# Social Security debate (again): Whats to be done? **URL:** \ **Category:** Great Debates\ **Created:** [May 26, 2005, 3:10pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610 "2005-05-26T15:10:55Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 26, 2005, 8:52pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/41 "2005-05-26T20:52:23Z")
> [@yanceylebeef](#): > > The main quote that jumped out at me is: > “Peter Orszag, a senior fellow at the nonpartisan Brookings Institution, estimates that the president’s tax cuts will forfeit $11 trillion over the next 75 years. By comparison, Social Security trustees put the retirement plan’s shortfall at $3.7 trillion over the same period.” Even if this number is true (I’ll provisionally take it as so), you are advocating a pretty fundamental change to the SS system. > [@yanceylebeef](#): > > Another is this: “Analysts acknowledge that 75-year forecasts for both taxes and Social Security have their limitations. They rely on educated guesses about economic trends and cannot anticipate changes in law or unexpected events such as war and natural disaster.” > > I agree wholeheartedly here. We really have no idea what is going to happen next week, let alone in 75 years. Look at the difference now compared to the boom of the 90’s. Ok…but then that kind of also calls into question that $11 trillion figure from above, no? 🙂 > [@yanceylebeef](#): > > I can’t cut and paste the PDF but the second and third paragraphs are the relevant ones. Go back and see my post #8…both Balls 2003 and 2004 plan are discussed. [Factcheck.org](http://Factcheck.org) disagrees with you that either is viable long term, but this gets back into those 75 year projections. Check it out though. > [@yanceylebeef](#): > > I’d have to agree with Rjung that the Dems don’t need to supply a plan if the President won’t. He has created this “Crisis” out of whole cloth, lets see his plan. This seems contridictory to me. If you acknowledge that SS needs fixing (and you cite Ball, who is proposing some fairly radical changes to keep the system going), then how has Bush manufactured this "‘Crisis’ out of whole clothe’? And if you acknowledge that there is a potential problem, then why WOULDN’T the Dems want to propose a plan as well? -XT ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [May 26, 2005, 9:06pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/42 "2005-05-26T21:06:33Z")
> [@UncleBeer](#): > > The “trust fund” is, and always has been, nothing but a pile of IOU’s in the form of federal government securities; a “promise” to pay these “borrowed” assets at their maturity from the general fund. Agreed. And if the federal government would accept the fact that now those IOU’s must be repaid out of the general fund where the money disappeared to, the sooner this ‘crisis’ will end. All future SS obligations should come out of the federal budget, and taxes should raised to cover it. The President and the Republican Congress just lack the accountability to do the honorable thing. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [May 26, 2005, 9:08pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/43 "2005-05-26T21:08:43Z")
> [@xtisme](#): > > Um…you realize that if Bush uses the Thrift Savings Plan (TSP) model (which is what Bush claims he is going to be using) to manage the individual accounts that you are talking about something on the order of less than a dollar per every $10k invested, right? Not exactly a huge windfall for those corporate investor types, and certainly not how I’d define ‘corporate welfare’. Or were you talking about something else? Um, do you get _all_ your information from Jim Angle, or do you spend the extra time to filter out other sources before defaulting to that position anyway? I grant the major beneficiaries will be the fund managers, vs. CEOs, but as the present TSP for Federal employees is run very much like your standard 401k, I cannot fathom the pubbie numbers claiming this isn’t a huge cash infusion for the private sector. You might look into [Austan Goolsbee](http://gsbwww.uchicago.edu/fac/austan.goolsbee/research/ssecfees.pdf)’s study claiming a trillion-dollar winfall just for Wall Street over the next 75 years. This is more than a four-hundred-fold increase in business over what the Street currently earns from the roughly three-and-a-half million people who presently take advantage of the lauded TSP. Some 40% of the eligible workforce saves nothing right now for their retirement. Of the 60% that do, certainly not all of them utilize 401k’s or similar investment plans (even if they can), nor have any of their investments in stocks. It seems we’re on the verge of making 100% of the eligble workforce stock investors. How is it possible private interests will not benefit hugely from such a cash infusion? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 26, 2005, 9:21pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/44 "2005-05-26T21:21:05Z")
