Two points: 1) By overusing the word, he is pounding into the heads of public that there is one. He easily could have went about his conference without the repetition or rather the reinforcement of a lie. 2) That’s the meat of the issue then. You perceive a problem, when in fact there is none.
Additionally, his echo chamber in the media is going beyond using the word problem, going as far as saying crisis, going bankrupt, [SS] in trouble. All outlets for the administrations message.
In fact, according to the Congressional Budget Office estimates, Social Security can be made solvent throughout its seventy five year planning period with a tax increase that is less than one quarter as large as the one in the eighties, which to my recollection was less than 3.5%. According to the Social Security trustees’ projections, the average after-Social Security tax wage for a worker in 2050, will still be more than 70 percent higher than it is today, even if taxes are raised to keep the program solvent. The CBO projections imply an even larger increase in after-tax wages.
In reality, that’s exactly what will happen under bush’s plan. More on this later. However, if the ceiling were raised to $110,000 to cover 90 percent of the country’s income from wages (the level set by the Greenspan commission in 1983), it would eliminate approximately 40 percent of the projected funding shortfall. Using the CBO projections, this change alone would be almost enough to make the program solvent through the seventy-five year planning period.
And I just showed you why it won’t have to happen that way.
Actually it is quite true. You are in no position to make a judgement as to how long is long as I can remember.
I have and I have proven every reason given by a bush backer to be outright wrong or based on lies or their decision was for selfish reasons. The fact they choose to believe lies and are repulsed by facts and truth, in my eyes make them quite stupid.
Actually you haven’t. All you suggested is worst case scenarios which I have shown to not be the case.
First off, if bush does decide to go ahead with his plan, I want out completely and out of any government mandated program set up to replace the system. The likelihood of me gaining any substantial gains in any of his plans is not sufficient enough for me. Unfortunately, the message I’m getting is that I won’t have a choice, but rather I must hand my money to boys on Wall Street. I could be wrong on that, but I am sure I will not be allowed to do what I want with the money if I don’t want to play the market.
Why do I want out? Because bush’s proposal gradually shrinks the traditional guaranteed Social Security so that it will eventually become irrelevant for middle income workers. For today’s twenty year old average wage earners, the guaranteed benefit will be equal to just 15 percent of their annual earnings when they reach retirement age. The guaranteed benefit will be equal to just 7 percent of annual earnings for a child born ten years from now.
Why else is his plan bad? Because as it’s been said, the new method would raise benefits in line with cost of living. Using this thought, let’s play a game of “what if.” What if this concept was used about 70 years ago when indoor plumbing and telephones were not in every home, but rather a small percentage. Let me use an arbitrary number just for discussion-30%.
Let’s fast forward 25 years where the transition from luxury to necessity was the result of a rising standard of living, driven by rising real wages and now over 90% of homes have indoor plumbing and phones. If the purchasing power of retirees had been held at 1935 levels, a telephone would still be beyond the means of the typical Social Security recipient.
Okay, screwing old people is fine by you. How about those maybe more in your age group? Analysts have said that benefits for an average earning worker who retired in 2037 at age 67 (someone aged 34 today) would be 20 percent lower than they are now given historical rates of return over a fifty-year period. The numbers don’t get any better the younger you are.
Now let’s address your numbers as stated in the reports. It found that the federal budget deficit would be more than 1 percent of GDP higher every year for roughly two decades, with the highest increase being 1.6 percent of GDP in 2022. The national debt levels would be increased by an amount equal to 23.6 percent of GDP in 2036. That means that, thirty-two years from now, the debt burden for every man, woman, and child would be $132,000 higher because of privatization. By way of comparison, today’s federal deficit is about 3.6 percent of GDP and the federal debt is about 63 percent of GDP. So for years to come, privatization would increase federal deficits by more than 40 percent and the national debt by more than one-third.
One impact of these numbers after privatization is that interest rates are likely to be substantially higher, raising the cost to the average household of mortgages, car loans, student loans, credit cards and so on. As a result, the economy would be likely to grow more slowly than it would otherwise.
Creating private accounts with increased federal borrowing at first glance would seem unlikely to affect national savings, because additional savings in the new accounts would offset exactly any new government borrowing to pay for those accounts. Can you see how increased national savings, especially in a country with savings levels as low as they are here, can increase growth by keeping interest rates low and financing investments in productive activities? Privatization is actually more likely to reduce than increase national savings.
Again I emphasize a lot depends on whether you retire when the market is up or down. Someone, no let’s say an average worker since they will be most affected, who invested his or her retirement fund in a stock portfolio that matched the S& P’s 500 index and cashed out upon retirement in March 2000 would have a nest egg almost a third larger than someone who retired just a year later using exactly the same investment strategy. Of course, that is because the stock market plunged over those twelve months. Sure the argument is that at least he has more money, but my point is now assumed money is not a way plan a retirement payout.
Okay, you say, but all bush’s plans require retirees to convert the lump sums in their personal accounts into annuities that provide them with monthly payments until their death. But it is unlikely that those annuity payments would increase in line with inflation, as today’s Social Security benefits do. Without inflation protection, the purchasing power of retirees’ pensions would fall precipitously during times when prices are rising rapidly. Because insurance companies would bear significant new risks for offering inflation protection, they would be likely to charge very substantial fees over and above the already steep 10 percent that they now charge.
Privatization could cost the government more. Many workers’ accounts would be so small that they would be of no interest to profit-making firms. Costs of administering so many small accounts would overwhelm any benefits to be gained from the stock market. The government would need to hire 10,000 highly trained (an oxymoron?) workers just to oversee the accounts and answer questions from workers. In contrast, today’s Social Security has minimal administrative costs amounting to less than 1 percent of annual revenues.
No, I didn’t. In choosing a leader, many things should be taken in consideration. His record of failures does not make me comfortable in making financial choices for my future. You seem to make decisions assuming nothing is connected to that decision. If entering into a business venture, and you are aware of some shady dealings with the one you will be dealing with, and if the info you have makes this guy’s intentions questionable, I would think you might be hesitant also. Maybe not, but I tend to be more pragmatic and that has worked for me.
http://www.washingtonmonthly.com/archives/individual/2004_12/005297.php
That’s just it, the fact is, is it isn’t broken. All I have gathered from your arguments is the rationale to claim it’s broken is a tax increase in the future. That’s hardly a definition to make such a claim as broken. If that were the case, whenever a municipality, or a state or even the federal government needs to raise taxes to pay for anything (salaries, infrastructure, etc.) it must be considered broken.
The fact is, Social Security is fine, it’s the general fund that’s in crisis, on account of the massive deficit. So borrowing more is precisely what not to do. Fix that first.
