Re: the future of social security/medicare
Speaking of which: http://faculty-web.at.northwestern.edu/economics/gordon/Productivity-Brookin gs.pdf -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Devine, James Sent: Tuesday, March 16, 2004 5:59 PM To: [EMAIL PROTECTED] Subject: Re: the future of social security/medicare the main danger to Social Security is not demographic. It's people like Greenspan and Bush. As Doug discovered years ago, the Trustees of the SS are low-balling estimates future economic growth, making the situation look much more dire than it is. -
the future of social security/medicare
andie nachgeborenen wrote: I do not expect to have Social Security or Medicare, for example. what did you folks think of kuttner's piece in business week (march 2004): if you have a BW online id (i do not): http://www.businessweek.com/premium/content/04_11/b3874042_mz007.htm?se=1 essentially, if i understand him correctly, he quotes a few reports, based on which he suggests that the funds will not run out by ~ 2025 (as feared), unless bush continues his tax cut strategy including making cuts permanent. --ravi
Re: the future of social security/medicare
The social security crisis is much inflated. As with any social inusrance system, the ratio of workers to retirees flattens as the system matures. But talk of a crisis is merely a wedge to open some political space for privatization, a scheme that would speed, rather than delay, the day of reckoning. Faster economic growth, lower unemployment, ora higher income cap, (roughly $88,000 this year) would make the crisis disappear. Joel Blau Original Message: - From: ravi [EMAIL PROTECTED] Date: Tue, 16 Mar 2004 14:16:09 -0500 To: [EMAIL PROTECTED] Subject: the future of social security/medicare andie nachgeborenen wrote: I do not expect to have Social Security or Medicare, for example. what did you folks think of kuttner's piece in business week (march 2004): if you have a BW online id (i do not): http://www.businessweek.com/premium/content/04_11/b3874042_mz007.htm?se=1 essentially, if i understand him correctly, he quotes a few reports, based on which he suggests that the funds will not run out by ~ 2025 (as feared), unless bush continues his tax cut strategy including making cuts permanent. --ravi mail2web - Check your email from the web at http://mail2web.com/ .
Re: the future of social security/medicare
The social security crisis is *not* much inflated--it is pure fiction. The Trust Fund--containing only US Gov't bonds--is sufficient to pay all obligations for well over 50 years. The scarecrow is the threat that sometime before then, current social security/medicare receipts will fall below current total outlays. That would require either new borrowing or tax increases to buy back the bonds. So what!! For social security/medicare to be unable to meet expenses during our lifetime involves the US's default on its entire national debt. When that happens, social security/medicare finances will be far down on the list of national emergencies. Shane Mage When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly. When we read on a computer screen the doctrine of Pythagoras that all things are made of numbers, it seems self-evidently true. (N. Weiner) The social security crisis is much inflated. As with any social inusrance system, the ratio of workers to retirees flattens as the system matures. But talk of a crisis is merely a wedge to open some political space for privatization, a scheme that would speed, rather than delay, the day of reckoning. Faster economic growth, lower unemployment, ora higher income cap, (roughly $88,000 this year) would make the crisis disappear. Joel Blau Original Message: - From: ravi [EMAIL PROTECTED] Date: Tue, 16 Mar 2004 14:16:09 -0500 To: [EMAIL PROTECTED] Subject: the future of social security/medicare andie nachgeborenen wrote: I do not expect to have Social Security or Medicare, for example. what did you folks think of kuttner's piece in business week (march 2004): if you have a BW online id (i do not): http://www.businessweek.com/premium/content/04_11/b3874042_mz007.htm?se=1 essentially, if i understand him correctly, he quotes a few reports, based on which he suggests that the funds will not run out by ~ 2025 (as feared), unless bush continues his tax cut strategy including making cuts permanent. --ravi mail2web - Check your email from the web at http://mail2web.com/ .
