# Alan Greenspan Decides Social Security Privatization Might Be Okay -- Who Cares? **URL:** \ **Category:** Great Debates\ **Created:** [February 16, 2005, 6:58pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394 "2005-02-16T18:58:29Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Huerta88](https://avatars.discourse-cdn.com/v4/letter/h/82dd89/32.png) [@Huerta88](https://boards.straightdope.com/u/Huerta88)\ **Post date:** [February 16, 2005, 6:58pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/1 "2005-02-16T18:58:29Z")
So Greenspan’s congressional testimony (breathlessly awaited by Congress and the markets and press) today said that there might need to be an alternative to Social Security as it’s currently constituted, but that private accounts had some potential downsides, but that first you’d have to take care of . . . . WTF? Who died and made Alan Greenspan . . . anything? So he runs the Federal Reserve. And? (Or, who died and made the Fed . . . anything). Okay, okay. The Fed has a “legitimate” role in . . . printing money and regulating the money supply. To this end it has a “legitimate” role in monkeying with interest rates, which are one immediate way of loosening or tightening the money supply. Now, you can stretch it and say that to forecast what to do with interest rates, the Fed has to make some predictions about the future. But Alan Greenspan was elected by nobody, and is not so far as I can tell the occupant of any seat ever properly conceived as a policymaking (rather than policy implementing) role. Essentially, isn’t he a functionary who’s supposed to monkey with the money supply in the way that best supports what Congress and the other elected officials choose as policy? He may or may not have private opinions on those policies, but that’s just what they are. When you tell the grease monkey down at the service station to fill it up with premium because you’re driving to Kalamazoo, does he tell you you really ought to use super-premium, and besides, Hohokus is a much more prudent destination? Also, Greenspan will be long dead by the time any full-scale “privitization” (and BTW, I think Bush’s plan is an awful combination of the worst forms of market risk and statist micro-management) comes into play and has the ability to work or not work. What business is it of his to be making oracular pronouncements about far-down-the-road policy issues? If I told the Secretary of the Mint we were going on the gold standard tomorrow, and he warned me that we didn’t have enough bullion to possibly do so that quickly, that’d be an appropriate, pragmatic response from a minister. If he told me we couldn’t do it because it might discourage investment in Third World foreign aid from 2029 onward, I’d tell him to mind his own business. Of course, it is equally the fault of Congress and the markets for making Greenspan out to be some driving force in the economy and/or a brilliant strategist and prophet. But honestly, isn’t it a little weird to have the whole country hanging on his every word (and for some people, implicitly, ceding him the role of fiscal policymaker-in-chief)? ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [February 16, 2005, 7:52pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/2 "2005-02-16T19:52:43Z")
I kind of appreciate an economist weighing in on matters of the economy. He’s dedicated his whole life to the American economy and seems to have a pretty good handle on what is a good idea and what is a bad one. He probably knows whats better for America’s economy a bit better than your average politician, who is more concerned about ideals and power. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 16, 2005, 8:03pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/3 "2005-02-16T20:03:44Z")
So I guess it is “stupid” when Congress calls in experts for congressional hearings? Say Congress is considering looking at that Kyoto treaty again and they bring in a panel of climatologists and other climate experts, I guess since those people are “only” experts in their field with decades of experience and high academic degrees they shouldn’t be heard by congress because we should trust a guy who before being elected was a business owner over experts in the field. Really this is just a plain dumb argument. Congress always brings in experts to give testimony, politicians way be sleazy but most of them aren’t stupid. They know enough to know they don’t _know enough_ off the bat to decide on a lot of highly technical issues. I don’t think there are many Congressmen with any academic or professional experience in economics. Aside from Greenspan being a very respected, very experienced economist as chairman of the Fed he _does_ have to sit and think about how X is going to affect the economy every day. If the guy doesn’t have something valuable to say about what he thinks will happen to the economy if X action is taken then I don’t know anyone who does. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 16, 2005, 8:05pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/4 "2005-02-16T20:05:38Z")
