Well, from a political point of view it’s important to point out that for Washington’s purposes Greenspan is not ‘an economist’ but ‘THE economist’. He’s held in such a high regard that I’ve seen him referred to as being more influential in Washington than Denny Hastert.
And as for the tiff brewing betwixt RTF and Manhattan can we agree on this:
The problem as such is not so much that the ‘Trust Fund’ will run out of money per se. The problem, as the system currently works, is that there comes a day when the non-SS budget will no longer be able to borrow the SS funds to cover current expenditures. In addition, at that point general revenue dollars will need to be directed TOWARDS the SS system to cover expenses. In addition (again) this would not necessarily have been a problem had the SS funds not been borrowed for 20 years and replaced with T-Bills.
So, we come to a day when:
A) The federal government will be required to ‘live within its means without borrowing from SS’.
B) This is combined with having to pay off the debt owed to the SS fund that was spent to fund general expenditures previously.
C) We’re screwed.
I honestly see this as less of a ‘Social Security Crisis’ than a ‘Christ! Our spendthrift was (both Rep and Dem) have finally come home to roost! What the fuck are we going to do’ crisis.
You seem to place a higher value on public Congressional committee hearings as a way for members of Congress to decide on a course of action than do I.
For one thing, the views of the testifying “expert” are generally well known to at least the Chairman, if not most of the members, of the committee and the questions asked are designed to support the position that the members want supported. All of these folks are well known to each other, having worked with and against one another over a period of many years. The members of Congress have been wrestling the the “Social Security problem” for decades and are at least as familiar with the economic arguments as are the economists they call to testify.
For another thing, if a full spectrum of economic “experts” is heard from, their advice and opinions will cover the full spectrum of possibilities. This leaves the members of Congress free to pick and choose from among the possibilities those that they wanted to choose before the “experts” ever testified.
And lastly, even Greenspan did not explain how allowing people to partially opt out of Social Security saves the program.
(a) I don’t know. Maybe. On the other hand, if it is his former membership on the commission (and not his current job) that is the basis for asking him in particular – why not ask the other commission members? Why not ask other “leading economists” – don’t we have any? Why not ask Pete Best what he would have done differently on the White Album?
(b) Yes.
Overall, though, the theme of the “Tell us what to do, oh mighty Lord Greenspan” seems to predominate in any discussion of this Solon, and to lead people to defer cringingly to him on matters well beyond the somewhat-narrow techno-wonk issues that are his proper province, such as in your question (b), and that troubles me. Is he, in fact, the World’s Greatest Living Economist? Well then, we’d better be cultivating or relying on some other good economists, because there’s no reason (and actuarially, there hasn’t been for awhile) to believe he will remain “Living” for any reliable period of time.
It’s the cult of personality (and his apparent complaisant acceptance of such a Solomonic wisdom-giving role) that basically bothers me.
Ooh. It suddenly occurs to me that a lot of people in this thread may be laboring under a misconception. Chairman Greenspan’s testimony yesterday and today are not because Congress decided they want to hear from him on Social Security, at least not specifically.
This is his semi-annual report to the Congress on monetary policy. He’d be there these two days even if no one had mentioned Social Security. Congresscritters are asking about Social Security (and the press is covering it) because this is his first testimony since the election and President Bush’s move to address Social Security. If it weren’t a current issue he’d still be testifying, but coverage would be limited to a blurb in the Journal about how carefully he avoided answering questions about how high he’d take the Fed Funds rate.
Aw, crap. My last post was being composed while this posted – sorry about that. The answer is “because he’s testifying anyway and his answers will make the news so why not ask him some leading questions and see if we can get our point of view in the papers.”
Your reply and others have stated correctly the problem with the earnest notion that we need Mighty Lord G. to educate us: the whole performance is a bit of political theater (in which he is a willing participant – he should just say “WTF do I know about the social policy choices that will need to be made as we decide How To Save Social Security, and that’s not what I’m here to talk about anyhow” (Congress’s power to compel testimony does not extend to a power to make someone testify on irrelevant subjects), but he doesn’t).
The quaint notion of congressional hearings as an actual and sincere educational endeavor that will change Congress’s minds is akin to believing that congressional “fact finding” tours are something more than taxpayer-fueled junkets. The Congressmen already inclined to suck up to Greenspan will not be much more or less so after his testimony, and those inclined to support the President for political-clique reasons will not be dissuaded from their views by the testimony (likewise those inclined to oppose).
Done did. I gather that in addition to having an impaired sense of honesty, your ability to read is equally troubled.
Someday, I’m going to retire. From that day on, I will be putting less into my bank accounts, mutual funds, 401-K’s, etc., than I’ll be taking out of them.