Re: the future of social security/medicare
the main danger to Social Security is not demographic. It's people like Greenspan and Bush. As Doug discovered years ago, the Trustees of the SS are low-balling estimates future economic growth, making the situation look much more dire than it is. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine essentially, if i understand [Kuttner] correctly, he quotes a few reports, based on which he suggests that the funds will not run out by ~ 2025 (as feared), unless bush continues his tax cut strategy including making cuts permanent. --ravi here's the article: MARCH 15, 2004/BusinessWeek. ECONOMIC VIEWPOINT Social Security: Finally, An Honest Debate Federal Reserve Chairman Alan Greenspan lobbed a useful, if unintended, grenade into the Presidential campaign when he abruptly urged Congress to cut Social Security benefits. Until Greenspan's testimony, President George W. Bush had been insisting that we could have permanent revenue losses from his massive tax cuts without any harm to important social benefits. Even as Greenspan's testimony was reverberating in the country, Bush was out campaigning to make the tax cuts permanent. Greenspan's little explosion may have been aimed at social entitlements, but politically it will do far more damage to the Bush campaign by lighting up realities that Bush would prefer to keep hidden. CONSERVATIVE REPUBLICAN FOES of Social Security have been telling Americans for years that the country won't be able to afford the huge entitlements the government has promised them. This message serves the political purpose of shaking voters' faith in the Social Security system, especially younger voters, who start wondering if Social Security will be there for them. They are prompted to ask: If Social Security is going bankrupt and I'm not going to benefit anyway, why not shift my payroll taxes to private accounts now? This then plays into the political hands of Social Security's would-be privatizers. But let's pause a moment for some facts from the 2003 Social Security Trustees' Report. It turns out that the fiscal crisis of Social Security is grossly exaggerated by its political enemies. The trustees project Social Security balances forward for 75 years. Their report uses pessimistic annual growth assumptions of just 1.6%. Even so, the 75-year shortfall is projected at just $3.8 trillion, or just 0.73% of gross domestic product over this time. By contrast, the Bush tax cuts equal $8.7 trillion, or 1.68% of GDP over 75 years, according to Peter Orszag of the Brookings Institution, and new proposed tax cuts would push the cost to over $12 trillion. If the Bush tax cuts are pared back by less than half, the money can be used to replenish Social Security, and the vaunted crisis disappears. Whether to cut Social Security benefits for the 96% of Americans in the system or reduce tax cuts for the top 2% is, of course, a political choice. But it's one that the Bush Administration would rather not squarely face and one that Senators John Kerry and John Edwards will keep center stage in their campaigns. Higher growth rates could also solve the problem. In their 1997 report, the trustees projected that the trust funds would need supplements by 2029. Thanks to higher growth, last year's report extended that horizon to 2042. With productivity and the economy growing at a faster rate than assumed by the trustees, the year of Social Security insolvency could be pushed out even further to 2050, 2060, or maybe never. When the President's Committee on Economic Security reported to President Franklin D. Roosevelt in 1935, the committee recommended that once the system matured and more Americans were benefiting, payroll tax receipts should be supplemented by contributions from general revenues. Were it not for the wildly irresponsible permanent tax cuts, which blow a structural hole in the revenue system, this would be the time to add that revenue stream, and there would be ample funds to plug a manageable gap. All of the conservative proposals for restoring the Social Security system's health are different forms of cuts in benefits. Raising the retirement age is a reduction in benefits. So is fiddling with the cost-of-living formula. Partial privatization is the most costly and intellectually dishonest fix of all. Not only would it reduce the guaranteed part of the retire- ment package, but it would require the government to borrow $2 trillion to $4 trillion to keep paying benefits to current retirees while payroll taxes of younger Americans were diverted to new personal accounts. The President has insisted that, in the new privatized system, everyone would get benefits at least as good as those under Social Security. But that would require a government guarantee for the performance of everyone's financial portfolio. (Talk about moral hazard!) Greenspan, a conservative Republican, is at
Re: the future of social security/medicare
Thanks for providing the article James. I agree with your assessment 100%. Best, Mike B) = ...the safest course is to do nothing against one's conscience. With this secret, we can enjoy life and have no fear from death. Voltaire http://profiles.yahoo.com/swillsqueal __ Do you Yahoo!? Yahoo! Mail - More reliable, more storage, less spam http://mail.yahoo.com
Re: the future of social security/medicare