> [@Huerta88](#): > > Essentially, isn’t he a functionary who’s supposed to monkey with the money supply in the way that best supports what Congress and the other elected officials choose as policy? He may or may not have private opinions on those policies, but that’s just what they are. No. He (and the Fed generally) are charged with manipulating the money supply for the sole purpose of controlling inflation. All the other stuff he’s done (mostly good, as it happens) has been an extra-legal bonus. > [@](#): > > When you tell the grease monkey down at the service station to fill it up with premium because you’re driving to Kalamazoo, does he tell you you really ought to use super-premium, and besides, Hohokus is a much more prudent destination? The grease monkey has probably never served as chairman of a bipartisan commission on octane and destinations. Greenspan chaired the commission which did the last major reform to Social Security, in the '80s. He’s a universally recognized expert on the subject. > [@](#): > > What business is it of his to be making oracular pronouncements about far-down-the-road policy issues? If you’re in front of Congress and they ask a question, you answer. Congress is free to listen or not. > [@](#): > > If I told the Secretary of the Mint we were going on the gold standard tomorrow, and he warned me that we didn’t have enough bullion to possibly do so that quickly, that’d be an appropriate, pragmatic response from a minister. If he told me we couldn’t do it because it might discourage investment in Third World foreign aid from 2029 onward, I’d tell him to mind his own business. Well then thank **Cecil** you’re not making that decision. > [@](#): > > Of course, it is equally the fault of Congress and the markets for making Greenspan out to be some driving force in the economy and/or a brilliant strategist and prophet. But honestly, isn’t it a little weird to have the whole country hanging on his every word (and for some people, implicitly, ceding him the role of fiscal policymaker-in-chief)? He didn’t get that way because policymakers on both sides of the aisle drew a Tarot card that said so; he earned that trust by long and effective work. I have my differences with how Greenspan has done his job and even how he views it. But if I were considering a change to Social Security I sure as shootin’ would want to hear what he has to say on the matter. ---
**Author:** ![Huerta88](https://avatars.discourse-cdn.com/v4/letter/h/82dd89/32.png) [@Huerta88](https://boards.straightdope.com/u/Huerta88)\ **Post date:** [February 16, 2005, 8:19pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/5 "2005-02-16T20:19:39Z")
> [@manhattan](#): > > No. He (and the Fed generally) are charged with manipulating the money supply for the sole purpose of controlling inflation. All the other stuff he’s done (mostly good, as it happens) has been an extra-legal bonus. Yeah, I guess I’m just funny about the whole “extra-legal” part. In a federal government of limited enumerated powers (yeah, well), that sounds a lot like . . . “non-legal.” It’s funny how Greenspan was deified for the “mostly good” things he did during the period roughly coinciding with the stock boom, but has escaped any serious censure for failing to use his apparently extensive “extra-legal” powers so as effectively to prevent the subsequent bust. If Congress and the markets choose to treat him as some sort of Delphic genius, I am well aware that I can’t stop that. And they’ve treated even less infallible characters (themselves included) with equal truckling reverence. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 16, 2005, 9:22pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/6 "2005-02-16T21:22:21Z")
Eh. Actually, Greenspan’s been pretty careful and successful about not crossing any lines between extra-legal and non-legal – almost as if he weren’t an objectivist. 😉 The laws governing the Fed are sufficiently vague to give him any maneuvering room he needed. Even in the LTCG bailout, which I think was his most egregious overreaching, he was careful to keep the Fed _doing_ only things which are in its charter even as he _said_ they might do things which arguably are not. And on the bust, what more could he do? He warned, he cajoled, he whined, he raised rates. As it happens he also seems to have bought into the productivity miracle at precisely the wrong time, but he may turn out to be right about that too. As to his status as a delphic genius, I don’t know if you caught the full Q&A today – some Senators on both sides are just freaking _furious_ at the guy over the recent rate hikes. Too, I don’t think Senator Sarbanes is going to run out and endorse private accounts for Social Security on Alan Greenspan’s say-so. But even so, if you’ve got an expert on something right in front of you it makes sense to pick his brain even if you don’t intend to take his advice. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 16, 2005, 9:41pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/7 "2005-02-16T21:41:33Z")