> [@Loopydude](#): > > Um, do you get all your information from Jim Angle, or do you spend the extra time to filter out other sources before defaulting to that position anyway? Um, considering I’m only vaguely aware of who Jim Angle is, I’d have to say the answer is ‘no’ to that question. Nice try though. 🙂 In point of fact, I got this tidbit from the [same source](http://www.factcheck.org/article310.html) I got the idea from the OP…factcheck.org. Just happens I was on that site today catching up after not having looked at it much recently. I’ve seen this debated other places though too. Unless you are going to claim [factcheck.org](http://factcheck.org) isa Pub biased site of course. > [@](#): > > Summary > > New information turned up by [FactCheck.org](http://FactCheck.org) shows that the type of private Social Security accounts being proposed by President Bush would yield very little profit to the securities industry, contrary to persistent claims of a potentially huge “windfall” to Wall Street. > > What we have discovered is that the model for Bush’s accounts – the Federal Thrift Savings Plan for federal workers – actually paid securities firms a net total of only 16 cents for every $10,000 in workers accounts. The TSP had refused to make that information public – until now. It shows that fees actually being paid to Wall Street are hundreds of times smaller than some critics had assumed. > > For that reason and others we find that ads run in Louisiana by the liberal Democratic group Campaign for America’s Future are grossly misleading. The group is accusing Republican Rep. James McCrery, who is chairman of the Social Security subcommittee and a supporter of Bush’s private accounts, of “corruption” for accepting campaign donations from Wall Street, which it falsely claims will “profit most” from private accounts. I was wrong about one part though…its 16 cents for every $10k, not around a dollar: > [@](#): > > We looked closely at how much the TSP actually pays the securities industry to manage those funds – and it turns out to be astonishingly little.According to the most recent audited financial statement of the Federal Retirement Thrift Savings Investment Board, the TSP had $129 billion in assets in 2003, and paid just over $3.7 million in “Investment Expenses.” The statement also shows that those fees were partially offset by $1.6 million in “asset manager rebates” paid to the TSP, reducing the net total paid to Wall Street to just under $2.1 million. That works out to just 16 pennies for every $10,000 in assets. (For a copy of the financial statement with the relevant items highlighted, see “supporting documents” at right.) All this assumes that Bush in fact is going to use that model…which I did conceed when I wrote that other post. Seems likely though, as he’s stated he will be using a similar system. > [@Loopydude](#): > > How is it possible private interests will not benefit hugely from such a cash infusion? Guess it all depends on your initial assumptions. Assuming Bush really is planning on using the TSP model (which he’s stated he is using as the basis for his currently sketchy program), I don’t think you can really make the case that it will be a huge windfall for the private interests. -XT ---
**Author:** ![rjung](https://avatars.discourse-cdn.com/v4/letter/r/45deac/32.png) [@rjung](https://boards.straightdope.com/u/rjung)\ **Post date:** [May 26, 2005, 9:29pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/45 "2005-05-26T21:29:46Z")
> [@Debaser](#): > > “By most accounts”? Most left leaning media sources and interest groups like the AARP maybe. Yes, everyone knows the AARP is a hotbed of radical leftist socialism. :rolleyes: > [@Debaser](#): > > The crisis was touted by those on the left like Bill Clinton using rhetoric like “crisis” before Bush was ever president. Just because there’s some turbulence on the flight doesn’t mean everyone has to _jump out of the airplane NOW!_ ---
**Author:** ![19ForMe](https://avatars.discourse-cdn.com/v4/letter/1/439d5e/32.png) [@19ForMe](https://boards.straightdope.com/u/19ForMe)\ **Post date:** [May 26, 2005, 9:36pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/46 "2005-05-26T21:36:42Z")
Can’t we widen the base of participants? I’ve seen the following suggestions to save the program without creating private accounts: 1. raise the tax rate 2. raise the cap 3. reduce the COLA adjustments 4. raise the retirement age All the solutions that save the program tend to be short term. Since short term is about 50 years, it seems reasonable to make those changes since no one can make a model that far out. I wonder, has anyone suggested this: 1. include more workers Maybe I’m wrong but aren’t there millions of state, local and military workers that are exempt from the system? Why not put them and their salaries into the net? ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [May 26, 2005, 9:56pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/47 "2005-05-26T21:56:02Z")
