On Sun, Dec 19, 2004 at 03:19:38PM -0600, Gary Denton wrote: > SS reform is a huge and unnecessary boondoogle and payoff to the > favored finacial corporations.
How's that? > SS isn't in trouble Wrong. SS has troubles. We have promised more in benefits than we have currently set up the SS payroll tax to cover. Pay-as-you-go is a foolish system when we have politicians who aren't accountable for what they do. A politician can change policies today and be long gone before the consequences of the changes surface. Much better to get some accountability into the system by having as much of the money as possible be earmarked for the people who paid the money in. Then the politicians will have a lot harder time misusing it. > it can pay benfits until 2052 according to latest estimates. At that > time the be in balance they would have to cut benefits by 20%. To get > it in balance indefinately would take some minor fixes now or over the > next decade.. It gets less minor the longer you wait, unless you break your promises to people. Millions of people who will be alive in 2052 are today expecting certain benefits. It is quite reasonable to think about the best way to handle that NOW. > Privatization would cost $1 to $2 trillion dollars over the first 10 > years. No, privatization would cost very little if done correctly. I suspect you are getting confused by money that has been implicity promised to people becoming explicit on the books. But this is not a cost. The promise has been made, accounting for it is just a detail. If you are talking about the costs of investing the money, that is much less than your figure. There are index funds today that are run on 0.1% of assets a year. An index fund of the size we are talking about would benefit from more economies of scale and could be run for less, I'd guess less than 0.05%. If the average size of the SS account is $3 trillion during the first decade, then administration costs would be about $15 billion over a decade. > The argument is being mad to avoid going into debt forty years from > now let's go into further debt now. We ARE in debt now, unless you intend to break the promises that have been made to people who have contributed and are contributing to SS now. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