> [@manhattan](#): > > The grease monkey has probably never served as chairman of a bipartisan commission on octane and destinations. Greenspan chaired the commission which did the last major reform to Social Security, in the '80s. He’s a universally recognized expert on the subject. > [@](#): > > But if I were considering a change to Social Security I sure as shootin’ would want to hear what he has to say on the matter. So, did anyone ask him whether he still stands behind the validity what he did in 1983? Even if not asked, Greenspan has a responsibility to say whether he still believes it was valid for Social Security to save up a whole bunch of money in the form of Treasury instruments to help pay the Baby Boom’s Social Security costs, or whether (as Bush says) it’s a fraud that’s been perpetrated on us all. ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [February 16, 2005, 9:47pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/8 "2005-02-16T21:47:05Z")
> [@Martin Hyde](#): > > So I guess it is “stupid” when Congress calls in experts for congressional hearings? Say Congress is considering looking at that Kyoto treaty again and they bring in a panel of climatologists and other climate experts, I guess since those people are “only” experts in their field with decades of experience and high academic degrees they shouldn’t be heard by congress because we should trust a guy who before being elected was a business owner over experts in the field. > > Really this is just a plain dumb argument. Congress always brings in experts to give testimony, politicians way be sleazy but most of them aren’t stupid. They know enough to know they don’t _know enough_ off the bat to decide on a lot of highly technical issues. > > I don’t think there are many Congressmen with any academic or professional experience in economics. > > Aside from Greenspan being a very respected, very experienced economist as chairman of the Fed he _does_ have to sit and think about how X is going to affect the economy every day. If the guy doesn’t have something valuable to say about what he thinks will happen to the economy if X action is taken then I don’t know anyone who does. No problem with Congress getting input. However, Greenspan isn’t _only_ economist in the US. I’ll bet you can find an economist on almost any side of the question that you want to ask about. The problem with expert consultants is that they have no responsibility for action, as is the case with Greenspan in this matter, so they are free to speculate endlessly. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 16, 2005, 10:03pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/9 "2005-02-16T22:03:46Z")
> [@manhattan](#): > > And on the bust, what more could he do? He warned, he cajoled, he whined, he raised rates. As it happens he also seems to have bought into the productivity miracle at precisely the wrong time, but he may turn out to be right about that too. Raised rates? He lowered rates when the bust started, which led to the wave of consumer spending based on home refinancing, which likely made the bust less harmful than it could have been. They are raising rates now, but that is appropriate. And his solution to the 1983 real crisis was quite good. If we had a president today as left wing as Ronald Reagan, this would be a non-issue. My problem with him is that he seems to let his partisan bent obscure his good judgement, especially in the area of deficits. Where is the deficit hawk we used to love? But I don’t see how anyone could argue that he shouldn’t be testifying. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 16, 2005, 11:20pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/10 "2005-02-16T23:20:55Z")
> [@RTFirefly](#): > > So, did anyone ask him whether he still stands behind the validity what he did in 1983? Even if not asked, Greenspan has a responsibility to say whether he still believes it was valid for Social Security to save up a whole bunch of money in the form of Treasury instruments to help pay the Baby Boom’s Social Security costs, or whether (as Bush says) it’s a fraud that’s been perpetrated on us all. Mu. Your post is inaccurate or misleading in all material respects and therefore cannot have an answer. In fact, Greenspan spoke extensively about the '83 fix, the status of the trust fund and the comparisons and contrasts to the situation today (for those who want to check out the [transcript](http://www.latimes.com/business/la-021605fedtext_wr,0,669160.story?coll=la-home-headlines), the meatiest stuff on this particular issue are during questioning by Senator Corzine, about 7/8 the way down). I’ll happily discuss it with someone whom I judge to have the intellectual honesty to construct a fair question and the intellectual capacity to discuss the answer. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 16, 2005, 11:24pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/11 "2005-02-16T23:24:35Z")