Well, those numbers certainly are vastly different than what other economists are quoting. I’m not sure who to believe at this point, but it still strikes me as seemingly impossible that govt.-mandated investment isn’t a windfall of such proportions that the private sector wouldn’t invest mightily, collectively, to lobby and sell us on the idea. I sure as hell don’t trust Bush by himself, but I thank you for the other cites, and I guess the best I can say at this point is I’ll read more. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [May 26, 2005, 10:08pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/48 "2005-05-26T22:08:03Z")
Gah. Responding to **xtisme** , if that wasn’t obvious. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 26, 2005, 10:23pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/49 "2005-05-26T22:23:20Z")
Loopydude, if you haven’t already, read through the link I gave. Its possible we are talking about two different things…though if you are talking about what I think you are, I don’t see how investing more in our industries in this country has a downside. That aspect would be win/win I should think. Anyway, read through it and then if you have some other cites I’d certainly be willing to look em over too. Thats why I started this thread, to get back up to speed on this issue…been out of the loop for a while now. -XT ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [May 26, 2005, 10:30pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/50 "2005-05-26T22:30:22Z")
OK. Gotta admit I’m in a wasted state at this point, and post here largely when I’ve got twenty minutes betwee step 3 and step 4 of a 14-step whatever I happen to be doing to meet some deadlines. But it’s part of being a good citizen and all, so I’ll try to contribute more from intelligent sources who still have their minds. ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [May 27, 2005, 2:20am UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/51 "2005-05-27T02:20:01Z")
> [@19ForMe](#): > > Maybe I’m wrong but aren’t there millions of state, local and military workers that are exempt from the system? Why not put them and their salaries into the net? Don’t know about military but I’ve been a state employee for 27 years and have never been exempt from SS. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [May 27, 2005, 2:33am UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/52 "2005-05-27T02:33:46Z")
> [@Debaser](#): > > I never even said the “P” word but you still had to go there. You’re hardly the only person ever to bring that comparison up, you know. The observation was \*not \* addressed to you, even in spirit, so please get over yourself. That particular myth is a very common one, surely you’ve come across it before, and indulging in mythology of any type does not help address the problems - \*whoever \* indulges in them. May we assume that _no one_ here will attempt to do so? I’m fine with a combination of increasing the cap and adding a sliding means test as a way of addressing the reducing worker/recipient ratio, the fundamental problem here along with habitual deficit spending in general. It would be superficially satisfying to see SS be a separate fund, separately taxed, but so would it be to see any other government function clearly linked to its own funding source and not intermingled. But it doesn’t really matter much as long as total expenditures do not exceed total revenues. SS is just one of many obligations the government has, and far from the only inflexible one. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [May 27, 2005, 4:07am UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/53 "2005-05-27T04:07:07Z")
> [@19ForMe](#): > > Maybe I’m wrong but aren’t there millions of state, local and military workers that are exempt from the system? Why not put them and their salaries into the net? Used to be, but Federal Workers switched from CSRS (no FICA but you don’t get SS) to FERS (FICA, but you get SS, and there’s the Thrift savings plan) about 20 years ago. Still a few workers on the old plan, sure, but darn few. Most state workers pay into FICA. Dunno about Military… ---
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [May 27, 2005, 1:43pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/54 "2005-05-27T13:43:50Z")
> [@Monocracy](#): > > The baby boom generation is just a hump we have to get over. These guys aren’t going to live forever. When they start dropping off, the ratio of retirees to workers will get better. I could be wrong, but I think after the baby boom there was a drop off in birth rate and population increase for the US. That’s the problem, we’re not growing like we were. I think the ratio of workers to retirees will remain small just as the parent to child ratio remains small. ---
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [May 27, 2005, 1:47pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/55 "2005-05-27T13:47:43Z")
> [@Loopydude](#): > > I’m not sure who to believe at this point, but it still strikes me as seemingly impossible that govt.-mandated investment isn’t a windfall of such proportions that the private sector wouldn’t invest mightily, collectively, to lobby and sell us on the idea. You do know that you could put your money in bonds or T-bills, right? ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [May 27, 2005, 2:00pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/56 "2005-05-27T14:00:56Z")
