed revenues starting in 2019, and scheduled benefits cannot be paid beginning in 2053.”
The fact that annual outlays exceed revenues does not affect whether or not people will get their scheduled benefits in that year. As you note, scheduled benefits will be paid in full by the trust fund until 2052, at which point there will still be enough money to pay most of them. And that’s on the CBO’s relatively conservative assumptions about productivity.
The only way SS is in trouble in 2019 is if the federal government defaults on the bonds in the trust fund, which would be not just illegal, but unconstitutional.
Edward,
In the original post you refer to what the organization Progress for America is working for as ‘Social Security reform’. To me this implies that their is something bad about SS. If like me you think their isn’t anything bad about SS then let’s call it (‘it’ being what the conservative right wants to do to SS), ‘tinkering’ or ‘alteration’ or ‘disassembaly’.
In reality, what I’ve seen bandied about by Bush’s minions is simply taking 15% to 30% of the SS pie to be shifted to IRA type accounts. This will leave a smaller share for those that receive more benefits than they can contribute (disabled, survivors, older retirees). As revenues shrink, benefits will be cut, the rich get richer(especially investment industry workers) and the poor get poorer.
The only way SS is in trouble in 2019 is if the federal government defaults on the bonds in the trust fund, which would be not just illegal, but unconstitutional.
It should be noted here that it is not just defaulting on the debt that is unconstitutional, the mere questioning of the validity of the public debt (and, specifically, pension debt) is in violation of the Constitution of the United States of America.
Those of you in violation, please correct your errors. Strict constructionists, twice so.
If Bush wants to call it a crisis, Democrats should cry from the hills he wants to destroy it and make old people penniless.
So two wrongs make a right? The best way to respond to hyperbole is with demagoguery? Sounds like a failed strategy to me, and a perfect way to repel me from Democratic argument.
As for what Krugman said about Chile, Felix, distortions abound. On management fees:
As for the Chilean system leaving workers in “dire poverty” with the government bailing them out, Krugman is misinformed to put it mildly:
I wonder how many liberals aren’t exactly opposed to making some changes to SS, but just don’t trust this administration
That would be me and nearly everyone I know to whom I’ve spoken about the subject. And given the administration’s track record for responsibility, accountability, honesty, and fiscal discipline, I can’t imagine anyone grounded in reality /expecting/ us to trust Bush with SS.
They don’t call it the third rail for nothing, and I give Bush credit for grabbing hold true Texas cowboy style.
Social Security affects a lot of people. It’s stupid to think you’re going to get anything done without reaching out to the other side of the aisle and opening an honest and frank dialog on the subject. This is not Bush’s style though. The current administration’s style is exclusionary. A “my way or the highway” attitude. Congress and the Senate are pretty much the same. The scorched earth tactic of the last election has not helped Bush either. Democrats are more united and firmly opposed to Bush’s ideas now than they were four years ago.
I repeat:
No WMD’s
Lied about prescrip[tion drug bill costs
Underfunds his own ideas (NCLB)
Bungling the war in Iraq.
I could go on but really, I think you get the point.
I gave Bush the benefit of the doubt 4 years ago because he’s the president.
I’m gonna need more than that this time around after seeing him in action for four years. Can ANYONE tell me why I should even attempt to trust this man? I’m willing to try, but I feel like the guy who got burned by his lover, and now she’s calling wanting me back. I want to trust but I’m scared I’m gonna get screwed again.
Hate to sound like a broken record, but no one from the right has answered or commented on this yet, and in my opinion, Bush’s credibility gap is the biggest obstacle to getting anything he wants done to SS, or in the next 4 years for that matter.
Charles Bird, you may want to try and get your economics lessons from someone other than the National Review. Citing them does not help your argument (certainly not when they do not address the charges at hand other than by hand-waving type arguments). As Max says:
I think that pretty accurately sums it up.
CB: “First, Krugman is in error to call the charges “management fees.” About a third of the fees are not management fees at all, but rather premiums for life and disability insurance coverage that are an integral benefit of Chile’s system.”
I don’t see why this is an objection. After all, SS as presently constituted offers disability and survivorship benefits, and replacing those with private accounts would presumably involve those very fees.
I echo what others have said about relying on NRO’s economics. There are lots of perfectly good conservative economists out there, but they don’t write for the National Review.
tacitus sez: soc. sec. – eh.
So, an apparently moderate righty has contempt for the govt program which has done more for ensuring a dignified life for the retired and disabled than any other program, be it federal, state or local. It’s NO WONDER that progressives and conservatives talk right past each other. We fundamentally disagree on what constitutes a fair social obligation.
and i also love the “personal responsibility” and “local responsibility” posts of smlook. classics in the genre.
on personal responsibility — the federal govt (a) sets minimum wage and (b) sets monetary policy at a point which ensures a robust class of unemployed, as to prevent wage-price spirals. Given these economic realities, do conservatives honestly expect maids, waitresses and short-order cooks to save enough for their retirement?
on local responsibility — wow! talk about taking federalism to the extreme! Sure, if California wants to provide a surplus on top of SS, that’s our business. But given the mobility of labor and capital in this country, just how quickly will the race to-the-bottom go when states are assigned the responsibility of caring for their seniors and disabled? TennCare anyone?
and then we get the famous canard about payments to millionares. There just aren’t that many millionares in this country, retired or otherwise.
I reiterate the challenge i’ve made in other posts on soc. sec. If we’re to go to a means-tested system (other than raising the salary cap on which payroll taxes are calculated and taxing ss distributions as ordinary income), then define “need”. Who qualifies?
