[QUOTE=pervert] justwannano, I’m afraid you’ve completely lost me.
I agree that blaming various administrations for current problems is not very productive. Blaming Bush for the practices of the last 20 years seems particularly silly. Especially given his heroic efforts to do something about those proactices.
Blaming Bush for the practices of the last 20 years seems particularly silly.
How about blaming him for the practices of the last 4+ years.
He pointed out that SS is in trouble yet he did not, in his previous term say Hey lets not use anymore of that money so at least we’re not hurting it more.
And Sir IMHO GWB is not no hero.
If the tax cuts had not taken place, (and assuming for a moment that this had not other economic effects) the government would have a certain amount of extra money And would still have borrowed the SS trust fund.
But the tax cut did take place.
That left SS more vulnerable…
What GWB did was cut taxes to the rich and then use money (SS trust) sorely needed by the less fortunate to perpetuate his “no new taxes” statement. Then declared 4 years later that SS was in trouble and his[u/] first and only plan has been to cripple it forever. There is your hero.
Blaming SS for our budgetary problems is not productive as some on your side of the argument have pointed out. But blaming the rest of government for the SS problems is at least equally unproductive.
I’ll give you that if we can agree not to include it in any discussion on why some younger workers feel paying back SS is part of the reason to dump it.
I’m not sure why. I was simply stating that SS has been a sacred cow for many decades. At this point it is an unremarkable observation.
Well silly me. I thought it was a political ploy by GWB for reelection backing.
Well, actually, he did. He mentioned SS reform in the campaign. What he did not do was propose the sorts of changes he is proposing now.
Yea, I know. I like to tweak liberals now and then. It’s a vice of mine.
No, it did not. The legislation controlling SS mandates that the surplus be invested in Treasury bonds. With or without the tax cuts (again, even assuming the only difference would be more money for the government) the surplus collected during the last 4 years would still have been borrowed by the government and spent on various programs. There was literally very little Bush could have done about this.
everyon who paid taxes got a cut.
the SS trust was spent on all sorts of programs. And would have been regardless of the cut.
3)The no new taxes statement was his father’s.
Bush has been saying that SS is in trouble for much longer than the last few months. Its only recently that anyone listens.
5)There is no evidence that his plan will cripple SS. On the contrary, many agree that it will make the plan much more sustainable. The more reasonable objections are that it will cost too much or that it reduces benifits too much.
Just for the record, GWB is not a hero of mine. I think his willingness to take on SS reform is heroic. It has traditionally been the third rail of politics. Not because that’s where the power is, but because it has always been a good way to commit suicide.
But no body is seriously considering dumping it at all. The plan is simply to alter the equation used to calculate benifits and add a small privatized account as an incentive.
I don’t think so. First of all GWB cannot be reelected. Secondly, SS reform has traditionally been political suicide. Especially any sort of talk about lowering benifits. Even in the far future.
It contains some very good arguments against Bush’s plan by jshore.
Since I could not get a good pointer as to how to analyze the price index change relative to the goal of preventing elderly poverty, I did a little digging myself.
According to this site The poverty threshold for someon 65 or older in 1985 (the oldest data on that site) was an anual income of $5156. According to the same site, the threshold in 2003 was $8825. According to this site, $5156 was worth $8,816.24 in 2003 (the last year it will calculate to).
A very rough and shallow analysis, I admit. But it would seem that adjusting benifits by the price index might, in fact, allow the one goal of preventing elderly poverty to be met. Are there other goals of SS which are more important? Am I wrong to focus on this one?
This is so far above my head, and I think it shouldn’t be.
I’m 18 years old, and I don’t know what Social Security is. I know that it comes out of my paychecks. I know that old people get it. I know that it’s a big issue right now (and for people my age, right?).
I don’t know exactly how it works or what the issue is, though. I hate numbers, and I don’t like fancy, technical political stuff. I want to be informed, though.
5)There is no evidence that his plan will cripple SS. On the contrary, many agree that it will make the plan much more sustainable. The more reasonable objections are that it will cost too much or that it reduces benifits too much.
Ah cmon.
His plan calls for taking part of the contributions and investing it. You cannot take part of the whole away and not negatively affect it. Why would you need evidence to understand that?
