The argument over Social Security privatization isn’t about rival views on how to secure the program’s future – even the administration admits that private accounts would do nothing to help the system’s finances. It’s a debate about what kind of society America should be.
And it’s a debate Republicans appear to be losing, because the public doesn’t share their view that it’s a good idea to expose middle-class families, whose lives have become steadily riskier over the past few decades, to even more risk. As soon as voters started to realize that private accounts would replace traditional Social Security benefits, not add to them, support for privatization collapsed.
But the Republicans’ loss may not be the Democrats’ gain, for two reasons. One is that some Democrats, in the name of centrism, echo Republican talking points. The other is that claims to be defending average families ring hollow when you defer to corporate interests on votes that matter.
Paul Krugman of the New York Times then goes on to lambast Senator Joseph Lieberman, who he calls The $600 Billion Man, for mindlessly repeating the Bush administration’s empty rhetoric, and for his own empty gesture of voting against the bankruptcy bill.
It isn’t always bad politics to say things that aren’t true and claim to support things you actually oppose: just look at who’s running the country. But Democrats who engage in these tactics right now create big problems for a party that has been given a special chance – maybe its last chance – to remind the country of what Democrats stand for, and why.
Read the whole thing.
FACT; In less than 15 years the current social security system will pay out more than it takes it.
FACT; Working Americans age 18-34 are more likely to believe in UFO’s than their Social Security check coming when they retire.
FACT; When it began, Social Security was supported by 16 workers for every one retiree, currently it is a 3 to 1 ratio, within 15 years, 1 to 1.
FACT; Historic return rates on bonds is 4 times that of the Social Security investments made by the government.
FACT; The dollars you currently pay in are not being set aside for you, rather they are paying todays retirees.
FACT; If you were born after 1970, you will never see a dime under the current system
Hail cut and pasting.
AV @ 1
We can always depend on you or Steve “in the Dell” to cut and paste Freeper talking points.
Hey Erik,
How do you feel about subsidising grandpas trip to the casino in his gas guzzling RV with 12% of your monthly retirement, which you will never see. Once again, you liberals attack the messenger, but do not dispute the validity of the message. A true sign of an invalid arguement and a weak mind.
So you are so busy harping on how the info is relayed to actually read it or comment on it rationally? If you don’t believe the facts then I guess you think Bill Clinton is the biggest liar to ever come down the pike?
Big quandry, huh?
Question for you “enlightend” and “progressive” ones. Why dont you ever dispute the merits of an arguement instead of attacking the messenger?
Is it due to the fact that the argument is valid? Or that you are intellectually incapable of reason? Or is it simply that you are full of venom and hate with nothing worthy to offer as a solution to a very complex issue? Please, I beg you, dispute the statements and prove them invalid, or offer some viable soloutions to the plethora of problems that this great nation faces in an increasingly uncertain future.
And FYI,
…but George Bush is a poopy head does not constitute a reasonable arguement.
Belief; In less than 15 years the current social security system will pay out more than it takes it.
Fact: This was well understood in 1983 and the government specifically re-engineered Social Security to push the solvency problem date out into the future and collect more money than needed right now, so as to create a trust fund. Since then, Congress has used that trust fund money for other general needs, and placed government bonds as IOUs. Those government bonds are the safest instrument of investment on earth, and will be paid back in all events short of a catastrophic US economic meltdown. These bonds will cover any SS shortfall until at least 2042.
Fact:The 2018 and 2042 dates are based on conservative projections of economic growth, and are likely to be pushed back if our economy continues to grow as strongly as it has (the original date wasn’t 2018, but 2013, for example).
Belief; Working Americans age 18-34 are more likely to believe in UFO’s than their Social Security check coming when they retire.
