----- Original Message -----
From: "Erik Reuter" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[email protected]>
Sent: Tuesday, January 04, 2005 7:23 PM
Subject: Re: Social Security
> On Tue, Jan 04, 2005 at 12:01:56PM -0600, Gary Denton wrote:
>
> > For example, if the "price indexing" change is made, "a retiree in
> > 2075 would receive 54 percent of the benefits now promised."
>
> No. A retiree in 2075 is just being born today or just a few years
old
> at the most. Such a person has not been promised anything. Only
people
> who pay into social security have an implied promise of benefits.
>
> > If this system had been in place since Social Security's
inception,
> > people today would be retiring with a benefit tied to the living
> > standard of the 1930s, when 40 percent of households lacked indoor
> > plumbing.
>
> Straw man. Today the standard of living is quite comfortable. They
are
> talking about indexing it to TODAY's standard of living, not 1930's.
>
> > THE DIRTY LITTLE SECRET OF PRIVATIZATION: Bush's plan for private
> > accounts is being sold as a plan for younger workers to benefit
from
> > the higher returns of the stock market. Don't believe the hype.
>
> The dirty little secret of this shrill rant is that SOMEBODY has to
> pay, no matter what you do. These bozos pretend that people are
somehow
> entitled to live like kings and that nobody has to pay for it. Don't
> believe the hype.
>
> You can pay more in taxes now (and force future generations to pay
> more in taxes later) and let the government mishandle your
retirement
> savings, or you can pay less in taxes now, and save for retirement
> yourself.
>
> The government shouldn't be in the business of providing a complete
> retirement plan. The old age insurance portion of Social Security is
a
> SAFETY NET -- it should guarantee a minimum level for people who
can't
> or don't save enough to support themselves in their old age. It
should
> NOT be expected to provide most or all of the retirement savings for
> most people.
>
> The current standard of living is more than sufficient to provide
> as a minimum level. Indexing to current cost of living is perfectly
> reasonable.
>
> > explains: "The bonds in the Social Security trust fund are
obligations
> > of the federal government's general fund, the budget outside
Social
> > Security. They have the same status as U.S. bonds owned by
Japanese
> > pension funds and the government of China.
>
> Not quite. SS's bonds cannot be sold on the bond market. That means
> their value cannot be as accurately measured, since there is no
market
> for them.
>
> > The general fund is legally obliged to pay the interest and
principal
> > on those bonds, and Social Security is legally obliged to pay full
> > benefits as long as there is money in the trust fund."
>
> No doubt it will be paid. But how? Answer: by raising taxes,
borrowing
> more money (thus pushing up interest rates) or starting up the
printing
> press. All ways, you slow the economy. Not that the problem can be
> blamed entirely on SS (Bush should have been cutting spending along
with
> his tax cuts), but SS will exacerbate the problem. Bad times are
ahead.
>
Neither here nor there, but from Public Opinion Watch:
TNS poll of 1,004 adults for ABC News/Washington Post, released
December 20, 2004 (conducted December 16-19, 2004)
I recently mentioned that support for private accounts tends to plunge
precipitously when costs and trade-offs of these accounts are
mentioned. The new ABC News/Washington Post poll provides more
compelling evidence that this is the case and that, therefore, the
level of "hard" support for Social Security privatization is quite
low.
In the ABC/Washington Post poll, there is a slight majority (53
percent) in favor of "a plan in which people who chose to could invest
some of their Social Security contributions in the stock market." But
when a followup is asked ("What if setting up a stock-market option
for Social Security means the government has to borrow as much as two
trillion dollars to set it up, with that money to be paid back over
time through cost savings from the current system?"), that 53 percent
is cut in half, so only 24 percent of the public winds up favoring
private accounts if that kind of borrowing is necessary to set them
up. That's bad news for Bush, since it appears that the administration
plans to advocate just that sort of borrowing to set up these
accounts.
Yet more bad news for the administration is the public's expressed
interest in participating in such accounts if they were set up. Only
37 percent say they would personally put some of their Social Security
money in such an account, given that they would "get higher Social
Security benefits if the stock market went up, but lower Social
Security benefits if the stock market went down." Significantly,
people who don't expect to receive their full benefits from Social
Security are no more likely to say they would participate in these
accounts than are those who expect to receive full benefits. That
undercuts one of the key selling points of the administration's plan.
So the public doesn't support private accounts, given the costs of
setting up such accounts, and expresses little enthusiasm for
participating in these accounts, even if they were available. If Bush
is hoping for a groundswell of public opinion to push his
privatization proposal over the top, he'd better think again.
xponent
Opinions About News Maru
rob
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