I won’t regard that as a ‘crisis’.
But that moment is the equivalent of 2018 for the Social Security system. Or at least, it’s the equivalent of how 2018’s being played by the crisis-mongers, including the President. Because up until 2028, the system’s revenues - including trust fund interest as well as payroll taxes - are still projected by the trustees to exceed payouts.
So 2018 only matters as far as the Social Security system is concerned, how, Manny? You’re reputed to know something about money. You tell me. What are the possible assumptions that make 2018 a crisis point for Social Security? Answer me that.
Imagine that, sometime before I retired completely, I cut back my hours for a few years, so that I was only making 80% of what I had been earning previously. And let’s assume that even at 80%, I’m still making more than I spend each year, and am saving the rest.
The year that I cut back my hours is the 2008 equivalent. I’ll still be stashing away more money than I’m spending each year, but not by as much as I used to. The bank will still be able to borrow money from me each year, but not as much as they used to.
According to Greenspan, 2008 is when Social Security begins to have problems. Unless Social Security’s purpose is viewed as being to provide a big pool of surpluses to finance Bush’s tax cuts (which for all I know is how Greenspan views it, and there is some supporting evidence for this), then that just ain’t so. There’s a general fund problem beginning in 2008, which will gradually become a crisis, as there will be increasingly less Social Security surplus from that day on to borrow from. But according to Greenspan, the tax cuts that are driving that crisis were just hunky-dory.
If you’re wanting to argue social security reform you can, but I suggest you don’t direct it towards me. I didn’t come into this thread to argue social security reform and I don’t consider that the issue here.
Appeals to authority aren’t always wrong. Would it be wrong for us to talk about highway safety with a government official that has designed and maintained highway safety measures and regulations for 30 years? Of course not.
If we were congressmen then we should probably hear from more people than just this one person, but going to a source of authority on the matter only makes sense.
And you really don’t seem to understand how the FED works. It has “near dictatorial powers” in that it can manage its own day to day activities without expecting to be told otherwise. Just as, you know, every bureaucratic unit in our federal and state government can do. That’s one of the reasons the bureaucracy is considered one of the biggest powers in our government.
Of course the big difference between the Federal Reserve system and the Department of Commerce for example is that if push comes to shove the President has clearly defined and absolute authority over the Department of Commerce.
The Federal Reserve is much more independent. But its independence is to a large degree necessary. Our country has in the past shown a penchant for using economics to pander to voters far too often. Economic stability would be greatly harmed if Joe Congressman from Iowa had the power to directly influence the Federal Reserve.
I’d look at the Federal Reserve much like I would the IRS, both of them, because of the nature of their functions, need to be somewhat independent of government control. Furthermore since the Fed is the central bank it needs the support of all the lesser banks in the United States. And the best way to gain such control is through a system which makes voluntary Fed membership beneficial for most banks. And since member banks have influence on Fed policy and help make Fed policy they are much less likely to violate Fed policy.
Compare this to how manufacturing firms deal with EPA regulations.
And the Fed and certainly the Fed Chairman (who’s power within the Federal Reserve is more limited than CNN would suggest) don’t have “dictatorial powers.” Dictators cannot be “let go”, Greenspan can be let go every four years or so. And the whole Federal Reserve could be destroyed by simple action of Congress if we decided that managing our banking system and monetary policy was no longer best done through the Federal Reserve. The system is a creature of the legislature, and legislative acts define it and are the only things allowing its existence.
Anyways, to get back to the original topic (which your last argument had little to do with) “who cares” when Greenspan has something to say? Everyone should care, he’s not a crackpot, he’s a widely respected economist with lots of experience in the field. Obviously economics is a field where you have lots of economists with differing opinions, so no one has to agree with Greenspan. But to say, “Oh, who is he?!” is just disingenuous.
It’d be like saying, “what would he know” if a 30 year veteran airline pilot said the new guidance lasers made it difficult to pilot the plane effectively. You sure as hell would listen to him and at least give his argument the light of day because you have to accept he’s an authority on the matter.
It doesn’t mean his argument should be the only one listened to, and no one is arguing that. What you’re arguing is we shouldn’t even listen to Greenspan at all, not because he’s a bad economist but because 1) you hate the Federal Reserve system, and 2) think that no matter who is its chairman they shouldn’t be respected or listened to on any matters outside the running of the Federal Reserve.
You’re certainly correct. Congressional hearings are honestly more like trials in a courtroom than operations that are attempting to educate the congressmen.
We, the public, (or the voting public anyways) is the jury.