> [@Voyager](#): > > Raised rates? He lowered rates when the bust started, which led to the wave of consumer spending based on home refinancing, which likely made the bust less harmful than it could have been. They are raising rates now, but that is appropriate. Sorry I was unclear. He raised rates sutstantially on two occasions during the run-up to the bust while he was warning that it might happen (irrational exuberance and all that). As you correctly pointed out, he properly lowered them when the bust was upon us to increase consumer liquidity. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 17, 2005, 3:43am UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/12 "2005-02-17T03:43:02Z")
> [@David Simmons](#): > > No problem with Congress getting input. However, Greenspan isn’t _only_ economist in the US. I’ll bet you can find an economist on almost any side of the question that you want to ask about. > > The problem with expert consultants is that they have no responsibility for action, as is the case with Greenspan in this matter, so they are free to speculate endlessly. No but he is one of the highest ranking quasi-governmental economists. Not all economists have the same focus and one place you are sure to find economists that _have_ focused on the SSA is within government itself. I’m almost certain, no in fact I am certain that just as Greenspan is not the only economist in the country he is also not the only economist that has given information to congress on Bush’s proposed SS plan. And there isn’t a “problem” with experts being able to speculate endlessly, that is what they are there to do to a large degree. It’s up to congressmen to decide which evidence has the most scientific support. That’s why they are the elected decisionmakers. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [February 17, 2005, 4:54am UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/13 "2005-02-17T04:54:13Z")
As I have no intellectual honesty that I know of, and would promptly kill it - well, actually, torture it and kill it (for the fun of it) if I found that I had any - I’ll tackle your question, **RT Firefly**. First of all, Bush of course can’t come out and say that he thinks the trust fund is a fraud, but his supporters do come out and say that, repeatedly. So that’s the base assumption that he’s working from, regardless of his public pronouncements. Greenspan, OTOH, doesn’t think it’s a fraud, but rather figures, from an economic POV, that it doesn’t address the societal problem of how to fund the demographic shortfall that will be coming upon us as the Baby Boom retires. This is a POV shared by a lot of people, including me; the problem, defined, isn’t how do you fund Social Security, per se, but how does society, as a whole, fund the aggregate demand for the surplus thrown off by the economy by all those retired folks, if the number of people working is so much less than it is now compared to the number of people retired? The relevant quotes - from the transcript cited by **manhattan** - occur here: > [@](#): > > MR. GREENSPAN: Well, but, Senator, I think it works fine for the cash pay-as-you-go system, but it does nothing to create the savings, which creates the capital investment, which creates the goods and services that are required. > … > MR. GREENSPAN: Well, I think the issue essentially is that, to go back to an earlier point which we have to keep in mind, about – remember, savings, as you know as well as I, doesn’t create investment. That is, implicit in all of this is that the incentives for investment are there, and that when you think in terms of taxation and how one creates the savings, it is conceivable that you can create the savings, but regrettably at the same time, so diffuse the incentives to invest that we will not get the capital assets we need to essentially produce the goods and services, so that proper balance here I think is quite important. And I think that – I think it’s an extraordinary complex and difficult issue. The main problem is getting the growth that will fund the retirement of all those boomers, not just building up a surplus. This is a problem faced by the entire industrialized world, actually, and the US is actually in better shape from a demographic POV than, say, Japan, because our far greater openess to immigration has given us a younger population that is also more fertile. Now, part of the problem of course is that in recent years we’ve run up a big deficit, and the mechanism that’s been used has been that the Congress - in 2002, under the Republicans - eliminated the PAYGO rule instituted during the Clinton years, which said that any tax cut had to be offset by an equivalent spending reduction. Greenspan here: > [@](#): > > MR. GREENSPAN: Well, I think the issue is – is that you – at least the way I would do it is, there are certain of the tax cuts which I view as enhancing economic growth and therefore enhancing the revenue base. I’ve been arguing, since the PAYGO has