I don’t think so. First of all GWB cannot be reelected. Secondly, SS reform has traditionally been political suicide. Especially any sort of talk about lowering benifits. Even in the far future.
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You said it yourself
Well, actually, he did. He mentioned SS reform in the campaign. What he did not do was propose the sorts of changes he is proposing now.
And
4) Bush has been saying that SS is in trouble for much longer than the last few months. Its only recently that anyone listens.
But…so what?
Today, this kid is swimming with the sharks, if he thinks he doesn’t need to watch out for his future.
I’m doing the best thing I honestly can for him. I’m trying to wise him up.
Nah, I laughed at it. He doesn’t know me at all. I’ve been my own teacher for a long time now.
I agree whole heartedly that people need to take it upon themselves to learn this stuff (the school thing was actually supposed to be facetious, like “yeah right”). But, I’m just thinking, how are regular citizens going to go about doing this? You pretty much have to specialize in this stuff to be able to sort it all out and make sense of it.
Oh, hey Bosda, do you mean to say that it was ok in your day to not watch out for one’s future?
You are wrong about the plan. You are wrong about the logic of your position. And just to be thorough, you are admitting an ignorance, even a disdain, of evidence. Allow me to help.
The plan currently under consideration calls for a small amount of individuals contributions to be set aside from the general SS fund and invested for those individuals retirment benifits. The amount of benifits said individuals are allowed from the general fund will be reduced by an amount corresponding to the amount they elect to set aside. Looked at that way, there is no money being removed from the SS system at all. It is merely being invested differently, and accounted for differently.
It is certainly possible to take a part of a whole and invest it without reducing the whole. That is the whole point of investing.
Finally, I find it highly irresponsible to claim knowledge of any sort that does not require evidence. You may feel some sort of supiriority by saying that your position does not need evidence. I tend to look on such assertions as baseless and thus utterly ignorable.
But your quotes demonstrate that he has talked about these changes for a long time. Back in 2000, there were very little details in the mainstream media. There still are not very many. What Bush has done is call for a major restructuring of SS in order to save it. Your criticism amounts to saying that he is hypocritical because he did not do something sooner.
pervert, thanks for the links! I will re-quote them here, along with some definitions, just to consolidate things into a single handy reference post:
This is a discussion of the details of actual proposals (not necessarily fully fleshed-out yet, but as much as is currently available) to modify Social Security by incorporating private investment accounts into it (among other changes).
The proposal provided last year by the President’s Commission to Strengthen Social Security as its “Plan 2” will henceforth be referred to as “CSSS2”, at least by me. I’ll draw for the details mostly on the Congressional Budget Office analysis of CSSS2 published last summer, and also linked by pervert in an earlier post.
CSSS2 shares some features with the closest thing we currently have to a formal proposal on Social Security from the Bush Administration, which is discussed in some (although not complete) detail in this transcript of a background briefing on the February White House press conference on Social Security. I’ll refer to this latter proposal as the “Bush Plan”. (When and if the Administration formally proposes an official Social Security plan, we can call this “Bush Plan Zero” or something to distinguish it from later versions.)
The chief issues to be addressed, IMO, are:
What will the proposed plan(s) do to solve the projected medium-term SS funding crisis?
What will the proposed plan(s) do to promote long-term financial stability for SS beyond the medium term?
What will the proposed private investment accounts accomplish in terms of SS funding?
What will be the effect(s) of the proposed plan(s) on SS benefits, retirement incomes, and poverty among retirees?
What will be the effect(s) of the proposed plan(s) on SS payroll taxes?
What will be the financial impact of the proposed plan(s) on the rest of the budget, from transition costs for the private accounts and/or savings or costs to general revenues?
There, does that sound like a reasonable agenda for discussion? If there are no objections, I’ll start getting down to brass tacks in my next post.
pervert:The plan currently under consideration calls for a small amount of individuals contributions to be set aside from the general SS fund and invested for those individuals retirment benifits. The amount of benifits said individuals are allowed from the general fund will be reduced by an amount corresponding to the amount they elect to set aside. Looked at that way, there is no money being removed from the SS system at all. It is merely being invested differently, and accounted for differently.