Congressmen from the right are going to bring in trained experts that have right-leaning ideas. And you can find many very acceptable experts with conservative opinions on virtually every topic.
Then the left is going to bring in trained experts that have left-leaning ideas. And again, you can find many very acceptable experts with fairly liberal opinions on virtually every topic.
This all provides fodder. So when GOP Congressman A gets in an argument in public with DEM Congressman B GOP Congressman A can say, “You opposed social security form when x report by x respected economist said it was in the nation’s best interests.”
Then DEM Congressman B will hopefully be on his feet and reply, “No, I opposed it because a report by Y respected economist said it was AGAINST the nation’s interests. And it’s well known that Y is smarter than X.” Or something like that.
But anyways the experts involved typically have done “real” research on the matter, or at least have real expertise in the area.
The OP really just has one big axe to grind. He hates the Federal Reserve system and he hates Alan Greenspan. He’s probably a conspiracy theorist as well. That’s no big surprise the Straight Dope seems to believe virtually every Vast Right Wing Conspiracy Theory you can find.
But all of that is irrelevant. You can hate Alan Greenspan and think he is a dictator. But to say that someone with his experience has an opinion that “shouldn’t be listened to” or that we should say, “so what” to is just ludicrous. I’m not saying you have to agree with Greenspan’s conclusions, a lot of economists, actuaries, et cetera do not. But to say he shouldn’t even be listened to is a just a pathetic form of dismissal that does nothing for anyone.
Actually, I’d love so see a story from the media about Greenspan making “everyone in America rich forever.” If there literally is such a story, I can only assume it was written by a drunkard.
The Chairman of the Fed is nominated by the President, confirmed by the Senate, and may be dismissed by the President “for cause.” He is pretty much as accountable as anyone else appointed to office in the Executive Branch. It sounds like you just have something against Greenspan personally, and perhaps bear a grudge against the Constitution. Needless to say, it’s kind of bizarre to use Alan Greenspan to indict the Founding Fathers’ view on filling government offices.
Someday after that, you are going to die and your need for those assets will cease. Unless you assume the same of the federal government, your comparison is laughable.
I haven’t seen everything the President has said, but I’m unaware of him referring to 2018 as when the crisis hits, or even of him using the word crisis as regards social security.
Here are some dates and what happens as regards your lie about the President’s characterization of the trust fund as a fraud.
2008: According to Alan Greenspan, this is when the trust fund will stop growing. In other words, it cease being a net purchaser of government debt at that time. The debt will still be good, according to literally everyone in the universe, including the President.
2018: This is when the President estimates that the trust fund will begin to become a net redeemer of treasury securities. In other words, current cash flow from payroll taxes and interest will be insufficient to fund benefits and the system will start to sell (or allow to be redeemed) the IOUs. At this time, though, the government will have to increase public borrowing to make up for the fact that they are beginning to redeem the inter-government borrowing which had been funded by the Social Security excess collections. The accumulated debt, the trust fund which will begin to shrink, will still be good, according to literally everyone in the universe, including the President.
2042 to 2058, depending on the estimate: This is when the trust fund will be gone. In other words, the treasury securities, which literally everyone in the universe, including the President, agrees are good, will all have been sold and the system will have only its current cash flow to rely upon. It’s not a question of honoring or not honoring the debt in the trust fund, it’s a question of there being literally no more debt to honor. It is this time as when the President says the system will be “bankrupt.” People such as yourself and at least one Congresscritter today counter that “bankrupt” isn’t the proper term because the system will still have enough cash flow to cover 3/4 of the benefits. Imagine if GM announced that one day that it was out of money and that current profits could only pay 3/4 of its fixed obligations such as pension benefits and interest. What term would would someone use to describe GM on that day? As a GM debtholder, I’ve got one in mind. It’s “bankrupt.”
Do you see the trend here? Whether one thinks of the trust fund as a big pile of money that happens to be invested in treasury securities or an inter-government accounting fiction (both perspectives have merit) literally everyone in the universe, including the President, agrees that the debt is good and will be paid. Everyone. Not everyone except a few people. Not everyone except the President. Everyone.
Wow, there’s a point beyond the scope of the analogy, where the analogy breaks down.
You know what? That’s true for practically every analogy. Your logic is laughable, but that’s nothing new.
Italics mine. I’m sure I can find you some cites of the italicized stuff later. And the quote I’ve already cited indicates that he believes something bad’s gonna happen in 2018. He may not have used the word ‘crisis’, but so what? The idea is there: there’s no trust fund, SS is paygo, there’s less coming in than going out after 2018 - what other conclusion can you draw??
If it’s a lie, you can provide a cite. See below, liar.
Let’s see a quote.