The main danger to SS is that they want to loot it. It's such a nice pile of $$; why should the worker yahoos get it? In fact, they've been looting it for years. Joanna Devine, James wrote: the main danger to Social Security is not demographic. It's people like Greenspan and Bush. As Doug discovered years ago, the Trustees of the SS are low-balling estimates future economic growth, making the situation look much more dire than it is. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine essentially, if i understand [Kuttner] correctly, he quotes a few reports, based on which he suggests that the funds will not run out by ~ 2025 (as feared), unless bush continues his tax cut strategy including making cuts permanent. --ravi here's the article: MARCH 15, 2004/BusinessWeek. ECONOMIC VIEWPOINT Social Security: Finally, An Honest Debate Federal Reserve Chairman Alan Greenspan lobbed a useful, if unintended, grenade into the Presidential campaign when he abruptly urged Congress to cut Social Security benefits. Until Greenspan's testimony, President George W. Bush had been insisting that we could have permanent revenue losses from his massive tax cuts without any harm to important social benefits. Even as Greenspan's testimony was reverberating in the country, Bush was out campaigning to make the tax cuts permanent. Greenspan's little explosion may have been aimed at social entitlements, but politically it will do far more damage to the Bush campaign by lighting up realities that Bush would prefer to keep hidden. CONSERVATIVE REPUBLICAN FOES of Social Security have been telling Americans for years that the country won't be able to afford the huge entitlements the government has promised them. This message serves the political purpose of shaking voters' faith in the Social Security system, especially younger voters, who start wondering if Social Security will be there for them. They are prompted to ask: If Social Security is going bankrupt and I'm not going to benefit anyway, why not shift my payroll taxes to private accounts now? This then plays into the political hands of Social Security's would-be privatizers. But let's pause a moment for some facts from the 2003 Social Security Trustees' Report. It turns out that the fiscal crisis of Social Security is grossly exaggerated by its political enemies. The trustees project Social Security balances forward for 75 years. Their report uses pessimistic annual growth assumptions of just 1.6%. Even so, the 75-year shortfall is projected at just $3.8 trillion, or just 0.73% of gross domestic product over this time. By contrast, the Bush tax cuts equal $8.7 trillion, or 1.68% of GDP over 75 years, according to Peter Orszag of the Brookings Institution, and new proposed tax cuts would push the cost to over $12 trillion. If the Bush tax cuts are pared back by less than half, the money can be used to replenish Social Security, and the vaunted crisis disappears. Whether to cut Social Security benefits for the 96% of Americans in the system or reduce tax cuts for the top 2% is, of course, a political choice. But it's one that the Bush Administration would rather not squarely face and one that Senators John Kerry and John Edwards will keep center stage in their campaigns. Higher growth rates could also solve the problem. In their 1997 report, the trustees projected that the trust funds would need supplements by 2029. Thanks to higher growth, last year's report extended that horizon to 2042. With productivity and the economy growing at a faster rate than assumed by the trustees, the year of Social Security insolvency could be pushed out even further to 2050, 2060, or maybe never. When the President's Committee on Economic Security reported to President Franklin D. Roosevelt in 1935, the committee recommended that once the system matured and more Americans were benefiting, payroll tax receipts should be supplemented by contributions from general revenues. Were it not for the wildly irresponsible permanent tax cuts, which blow a structural hole in the revenue system, this would be the time to add that revenue stream, and there would be ample funds to plug a manageable gap. All of the conservative proposals for restoring the Social Security system's health are different forms of cuts in benefits. Raising the retirement age is a reduction in benefits. So is fiddling with the cost-of-living formula. Partial privatization is the most costly and intellectually dishonest fix of all. Not only would it reduce the guaranteed part of the retire- ment package, but it would require the government to borrow $2 trillion to $4 trillion to keep paying benefits to current retirees while payroll taxes of younger Americans were diverted to new personal accounts. The President has insisted that, in the new privatized system, everyone would get benefits at least as good as those under Social Security. But that would require a government
Re: the future of social security/medicare
you're welcome. But I think it's good for everyone to keep the number of these thank you or right on! type e-mails to a minimum. There are too many pen-l missives already. And what with all the spam and virus-driven e-mail, my box is flooded. Jim D. -Original Message- From: Mike Ballard [mailto:[EMAIL PROTECTED] Sent: Tue 3/16/2004 4:25 PM To: [EMAIL PROTECTED] Cc: Subject: Re: [PEN-L] the future of social security/medicare Thanks for providing the article James. I agree with your assessment 100%. Best, Mike B) = ...the safest course is to do nothing against one's conscience. With this secret, we can enjoy life and have no fear from death. Voltaire http://profiles.yahoo.com/swillsqueal __ Do you Yahoo!? Yahoo! Mail - More reliable, more storage, less spam http://mail.yahoo.com