Fact:More than 60% of Bush supporters believe we discovered WMDs in Iraq and that a some of the 9/11 hijackers were Iraqi. More than 50% of people believe in astrology. More than 50% of people believe heavier objects fall faster. Yet we didn’t discover WMDs, the hijackers weren’t Iraqi, astrology is a load of bunk and all objects fall at the same rate due to a little thing known as gravity. People often believe false things.
Belief; Historic return rates on bonds is 4 times that of the Social Security investments made by the government.
Fact:This assumes projections over 70 years, ignores the effect of management fees, trading and retiring in a down-market. Sure, if you project over 70 years the market is a great investment, but if you are unlucky enough to be one of the millions retiring during one of the 5-10 year long bear markets, you’re screwed. What are you suggesting? Those people wait another 10 years to retire? As Chile and Britain discovered, the true rate of return on private accounts is often less than ½ what’s advertised – due to management fees and the effect of trading. Republicans are quite happy with the fact that the main beneficiaries of privatization will be Wall Street, not investors. The average person has ended up with less than 2/3 of what they would have received under the old state system, and some of these people end up requiring government assistance to avoiding being indigent in old age. More importantly, SS is an insurance program, and with that insurance you lose some potential for greater reward, but you also never lose your principal, like you can with nearly all investments.
Belief; The dollars you currently pay in are not being set aside for you, rather they are paying todays retirees.
Fact: So? The dollars you put into your bank aren’t set aside for you. They’re pooled with other people’s assets and invested by the bank. Yet you don’t panic when you go to the ATM, and the FDIC covers “worst case scenarios†of the bank making disastrous investments.
Lie; If you were born after 1970, you will never see a dime under the current system
Fact: This is categorically untrue. The system is solvent until at least 2042, based on what I’ve pointed out above. After 2042 or later, the system will still be able to pay 75-80% of its obligations without borrowing or making a single change to the way money is collected. That’s hardly “never see a dime”. Simple changes to the retirement age, eliminating/raising the wage cap and/or raising payroll taxes (last resort) will completely solve any SS solvency issues for as far as the eye can see.
Here are some more facts that you conveniently ignore:
Fact: Since solvency dates quoted above are based on pessimistic economic projections, true stock market returns will be much lower (when based on those same predictions). If the economy does well enough to provide the high rates of returns for the stock market that make private accounts “attractiveâ€, the solvency issue is also eliminated.
Fact: There are far greater and more immediate funding issues with other government programs like Medicare and new mandates like NCLB.
Fact: Bush’s plan includes 10s of trillions in borrowing, making the government’s deficit problem worse. If the whole point is for SS to avoid borrowing, why borrow trillions?
And finally,
Fact: The entire social security crisis is manufactured by people who have always hated the program and have been trying to eliminate SS for 60 years. Republicans simply don’t like the fact that Democrats are behind one of the most successful and well-liked social insurance programs in the history of the United States.
http://www.bopnews.com/archive.....curity.pdf
Angry Voter~
FACT. The system will begin to pay out more than it collects from the payroll tax,not more than it takes in.
FACT. A higher percentage of 18-34 year olds believed this in 1975 than believe today. They were wrong in 1975.
FACT. So what. The three workers today are overfunding the system and have been since the Reagan-Greenspan reforms in the 1970s.
FACT. To the extent that excess Social Security funds are invested, they are invested in government bonds, so how could the return on bonds be four times higher?
FACT. That is how the system was designed and how it has successfully worked since 1935.
FACT. You are wrong.
Paul Krugman? He was recently given this Left hook from fellow liberal Joe Klein on Meet the Press (`scuse me while I cut and paste)…
MR. KRUGMAN: “There’s a radical right challenge to America as we know it that’s under way, and I think the Democrats–I mean, maybe Hillary Clinton can do this. I’m actually not opposed to her, right? But they need to make clear that they are going to turn back that tide, not blur it.”
MR. KLEIN: “The answer to a radical right challenge isn’t a reactionary left response.”