But that’s the easy part. Then tell us all how you plan to administer a system which requires people to disclose their wealth.
Figuring out annual income is hard enough for the IRS. I do not believe that any system which requires that the SSA understand a retiree’s wealth (a) would ever be acceptable to the electorate or (b) could possibly be administered in a fair fashion.
Francis
Wow. I’m amazed it took this long for Timmy to wade in and post an irrelevant attempt at derailing the discussion. The man’s slacking
The kitten roundup has just begun, which really takes a lot of time.
Felix always brings up Chile, I prefer Australia for a variety of reasons.
the federal govt (a) sets minimum wage and (b) sets monetary policy at a point which ensures a robust class of unemployed
er, monetary policy is set by an independent agency call the Federal Reserve JFTR
Catsy,
“So you equate a groundless (and ignorant) cheap shot about someone’s social life with pointing out that someone consistently tries to disrupt and derail discussion”
No I equate making asumptions about someone when you don’t know or understand their motives nor their interests, nor their life.
He asked questions… the answers to which could be what he was interested in. No one is forced to respond. You made an assumption about him that you don’t really know anything about.
You said:
That would be me and nearly everyone I know to whom I’ve spoken.
I’m making an assumption about you, now. Based on the following:
I said you need to talk to more people. I found it odd that everyone gives you the same answer. Don’t you find it odd that more than half the nation supports Bush, but everyone you talk to doessn’t support him wanting to make changes to S.S. when he was partly elected on that issue? Because many people who I have talked to express a completely different perspective than you and everyone you talked to. I’m not making any assumptions about your social life. Again, you are assuming that I was and you are wrong.
I based my opinion on the fact that the majority of Americans disagreed with you on their choice as President.
I based my opinion on the fact that the majority of Americans disagreed with you on their choice as President.
Bzzt. A majority of *voters* disagreed on their choice of President, but even in an election with decent turnout like this one, that doesn’t translate to a majority of *Americans*.
Don’t you find it odd that more than half the nation supports Bush, but everyone you talk to doessn’t support him wanting to make changes to S.S. when he was partly elected on that issue?
No more odd than finding that most of the people I talk to disapprove of torture. Or do you find that to be strange as well?
Josh,
Point noted… but not relevant, they people did voice their opinion.
Felix,
The people voted Bush in the office because they believe in him. You obviously don’t. I can only guess that most Americans don’t believe that the U.S. has an open policy on torture. The current case seems to be supporting that.
Smlook: The people voted Bush in the office because they believe in him.
Actually, I suspect it was because Bush lies a lot about his policies, and they liked his lies better than they’re going to like his policies.
I can only guess that most Americans don’t believe that the U.S. has an open policy on torture. The current case seems to be supporting that.
I await Slarti’s rapid response telling you that what Gruner has done to the Iraqi prisoners wasn’t torture.
Wow, now the SS is going to use our tax money to publicize the “crisis”. That’s special in it’s own little way, not. I guess using my tax money on that whore Williams wasn’t enough.
link
I hope when, or if, the Democrats return to power they remember it’s a-ok to use taxpayer dollars to fund political agendas.
I can only guess that most Americans don’t believe that the U.S. has an open policy on torture
Most Bush supporters think Bush supports the Comprehensive Nuclear Test Ban Treaty, the land mine treaty and the Kyoto Protocol as well. I don’t think the current case supports that (and I do think the current case supports the idea that Bush either knowingly allowed the use of torture during his first term, or was incompetent – where does the buck stop)?
I await Slarti’s rapid response telling you that what Gruner has done to the Iraqi prisoners wasn’t torture.
Well, he’s been found guilty and sentenced to 10 years, so I think it’s somewhat moot. Does anyone know if he was convicted for “torture” or merely “abuse”? For that matter, does anyone know whether the relevant statutes distinguish between the two?
Added in proof: Well, this NYT article implies that he wasn’t charged with “torture”, but I don’t know whether that’s because we don’t have an applicable statute or because the prosecutors didn’t think they could make it stick. [I noticed the jury reduced an assault charge to battery, f’rex.] Anyone familiar with the legalities of this sort of thing?
Errr… that’s Graner that’s been found guilty and sentenced to 10 years, not Slarti. Apologies for any confusion there.
Most Bush supporters think Bush supports the Comprehensive Nuclear Test Ban Treaty, the land mine treaty and the Kyoto Protocol as well.
Nope, in fact the US Senate hasn’t supported Kyoto or the land mine treaty. I always thought Bush should put Kyoto in front of the Senate before the 2004 election to put the protocol to rest for good. Midterms in 06 is just another opportunity.
Hmm, many people seem to think that the Comprehensive Test Ban Treaty actually stops proliferation. So there we have yet another misconception.
that’s Graner that’s been found guilty and sentenced to 10 years, not Slarti.
Is there NO justice in this world??? ;-p
Hmm, many people seem to think that the Comprehensive Test Ban Treaty actually stops proliferation. So there we have yet another misconception.
If that had anything whatsoever to do with the point under discussion it might be a good thing to bring up. But as it doesn’t perhaps you could actually address the point under discussion, i.e., most Bush supporters believe Bush is in favor of things which he is not, for example the Comprehensive Nuclear Test Ban Treaty, the land mine treaty and the Kyoto Protocol.
There is a clear relationship here to Bush’s actions towards SS. The implication made above (you know, the point that was made which I believe to be false, and which I am adressing rather than going off on some completely unrelated tangent) was that people voting for Bush knew what they were getting as far as SS was concerned. This is completely false, as 1) Bush was evasive about SS during the campaign, and 2) Bush’s supporters believe Bush is in favor of policies which Bush in fact opposes.