Brief digression: I haven’t been following the discussion between pervert and justwannano very closely, so I apologize if I’m misinterpreting something, but this seems like an incomplete response.
pervert is right that according to the Bush Plan, the SS contributions diverted to private investments would have no net long-term effect on SS revenues. However, in the short term they would have a significant effect: namely, those contributions would be diverted from their original purpose of funding current benefits for current retirees. And that missing money would have to be made up somehow.
Making up for diverting those contributions is what’s called the “transition costs”: the temporary double burden of switching from the “pay for your parents” system that we’ve got now to the proposed (partial) “pay for yourself” one.
In that sense, justwannano is right that “taking away” these contributions to put them into individual accounts for future retirees will “negatively affect the whole” of the amount available to pay benefits for current retirees.
Let me try to simplify it. using GWB’s dates.
SS will start seeing trouble in 2018. So lets take some money away from the SS contributions . That way we will save SS.
It don’t take no genius to see that it won’t work.
Fluff all you want thats what he proposed.
Yes, but he is proposing to take that money from the SS trust fund and invest it in other vehicles. He is not even proposing to use that money for anything but retirment benifits. You’re right about one thing, though. It does not take a genious to see that the proposal has some merit.
Let me illuminate it this way. You regularly recieve a paycheck which you studiously deposit into your wallet. One day you decide that you are going to take a small amount of that paycheck from now on and invest it, say, in a savings account. By your logic, you have actually reduced your total amount of money. I think, however, we can both agree that this is a silly way to look at it.
BTW, 2018 is not the date when the trouble starts. It has already started. In 2008 the rate of growth in the trust fund will begin to decline. By 2018*, the payroll taxes will no longer be enough to pay the expenses of SS. The system will have to begin drawing down its trust fund. Finally, sometime around 2045 the trust fund will be exhausted.
*I’ve heard different dates for this event. It could happen as late as 2025 by some calculations. And, just to be ruthlessly honest, it may happen a bit sooner under the Bush plan I mentioned above.
[QUTOE]Making up for diverting those contributions is what’s called the “transition costs”: the temporary double burden of switching from the “pay for your parents” system that we’ve got now to the proposed (partial) “pay for yourself” one.
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Quite so. I agree with this.
In this sense, however, I don’t agree. A good deal of money is now being invested in a “Social Security Trust Fund”. This consists of special treasury notes. Basically IOUs from one part of the government to another. Moving some of the money from this one investment scheme to another does not, in my mind, constitute a removal of funds at all. I agree that it moves the date when the trust fund will have to begin paying for SS benifits, but even this is not anyting like a removal of funds.
Now, if you want to show that significant proportions of the private account funds would in fact never be available for use as retirement benifits, then you might be able to show those funds were in fact “removed”. Otherwise IMHO, you have to take the position that the money put into the trust fund itself was removed from SS since it was not used to pay for current benificiaries. I could be wrong, but this does not seem like the position you want to take.
There is a lot of room to argue that investing some of the payroll taxes in privately invested mutual funds is not a good thing to do. But, again IMHO, there does not seem to be much merit in the idea that such an investment involves a removal of funds from SS.
One more quick thought, and then I’ll let you have the last word on whether or not the transition costs are removed from SS.
Didn’t your earlier argument about the security of private accounts rely on the idea that the money was still largely government controlled? Didn’t you, in fact, note that there may be no practical difference in money placed into heavily regulated but nominally private government accounts and money simply held in trust by the Social Security Administration? I know my argument that an essential principle difference between the two scenarios could be turned around on me here.
If as I claimed there is an essential principle difference between private accounts and SS, then purhaps, indeed the money is being taken out of SS altogether. I would, of course, point out that even under this interpretation of things all of the money “taken from” SS will be used to reduce future expenses.
Lastly, let me illustrate my point with another example. Lets suppose that the government found some other way to invest payroll taxes. Purchasing stocks itself, for instance, or even, purhaps, purchasing bonds in other countries. If it did so with up to 4% of the pyroll tax revenue, would you seriously claim that such an investment was a “taking away” from social security?
OK, you can have the last word on this point. Let’s ge back to the idea of wether or not the proposed reforms would save or sink SS. I am particularly interested in your thoughts regarding point 4 of your previous post.