been dropped in September 2002, that we should restore it as quickly as possible. The way I would reconcile my own position is that I think maintaining the tax cuts on the – the reduction in taxes on dividends, which essentially partially integrates the individual and corporate taxes, eliminating part of the double taxation on dividends, I think, is a good thing. > But because I hold to the position that we should be adhering to PAYGO, I think it’s necessary to offset it by other means, as is required by the law, were PAYGO still in effect… > But that does not mean that we shouldn’t be focusing on the goal of getting the deficit down, especially as quickly as we can, before we begin to run into the really serious problems, maybe 2012, 2014. We don’t have a great deal of time to do it. In short, intellectual honesty requires a recognition of two things: 1 - The surplus built up after the 1983 commission that Greenspan chaired is not, in and of itself, enough to guarantee there won’t be a problem. You have to have growth, and there is a decent argument to be made that cutting taxes is pro-growth, but 2 - You’ll never solve the problem if you keep running up deficits in general revenues. So if you’re going to cut taxes on the argument that will stimulate growth, you must also cut expenses. 3 - Also, there’s places in the transcript where he flatly and bluntly states that borrowing 2 trillion to fund private accounts does nothing to increase net national savings, which is a prerequisite to number one above, but also says 4 - that over the long term, private accounts could increase net national savings, by encouraging growth in the economy. One and two are pretty much common sense. Three and four are typical of an economist: for some reason, they’re obsessed with the fact they have two hands, and so have an impossible time actually stating what they are for unequivocally. Which is why my wife, on the sole occasion that she sat and listened to Greenspan’s testimony, many years ago, got up off the sofa in disgust after 10 minutes and said to me, “But he’s not saying anything.” “But that’s the point!”, I replied. For some reason, she didn’t understand. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 17, 2005, 1:36pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/14 "2005-02-17T13:36:56Z")
> [@manhattan](#): > > Mu. Your post is inaccurate or misleading in all material respects and therefore cannot have an answer. Oh really? Gonna cite particulars? I mean, it was a pretty short post, other than quoting you. Well, shoot - I guess that explains it. > [@](#): > > I’ll happily discuss it with someone whom I judge to have the intellectual honesty to construct a fair question and the intellectual capacity to discuss the answer. Better stop talking to yourself then, bub. ---
**Author:** ![Huerta88](https://avatars.discourse-cdn.com/v4/letter/h/82dd89/32.png) [@Huerta88](https://boards.straightdope.com/u/Huerta88)\ **Post date:** [February 17, 2005, 1:43pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/15 "2005-02-17T13:43:14Z")
> [@Martin Hyde](#): > > Really this is just a plain dumb argument. Congress always brings in experts to give testimony, politicians way be sleazy but most of them aren’t stupid. They know enough to know they don’t _know enough_ off the bat to decide on a lot of highly technical issues. > > Aside from Greenspan being a very respected, very experienced economist as chairman of the Fed he _does_ have to sit and think about how X is going to affect the economy every day. “As chairman of the Fed . . .” Well, that sounds like the old appeal to authority. No one has established to me that the unelected, arcane, and apparently now dictator-for-life-tenure, position of “chairman of the Fed” equates with “near infallible economic expert,” and the various “chairmen of the Fed” have jointly failed to provide uniform economic prosperity, or uniformly to avert economically unprosperous times, for the U.S. The “dumb” (to take your language) things going on here are in Bush’s massively-complex plan, which will lead to highly-circumscribed “freedom” for (certain government-favored) employees to divert (as much as a whopping 4% of) their earnings into (government-chosen) investment funds and then later (subject to six million rules), take a (government-approved) annuity out and get some of the (hypothetical) returns back. It is the worst combination of incremental “improvement” and continued statism. (Well, not the worst form). The following ill effects could be predicted to occur, even by someone as dumb as I am: –revenue shortfalls with consequent pressure for the government to make them good (somewhat unlikely, as the government currently earns so little on its “savings”). –massive accounting and compliance costs. –massive government involvement in private investment decisions (how long before Jesse Jackson starts lobbying the government to forbid them from investing in firms that don’t have an “acceptable diversity policy,” or before Greenpeace is down on Capitol Hill demanding a prohibition on investment of SS funds in environmentally-irresponsible companies or in mutual funds that haven’t complied with their Code Of Ethics?). The point is, these are largely _political_ issues, on which your or my ability to see the major problems, if we think about it, is not so different from Alan Greenspan’s (and who the hell is he, again?). And certainly, my views on the policy issues of the redistribution of wealth that is at the core of Social Security are every bit as valid as his. Of course, no one, from Greenspan to Bush, is willing to admit that SS is simply another form of redistributive welfare, so it’s inherent in the situation that our debates are going to be along the margins. