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Greenspan fumbles
Social Security ball
With money, Alan Greenspan knows his math, but he can't add 2 and 2 when it comes to politics. Testifying before Congress last week, the Federal Reserve chairman tossed out a few bombshells about Social Security, warning it eventually could bust the federal budget.
His cure: Hike the eligibility age for the retirement system and start skimping on benefits.
Greenspan dreads the coming old age of the baby boomer generation and the cost this massive demographic will inflict on the nation's biggest entitlement.
He's right - it will cost a bundle. But he's wrong fiscally and morally. Not that it matters, since his proposal is politically lethal. Name one elected official who would risk the wrath of 78million voters.
In seven years, the oldest of the boomers will begin collecting Social Security. Most of them, now in midcareer, don't have pensions, as their parents did. Their 401(k)s got flattened during the recent recession. Oh, and they happen to constitute more than 40% of the electorate. Do you think the slipper-lickers in Congress are ready to take on the most potent voting bloc in U.S. history?
Greenspan might also rethink the supposed economic merits of downgrading Social Security, a pillar of U.S. life since its 1935 inception. The program is solvent until 2042, at least. In fact, it runs a huge surplus, some of which Washington pols greedily divert to pet projects. Greenspan is correct that eventually the system will start to run large deficits - but "eventually" in this case stretches out over 75 years.
That's a very long time. By then, the economy could have bulked up more rapidly than experts project, given the effects of innovation and technology. And even if growth can't solve the problem, Congress can.
Washington wastes billions a year on pork-barrel projects, such as this year's doozie, an indoor rainforest in Iowa. It lavishes $20 billion a year on farm subsidies. It does zilch to stop the rich from dodging taxes with shady loopholes and off-shore banking ploys. The IRS estimates that $250 billion in taxes go uncollected annually.
If the federal government would, over the next few decades, address just half of this inequity, there would be more than enough money to keep Social Security solvent forever.
"Our government is morally obligated to honor its commitment to Social Security," says Julius Edelstein. He should know. The 92-year-old New Yorker wrote speeches for Sen. Robert Wagner, an architect of the Social Security Act, and was chief of staff to Gov. Herbert Lehman, one of Social Security's key champions. Edelstein himself wrote several amendments to the act.
"The framers of Social Security intended for each succeeding generation to be able to depend on it," says Edelstein.
"It's a trust that shouldn't be broken," says Manhattan District Attorney Robert Morgenthau, whose father, Henry, as Treasury secretary, helped devise the fiscal mechanism that made Social Security possible. "My father would have strongly opposed any reduction in Social Security benefits. He believed people who worked all their lives and paid into the system were entitled to be taken care of in their senior years."
Sad that Alan Greenspan would break that trust.
Published in NY Daily News
Polititians who succeed in killing SS will shoot themselves in the foot in more ways than one. Any who survive the wrath of the baby boomers would find themselves suddenly without one of the biggest influxes of free money the government has ever known. Meaning they would have to beg steal or borrow all that money some other way.
edgarblythe wrote:Guess what, jar; it ain't your money. The money that's due to me ain't. I've paid into the system more than fifty years. SS has taken in plenty of money to keep itself solvent forever. It's the govt.'s plundering of the money that creates a sense of looming disaster. The payoff is a piddly check compared to what a person needs. I will fight every way I know how to ensure the checks keep coming. If the government were to apply sound business practices to overseeing SS there would be no crisis at all.
News flash: I'm the one that busts my ass 60 hours/week. That IS my money, until the gov't extorts it from my paychecks & redistributes it to others.
Had you planned properly for retirement, you wouldn't have to suckle the public tit. I'm planning properly. i will never have to collect a welfare check from the government.
They don't distribute any of your money to me through SS, jarlaxle. As I already pointed out, I have payed into the system to carry my own weight. You are not going to be paying me a cent when I start drawing SS in September. You ain't no martyr; you ain't being robbed to support me.
Bull. The money you paid in is long gone. The money I pay in is being used to support the current retirees (like you). It's a giant Ponzi scheme.
edgarblythe wrote:They don't distribute any of your money to me through SS, jarlaxle. As I already pointed out, I have payed into the system to carry my own weight. You are not going to be paying me a cent when I start drawing SS in September. You ain't no martyr; you ain't being robbed to support me.
You might want to send the SSA a request for your lifetime contibutions and compare it to your estimated payments. Provided you retire at 65 and live an average life expectancy you'll find that the benefits that will be paid to you will GREATLY exceed what you've paid into the system.
What the averge person pays in over their lifetime is paid back to them in the first 4 years or so of collecting. After that it
is welfare. You've certianly worked for it and it is your right to collect it but the idea that you'll be carrying you own load is pure bunk.
It isn't welfare at all. If the money is handled correctly, which it isn't, it should be handled like any other mass of money; that is, used to collect interest or whatever. SS money should be able to grow through legitemate business methods. If instead the money is pilfered by unscrupulous politicians within the government, to be used for other programs, which it is, that incompetency should not relieve the government of its contract with me. Bottom line, I have indeed carried my share of the load.
BBB
I will be lucky if I receive all the SS money deducted from my earnings during my lifetime unless I live to a very old age. Why? Because I didn't retire until age 72. I'm now 74. I've also saved for my old age, too. So don't mess with my Social Security insurance benefits!
BBB