Meet the Press transcript
Just figered enough people are attacking messengers, I ought to at least expose Paul Krugman as a rabid Dachshund.
jcricket @7
Good cut and past job (note to Goldy-preview?)…
Issuing bonds? That is precisely why it is a bad idea. I seem to recall you were one of those properly (IMO) railing against credit cards in the last open thread, but the same principle should apply to government.
jcricket@7
Uh, we were discussing Social Security and in “Fact” 3 you veer off into some rant about WMD. Can’t you “progressive” (e.g liberals) ever stay on topic?
From : SEC Website
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.
Decades later, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.
This sounds like the Social “Security” system.
Issuing bonds? That is precisely why it is a bad idea
Marks – To support your argument, I would say that Congress should not be allowed to raid funds set aside for one program to finance another. However, this has already occured, and they will be paid back starting in 2018 or later. The SS progam should not be punished because Congress decided to do something we now think of as less than fiscally prudent.
angry @ 1
“FACT; Working Americans age 18-34 are more likely to believe in UFO’s than their Social Security check coming when they retire.”
It may well be a fact that young workers believe this, but I see a very direct connection between the prevalence of this belief and the lying propaganda the right wing has been spewing about Social Security for decades.
jcricket @13
We agree, then, that horrible acts have taken place in the past on this subject matter. Our government has run amok with politicians’ promises to future generations, it is time to deal with them. I don’t expect they will, though they pretend such a course
“However, this has already occured, and they will be paid back starting in 2018 or later.The SS progam should not be punished because Congress decided to do something we now think of as less than fiscally prudent.”
Why should we allow a second horrible event transpire in the future when the government will have a lessened ability to stop the trainwreck which is coming? I prefer to get over the discomfort now, while we can afford to do something about it. Our demographics going into future years will continue to expand the retiree rolls, while a shrinking worker base will force our system to deal with such numbers in a dramatic fashion, and it won’t be pretty.
On this subject, I do not think there needs to be partisan sniping. It is a scandal for both political parties (and any other party) to fully engage in, and make it the kept promise of FDR and subsequent Presidents. If nothing happens now, when would a better time be? 2018?
VRWC @ 12
Comparing Social Security to a Ponzi scam is quite a long leap across a very wide chasm given that since 1935 tens of millions of Social Security beneficiaries have received every last cent that was promised to them.
angry @ 1
if you go to the s.s. website, they will show you what a liar gwdummy is, and you wont feel like running around with your skirt held up like that.
If nothing happens now, when would a better time be? 2018?
Yep, or perhaps even later. I don’t mean to be flip, but here are far more pressing problems right now, like the explosion of healthcare costs, and Medicare’s in real trouble. Bush’s Medicare drug program has actually exacerbated this particular issue.
As I’ve mentioned, the economic predictions the dates are based on have proven more conservative than the actual economy for the last 30 years. So while it’s still possible that the trust fund needs to be used starting in 2018, it’s more likely to come into play even later (2022, etc). And then we have government bonds, which are 100% safe. The only issue is that if we continue on Bush’s path we’re massively increasing the deficit and future debt payments, which might force further borrowing beginning in 2018 (or whenever). To reign in deficits we need not do anything to social secuity. Instead how about we eliminate the costly medicare drug program? Unfunded government mandates? How about rolling back Bush’s tax cut, which drained billions from the Federal Government’s tax collection/revenue (a la I-695 in WA).
My point is, if you want me to “deal with” something now, it won’t be Social Security but the policies that create the deficit. Eliminate the deficit and you’ll have no problem with the trust fund bonds, and Social Security’s easily sound until 2042 or 2050, which is far enough out that we’ll figure out the small course corrections we need to make once we deal with the “low hanging fruit” (to use a work expression).
(btw, it was hard to type my whole first respond in this little box – sorry for the missing paragraph breaks. Wasn’t a cut and paste issue, actually, since I wrote that myself. Nobody to blame for the formatting but me)
Once again, you liberals attack the messenger, but do not dispute the validity of the message.