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [February 17, 2005, 1:53pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/16 "2005-02-17T13:53:17Z")
If you don’t think that head of the central banking system of the United States has some knowledge about monetary policy, and if you don’t see any connection between retirement savings and banking, interest rates, and the fiscal solvency of the country (all of which are involved in monetary policy), I don’t know what to say. It’s not like Greenspan was talking about American Idol. I have a sneaking feeling that the OP knows less about Greenspan’s expertise than Greenspan knows about savings, investment, and the markets. Wait, it’s not a sneaking feeling, I think it’s pretty much obvious. ---
**Author:** ![Huerta88](https://avatars.discourse-cdn.com/v4/letter/h/82dd89/32.png) [@Huerta88](https://boards.straightdope.com/u/Huerta88)\ **Post date:** [February 17, 2005, 1:59pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/17 "2005-02-17T13:59:37Z")
I suspect I know more about Greenspan and his background than you think (and, maybe more than you do). I’ve been following this show for awhile. When I say – “Who the hell is Alan Greenspan,” I’m making a subtler point that you’re maybe not getting: So what? In America, we’re not typically enthralled with royalty or ministers-for-life or even government-by-the-supposed-“intelligentsia” (as various countries have tried with mixed success). I’m not thrilled with successive Administrations reflexively genuflecting to Greenspan on matters not only of interest-rate-monkeying (the job he’s getting paid for), but also . . . everything remotely touching on the economy. The stupid media can be forgiven for being stupid (do we need to dig up the articles from 1999 basically proclaiming that Greenspan singlehandedly has made everyone in America rich forever?). If you’ve read any of my threads/posts on federal judges, you’ll see a consistent concern for the notion that we shouldn’t be appointing lifetime pro-Consuls with no electoral answerability, and acting without any clearly-defined checks and balances, as Platonic guardians. ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 17, 2005, 2:15pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/18 "2005-02-17T14:15:02Z")
Fair enough – I have a higher opinion of Greenspan than you do (though I agree that all the fawning over him is both overdone and icky), but disagreements make markets so no harm there. Would you at least agree that it is appropriate to ask him a) questions about the need or not for a current fix in the context of the '83 commission on which he served and b) some insight into possible consequences for interest rates of moving inter-government debt into the private markets under privatization and non-privatization scenarios? ---
**Author:** ![manhattan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manhattan/32/7_2.png) [@manhattan](https://boards.straightdope.com/u/manhattan)\ **Post date:** [February 17, 2005, 2:34pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/19 "2005-02-17T14:34:31Z")
> [@RTFirefly](#): > > I mean, it was a pretty short post, other than quoting you. It was. Your ability to fit so much dreck into such a short post should be a source of enormous, uh, something to you. > [@](#): > > So, did anyone ask him whether he still stands behind the validity what he did in 1983? As I linked to, the transcript of his remarks is easily available. You either already knew the anwer to this question or consciously choose not to seek it out, intentionally being ignorant for some purpose. > [@](#): > > Even if not asked, Greenspan has a responsibility to say whether he still believes it was valid for Social Security to save up a whole bunch of money in the form of Treasury instruments Chairman Greenspan spoke at length about this “fix” and has always maintained that under the unitary budgeting rules that have been in effect for several years it is essentially an extension of the pay-as-you-go system. > [@](#): > > to help pay the Baby Boom’s Social Security costs, The '83 fix was _not_ to pay the Baby Boomer’s Social Security costs and never was. It was to solve a short-term cash crisis while still staying within the laws setting up the Social