> [@kidchameleon](#): > > You do know that you could put your money in bonds or T-bills, right? Why would you do that when they’re essentially worthless. You know, like a whole bunch of them sitting in a filing cabinet drawer would have no value? 😃 ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [May 27, 2005, 2:01pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/57 "2005-05-27T14:01:12Z")
When SS was set up 9under president roosevelt), two classes of workers were exempted: -railroad workers (they have their own RR Fund) -agricultural (ie. farm slave) laborers Now I understand that the railroad Retirement Fund is well-endowed, and railroad pensions are quite good. Why doesn’t SS migrate over to what these people enjoy? In sum then: -SS has been looted over the years (harry truman “borrowed” from it to finance the Korean War -benefits are being paid to perpetrators of criminal fraud (e.g. “crazy money”) -benefits are being paid to the heirs of deceased recipients (in foreign countries)-with ABSOLUTELY NO controls on this! But none of our political :"leaders’ have any intention about addressing any of this. they talk, but do nothing. ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [May 27, 2005, 2:05pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/58 "2005-05-27T14:05:57Z")
I’m reasonably sure that Generation Y is slightly larger than the baby boom. Checking… [http://users.metro2000.net/~stabbott/genxintro.htm](http://users.metro2000.net/~stabbott/genxintro.htm) > [@That webpage](#): > > How many of us are there? Not many. Using the '65-'75 dates, there are about 47 million of us. Census Bureau figures show that we will finally outnumber the Boomers, in 2040, by 39.6 to their 37.1 million. Of course, by then the Boomlet/Y-Generation will amount to 73.4 million, ---
**Author:** ![zenith](https://avatars.discourse-cdn.com/v4/letter/z/e19b73/32.png) [@zenith](https://boards.straightdope.com/u/zenith)\ **Post date:** [May 28, 2005, 1:20pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/59 "2005-05-28T13:20:17Z")
I don’t think the Baby Boomers are a big problem for SS because I don’t think most of us will live into our 90s as our parents’ generation (at least the females) have. A lot of us used drugs from questionable sources. Little enough is known about the long-term effects of these substances in pure form, let alone in combination with adulterants. It’s doubtful that David Crosby will attain anywhere near the longevity of Bing Crosby. In the summer, most of us who spent our formative years in the 50s,60s and, early 70s were routinely exposed to heavy fogs of the now-banned DDT every summer. Is this why so many non-smoking, non-drinking, non-farming individuals like my wife have developed lymphomas of a type formerly lnked to heavy drinkers, heavy smokers, or agricultural chemical applicators? Though the lymphoma is largely curable by chemo and radiation, don’t these treatments themselves take years off one’s life? The federal government admits that lies were told about the public health risks associated with above-ground nuclear testing and various experiments studying radiation dispersal through the air and water. Women in today’s economy can’t just stay home and watch kids the way so many women of past generations did. Women are catching up to men in the areas of heart disease and other stress-related illness. Our folks didn’t have to care for decrepit parents when they were in their 50s and 60s. Most of my peers didn’t have grandparents left by high school graduation time. Most of my peers’ parents were under 50 when their own parents died. Surely, the frustrations of dealing with elder-care creates stresses that past 55-to-70 year-old generations didn’t have to deal with. Stress is a killer. If the government grossly overcollects taxes to meet a funding crisis and that crisis never materializes, will our children and grandchildren get some combination of refunds and/or lowered taxes and/or bigger retirement checks and/or lowered retirement ages? I’d prefer waiting a few more years to see whether or not the first Boomer retirees die off faster or slower than their parents before giving the government big tax increases. Politicians rarely repeal taxes ( at least where the bottom 80% of us are concerned). ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [May 28, 2005, 3:51pm UTC](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610/60 "2005-05-28T15:51:58Z")
> [@kidchameleon](#): > > You do know that you could put your money in bonds or T-bills, right? Are you serious? That’s the other option? So, if the govt. is going to default on SS payouts, why won’t it default on T-Bills? They figure all the other investment in stocks will prevent this? And if there’s a market crash? [Previous page](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610.md?page=2) [Next page](https://boards.straightdope.com/t/social-security-debate-again-whats-to-be-done/305610.md?page=4)