The negative comments you got post were not so much from your position but from the fact that you cut and pasted something you found without any new comment at all.
What good does it do to have alternating Michael Moore and Limbaugh cut and pasted posts?
There are some good arguments in favor of Bush’s plan and classes it would favor. Why not make them?
Oh. And also using all caps in your post is like cranking your stereo in a parking lot.
I do not understand why the President is raising an alarm about the fact a fund will have expenses exceeding revenues sometime in the future when his administration raced to make the Federal Government’s operating budget expenditures exceed revenues almost immediately upon entering office.
The best investment vehicle available right now is contributing to the GOP. Since 2000, Republicans who contributed $4 billion to their party have gotten back $400 billion in tax breaks.
The best investment vehicle available right now is contributing to the GOP.
Yes. But only if you make more than 200k per year and/or believe you will inherit more than 10 million through inheritence.
FACT: Treasury bonds don’t count!
FACT: A system that’s been plugging away for the better part of a century and is the only part of the Federal Government not drowning in red ink needs to borrow from the part that is.
FACT: Old people smell
FACT: Dog food isn’t as bad as people say
FACT: Well maybe the UFO’s will take the old people away, and we won’t have to deal with them.
FACT: The US worker hasn’t gotten more productive since 1934. Technology hasn’t improved in any way, shape or form. Otherwise the 16:1 ratio declining would look like I pulled it out of my ass.
FACT: Because someone posted it in the blog comments, it must be true!
Hey Erik – To defend the people (or at least myself) posting counter-arguments to AV, I didn’t cut and paste any of my post from anywhere but my own mind (and yes, I became educated on this subject by reading many sources, it’s not like any of us can do source-level research on this topic). And the link I pointed to is hardly a “Michael Moore” far-left-wing place. It’s kind of a false equivalency to state that because the posts on opposite sides of the issue were of equal length and contained arguments sourced from elsewhere that both are equally valid/invalid.
Angry Voter – Your entire first post contained false assertions and several responses offered direct, factual refutations of every point (and more) in your original post. But instead of looking at those posts and possibly offering a counter-argument, you claim that we didn’t “dispute the validity” of the message. That’s totally disengenous of you, and exposes the lack of substance behind your side of the social security debate.
I didn’t cut and paste any of my post from anywhere but my own mind (and yes, I became educated on this subject by reading many sources, it’s not like any of us can do source-level research on this topic). And the link I pointed to is hardly a “Michael Moore” far-left-wing place
I believe you.
Erik @ 25
Oh dang! Those pesky details! I guess that means all the rednecks who voted for Bush are gonna get bit in the ass!
The fact that everybody here on both sides of the fence is talking about this and we know it is an upcoming issue is over half the battle. Hell even Bill Clinton frightened eveybody in one of his “state of the union” addresses with the very same thing that Bush is talking about now. Social Security insolvency. What was his solution????? Privatization.
It is so interesting that there is this fervor over the dialogue now. I sure don’t remember it then.
You ever think maybe this is a plan? Get everybody talking about it? Frighten our legislators into taking action?
You know. You wouldn’t want to have to give Bush or his administration credit for something. Even though he ripped it from Clinton.
I didnt cut and paste anything, the facts are the facts. Your demigod Bill Clinton was the Commander in Chief when Social Security put out most of the info I relayed. Just because jcricket says it is or isnt so, doesnt make it valid.
But in my world of fact and reason, I check on my opponents arguements, which is what I plan on doing with crickets retort. Firing off a bunch of responses 10 seconds after my post leads me to the conclusion that you are cutting and pasting, did Paul Berendt send you the talking points?
Read the trustees report on SS… Here is the link.
http://www.ssa.gov/OACT/TR/TR04/index.html
It is clear, that if you were born after 1970, you are getting the short end of the stick (or cane in this case). At best, your benifits will be reduced over 27% of what you paid in. Worst, you never see a penny.