Security charter – basically, to keep the thing solvent _until_ the boomers started hitting the beach. The Commission, and Congress and the President, knew then that the problem would re-emerge in 25 years and that the system would run out of money completely somewhere around 75 years down the road. The problem will re-emerge, in the President’s view, in 2018. In Greenspan’s view, it will re-emerge in 2008, 25 years after the fix. > [@](#): > > or whether (as Bush says) it’s a fraud that’s been perpetrated on us all. Lie. We know for a fact that you are lying and not in error because you’ve been shown numerous times that this is a lie and yet you persist in lying. The President has consistently accurately described the trust fund system, when it will start to shrink and when it will hit zero. He has never, ever, said or implied that the system is a fraud or that the government might not make good on the intergovernment debt. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 17, 2005, 3:07pm UTC](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394/20 "2005-02-17T15:07:22Z")
> [@manhattan](#): > > As I linked to, the transcript of his remarks is easily available. You either already knew the anwer to this question or consciously choose not to seek it out, intentionally being ignorant for some purpose. I failed to travel into the future, check out the link in your post subsequent to mine, return, and include the results in that post. Are your expectations this high for everyone? I mean, I’m good, but I don’t wear an “S” on my chest. > [@](#): > > The '83 fix was _not_ to pay the Baby Boomer’s Social Security costs and never was. It was to solve a short-term cash crisis while still staying within the laws setting up the Social Security charter – basically, to keep the thing solvent _until_ the boomers started hitting the beach. The Commission, and Congress and the President, knew then that the problem would re-emerge in 25 years and that the system would run out of money completely somewhere around 75 years down the road. IOW, when the last of the Boomers were in their mid-90s. Speaking of stuffing drek into one’s posts, by “the system would run out of money completely,” how do you get that? When the _trust fund_ runs out of money, the _system_ will still presumably have the income stream from payroll taxes. That isn’t exactly the equivalent of “run[ning] out of money completely.” And when you say “the problem,” could you be specific as to _what_ problem the Commission, the Congress, and the President knew would re-emerge in 25 years? > [@](#): > > The problem will re-emerge, in the President’s view, in 2018. In Greenspan’s view, it will re-emerge in 2008, 25 years after the fix. Because if the “problem” is that the trust fund payouts will exceed payroll tax revenues (2018), or if the “problem” is that at some point (2008) the amount of money the general fund can borrow from the trust fund each year to help pay for Bush’s tax cuts will start to diminish, then it’s hard to believe that’s the same “problem,” because if it is, then it sorta says the Commission, the Congress, and the President acknowledged back in 1983 that the extra pay-in on top of paygo between 1983 and 2018 might well not be used for its intended purpose, and accordingly didn’t constitute a ‘fix’ at all. > [@](#): > > > [@](#): > > > > or whether (as Bush says) it’s a fraud that’s been perpetrated on us all. > > Lie. We know for a fact that you are lying and not in error because you’ve been shown numerous times that this is a lie and yet you persist in lying. The President has consistently accurately described the trust fund system, when it will start to shrink and when it will hit zero. He has never, ever, said or implied that the system is a fraud or that the government might not make good on the intergovernment debt. **Manny, you are a liar.** [Here.](http://www.whitehouse.gov/news/releases/2005/02/20050209-15.html) > [@](#): > > Some in our country think that Social Security is a trust fund – in other words, there’s a pile of money being accumulated. That’s just simply not true. The money – payroll taxes going into the Social Security are spent. They’re spent on benefits and they’re spent on government programs. There is no trust. We’re on the ultimate pay-as-you-go system – what goes in comes out. And so, starting in 2018, what’s going in – what’s coming out is greater than what’s going in. It says we’ve got a problem. “There is no trust.” WTF do you _think_ that means, **Manny**? It sure doesn’t sound like “The Federal government stands foursquare behind the Treasury instruments in the Social Security Trust Fund,” does it? If he isn’t saying there’s nothing in the trust fund (that supposedly has $1.5T in Treasury instruments), I’m missing it. You are a liar. Kindly go back under your rock, so that honest people can have an honest discussion. [Next page](https://boards.straightdope.com/t/alan-greenspan-decides-social-security-privatization-might-be-okay-who-cares/290394.md?page=2)