Let’s see a quote. A recent one, where the President says the government will stand behind those Treasury instruments in the trust fund.
Go ahead. If you can produce a quote, since last fall when Bush started beating the Social Security ‘reform’ drums, where he says that debt is good and will be repaid, I’ll admit I’m wrong. But the tenor of his remarks has been exactly the opposite.
You know what? No. It is my belief that there is enough information in your own cites for any reasonable person to conclude that you are in error. Therefore I conclude that you are either a) clinically speaking, an idiot or b) lying. If someone besides you and the equally impaired or lying pantom expresses any doubt on this subject I’l re-evaluate that belief. Absent that, you’re going to have to live in your own world of delusion, whether it’s created by stupidity or malice.
Where’d I use the word “hate?” Where’d I say I “hate” Greenspan personally (as opposed to finding the cult of personality around the office of Fed Chairman, currently filled by him, offputting)? Ah – nowhere, I now find.
And I’m “probably a conspiracy theorist?” Are you clairvoyant? What color is my car, “probably?” With equal, no, more foundation in anything that I actually know, I likewise have this . . . this . . . revelatory E.S.P. vision, just like yours. It’s of someone who would make a statement like yours. And . . . to make such a statement, that person would be “probably an ad hominem jackass.” YE.S.P.MV.
My entire OP took a skeptical “so what?” attitude in the face what I posit as excessive deference and homage paid to one office or dude (I know nothing of Greenspan personally and don’t even disagree with all of his particular policy choices – I just don’t know that he’s the last word in all matters touching on money). “So what” is not exactly commensurate with anything as incandescent as the “hate” you ignorantly (and I use that word intentionally, because you don’t know anything about me and appear not to know anything about the attributes of actual hate) invoke.
There are interesting policy points to be made by taking my OP as a (perhaps mildly hyperbolic) challenge to the role of the Fed in what I claim are not-primarily-Fed-entrusted decisions (viz., is privitization of SS a worthy social goal in which the Fed will play a ministerial support role at most). You are not, evidently, one of those who’ll be perceiving or adding anything of value to any of those points.
I never called him a dictator and don’t know if anyone else did. I used the adjective “dictatorial” not in referring to him but to his tenure, i.e., his (apparent) infinitely-renewable grasp on his office, which I meant to hint was similar in effect to the (similarly perennial) terms awarded to or claimed by dictators. Yes, I know it’s all perfectly by the book as he keeps being reappointed. That wasn’t my point (and by the way, dictators have lawful life rule, if the laws say that’s the term of office, which they may). There’s a policy reason that most political offices and appointments turn over periodically, and when they don’t, by rule or as a de facto matter (infinite-term Congressmen, federal judges, J. Edgar Hoover), the potential for mischief or a lack of opposing viewpoints is inherently problematic. That’s the only comparison I made.
Hmm. Seems I’ve been promoted from being pro-terrorist, which would I suppose put me on the Ninth Ring of Hell, to merely being a liar.
Cool.
Anyway, manhattan, if you have any honesty at all, you could check, just as one example among thousands, any of the editorials of Thomas Donlan over at Barron’s, a publication I’m sure you’re familiar with, which beats the drum over the idea that the trust fund is a fraud. I know what the provenance of Bush’s plan is, and I know it started with people like him. I know you know that too.
So, tell me, who’s the liar?
Dear gawd, I really have to hang out here more. manny, there’s an entire thread devoted to this down in the Pit, called “Bush: There is no Trust”. Go find it. Your idiot-logical confreres are saying, in no uncertain terms, that the trust fund is a fraud. Shamelessly. No qualifiers. And yet you have the unmitigated gall to say, in this thread, that no one is saying these things.
I’m going away now. There’s only so many lies I can swallow at one time without exploding.
@Huertas You need to be careful where you tread, calling me a “jackass” is a pretty clear violation of GD rules, and I don’t want to see anyone get in any trouble.
As it is, I said you “probably” are a conspiracy theorist because in my opinion one would have to ascribe to some brand of conspiracy theorism if you believe that Alan Greenspan executes “dictatorial” powers.
As it is you still haven’t made a very good argument for us ignoring Greenspan. The man is an expert in his field and he was called upon to offer testimony. And just FYI it’s not like his testimony caused all the papers to send out an extra edition, it was just a blurb. It’s not like society is actually falling all over the place and fawning because the guy spoke.
Now that you’ve clarified yourself somewhat it’s obvious you just mispoke, as using the definitions you are now using it doesn’t make sense to use the adjective “dictatorial.” But obviously I’m not clairvoyant, and I have to work with what you give me, and you just said blanketly “dictatorial.”