Don@17,
That is the problem. Those that have received Social Security have received way more than they ever put in. Doesn’t that also happen in a Ponzi scheme? And those late comers (the childrena and grand children of today) are the ones to finance the early joiners – again as in a Ponzi scheme. Yeah, this scheme has lasted a long time, but it is unsustainable. Hey, if I wasn’t going to be the generation left holding the bag when this thing collapses, I wouldn’t be complaining either. But in order to keep the current system going in perpetuity, the birth rate would have to skyrocket. It isn’t happening.
Why was it that when Bill Clinton said there was a crisis, all the Democrats went along lock toscvk and barrel. Now that those same words come out of Bush’s mouth, it is an evil plot to kill the “system”. even Danial Patrick Moynahan agreed with private accounts.
Finally, the Social Security system is not something the government grants us out of the kindness of its heart. That is our money it has taken from us and our employers. Once again, a perfect example of liberals cofiscating people’s money and then making them beg to get it back to the liberals can pat themselve on the back for their good “social” conscience.
). At best, your benifits will be reduced over 27% of what you paid in. Worst, you never see a penny.
Chuck – I’ve read the trustees report, and the PDF I linked to comments directly on the assertions made in that report. Here’s a summary quote:
And then it refutes your “worst…” point:
More importantly, if you want to push off the shortfall by increasing the surplus now, simply raising the wage cap on SS contributions from $90,000 to $110,000 will eliminate 40% of the shortfall, and keeps SS solvent for the next 75 years (at least). Note that people who make more than about $90k currently pay less, as a percentage of their income, than those that earn less than $90k.
Also note that your comments about the amount of money you will receive apply even more strongly to privitization – “At best, you’ll see slightly more than you would now. At worst, you’ll lose every single cent you put in. And on average, you’ll end up worse than you would even with the SS shortfall.” Don’t forget there absolutely no guarantees with the stock market, so if you retire in a down market, get bad financial advice, have your return eaten up by high-cost mutual funds, you’re SOL.
SS is not like a 401k or an IRA. It is a social insurance program that has worked remarkably well over the last 75 years. And with a minor tweak or two, it will continue to work just as well (if not better) for the next 75.
substitute “Angry Voter” for “Chuck” in the post above. My apologies
And for those of you that don’t want to scroll up, here’s the report PDF link again: http://www.bopnews.com/archive.....curity.pdf
The non-partisan CBO (which has a high rate of historical accuracy, during both democratic and republican administrations) also has predictions that put the SS problem-date out farther into the future (2052 or later).
cricket@35
Raising the wage cap sounds reasonable to me. Why shouldn’t ALL wages be subject to Social Security?
Raising the wage cap and the retirement age are useful ideas. Taking out a giant loan to pay back the money we stole over the last 20 years, is not.
Re Clinton: Clinton NEVER advocated for carve-out accounts. He never even advocated for add-on accounts. What he was referring to was Social Security investing part its fund in stocks and bonds–not citizens.
There isn’t the slightest relationship between what Clinton called for, and what Bush wants. The former wanted to save SS; the Bush administration literally seeks to get rid of it.
Another interesting read at the s.s. site, is the interviews with the former directors. My favorite is the interview with Myers, a republican by the way.
VRWC @ 34
So you think it’s a problem that Social Security beneficiaries have always received all the benefits they were promised? Ain’t that just like a Republican. Well, don’t worry, your boy Bush is working hard to fix THAT, yesireee.
P.S. …
I suppose you prefer the corporate model? Private pension plans are underfunded by nearly a trillion dollars and apparently are going to need a taxpayer bailout. Well okay, Republican, you go ahead and retire on your company’s pension plan and if getting Social Security is your scruples don’t sign up for it — I’m sure SSA will let you leave your money in the kitty for those who really need it, if you ask them nicely enough.