fishin' wrote:mesquite wrote:One thing that I have not seen talked about is how the private accounts would disproportionately affect the benefits of lower income workers. Under the current system's formula, the retirement benefit is heavily weighted to the lower end of earnings.
It hasn't been talked about because there is no information avalaible of what the revised formula might be (if it is even revised at all). As a result there is no basis your your speculation here. The formula could just as easily maintain the current weighting.
So you envision the private accounts as possibly having a weighted formula applied to them? Very strange.
fishin' wrote:mesquite wrote:The private accounts would be directly related to what was paid in, thus favoring those of higher incomes. This probably sounds good to those conservatives that favor regressive taxation.
Being that the proposed maximum annual deposit into the private accounts would be $1000 and it is direct trade-off between putting it into your private acount or paying it into the current system If you consider anyon ethat earn more than $16,000/year to be "higher income" then yeah, it would benefit those "rich people".
A person would be in the income range where they are earning less than $16,000/year to not reach the $1000 mark. If they are in that situation then opting for a personal account would be a bad choice and they should elect not to do it. That's exactly why the proposal is for an optional system. If it doesn't make sense for the individual to do it then they shouldn't.
When you factor in the retirement benefit of the combined government portion and private account the poor could actually make out substantially better. Someone that earns $16,000 year could put their entire SS contribution into their private account and pay
nothing into the SS system and still collect both the government share of SS (even though they may never have paid into it!) plus have their private account.
I have not seen anything about a $1000 max, but I have seen 4% of pay as the figure suggested for the private accounts. That is roughly 1/3 of the total contribution (12.4%) per individual.
4% of $16000 = $640
12.4% of $16000 = $1984
You have some really fuzzy math going on in your $16000 examples above. It doesn't correlate with anything I have seen written about the President's plan.
I think the answer about the SS running out years from now is to simply raise taxes among the wealthiest of Americans and put the money in a locked box and make it a penalty if someone spends it on other things besides SS.
Why won't that work?
mesquite wrote:So you envision the private accounts as possibly having a weighted formula applied to them? Very strange.
What I envision is that any private system will only be a part of the total package and the government portion will maintain a weighting system that is comparable to the existing structure. A person that is poor through their entire life would get retirement (both the government portion and their personal account if they have one) that would be at the system floor even if their earnings wouldn't otherwise justify that amount.
I would also expect that there will be a cap on the amount an individual would be able to withdraw from their personal account so that people don't deplete the entire account in their first few years of retirement.
The amount of any offset to the government system also depends on how much you contribute to your private account. The less you privatize the less the offset.
Between the three of those you maintain a weighting system comparable to what we currently have.
mesquite wrote:I have not seen anything about a $1000 max, but I have seen 4% of pay as the figure suggested for the private accounts. That is roughly 1/3 of the total contribution (12.4%) per individual.
4% of $16000 = $640
12.4% of $16000 = $1984
You have some really fuzzy math going on in your $16000 examples above. It doesn't correlate with anything I have seen written about the President's plan.
The leading plan, as far as what has been outlined on it thusfar, does have a $1000/year max contribution to the private account. None of the proposed plans I've seen allow unlimited contributions.
The current proposal doesn't take 4% each pay period. It allows you to take 100% of SS (the full 12.4% of your gross pay) and deposit that into your personal account until you reach the $1000 max annual contribution. At that point the 12.4% from each additional paycheck goes into the current SS system and nothing goes into your personal account. This is one of the flaws in the proposal that I see. There is a built-in assumption that a person will earn a consistant wage throughout the year and that, IMO, is a poor assumption to make. It ignores issues with seasonal workers, people that take a 2nd job for a part of the year or someone that loses their job during the year.
Quote:The leading plan, as far as what has been outlined on it thusfar, does have a $1000/year max contribution to the private account. None of the proposed plans I've seen allow unlimited contributions.
Massive changes are too scary for the populace to accept. You have to sneak things up on them...
Cycloptichorn
More indication the administration is having trouble selling this, and he certainly doesn't want anyone finding out it's a bad idea!
Newsletter Criticizing Bush Plan Censored
A federal government union newsletter denounces Bush's plan to privatize social security.
Under a union contract since 1978, the federal government is obligated to distribute the newsletter to the union's 7500 members.
The Bush administration ignores the contract and refuses to distribute the newsletter criticizing Bush.
So far par for the course censorship and illegal behavior by the administration.
But get this for hypocrisy of the nth order: the Bush administration is referring the matter to the Labor Department's inspector general for possible criminal prosecution for violating federal anti-lobbying laws. Yep, the Bush administration is horrified, yes horrified that public money might in any way be used to influence public policy.
This is of course the same administration that puts newspaper and radio columnists on payroll to push its agenda and announced plans last month to use Social Security Administration employees to convince the public that Social Security is in a crisis and needs private accounts to fix things....
Read the Rest Here
squinney wrote:More indication the administration is having trouble selling this, and he certainly doesn't want anyone finding out it's a bad idea!
Newsletter Criticizing Bush Plan Censored
A federal government union newsletter denounces Bush's plan to privatize social security.
Under a union contract since 1978, the federal government is obligated to distribute the newsletter to the union's 7500 members.
The Bush administration ignores the contract and refuses to distribute the newsletter criticizing Bush.
So far par for the course censorship and illegal behavior by the administration.
But get this for hypocrisy of the nth order: the Bush administration is referring the matter to the Labor Department's inspector general for possible criminal prosecution for violating federal anti-lobbying laws. Yep, the Bush administration is horrified, yes horrified that public money might in any way be used to influence public policy.
This is of course the same administration that puts newspaper and radio columnists on payroll to push its agenda and announced plans last month to use Social Security Administration employees to convince the public that Social Security is in a crisis and needs private accounts to fix things....
Read the Rest Here
It doesn't bother me, I don't think there should be unions in the first place anymore. I don't see the need for unions due to the people I have seen "protected" by unions. Most of them have been lazy slackers who couldn't proform their jobs any longer and the only reason they weren't fired was because of the union. It only protectes the lazy.
It's not about unions good or bad, baldi.
Baldimo wrote:
It doesn't bother me, I don't think there should be unions in the first place anymore. I don't see the need for unions due to the people I have seen "protected" by unions. Most of them have been lazy slackers who couldn't proform their jobs any longer and the only reason they weren't fired was because of the union. It only protectes the lazy.
Say Baldimo, do you feel the same way about high paid professionals that work under contracts so tight that they cannot be dismissed for poor performance without paying for the time left on their contract? You see this all the time with college coaches, school district superintendents, city managers, CEOs etc.
squinney wrote:It's not about unions good or bad, baldi.
Well sure it's about unions, they are trying to be a power broker in the world of politics. They don't want the SS reform to get in the way of their "retirement" benefits, which appear good until the potential of SS reform is laid out. SS reform looks much better and will be much better.
NY Times editorial.
As he stumps for Social Security privatization, President George W. Bush always gets a big round of applause for promising that the money in a private account could be passed on to one's heirs. If those happy clappers only knew the details..
Under the president's proposal, when you retired you would not be able to start spending the money in your private account until after you bought an annuity, a financial contract in which you hand over a lump-sum payment and, in return, get a monthly stream of income for life..
The upside of buying such an annuity is that you're protected against outliving all of your money. The downside is that even if you died immediately after retirement, the most your heirs would inherit would be the amount that remained in your private account after you had paid for the mandatory annuity. The government would require that annuities be large enough to keep recipients above the poverty line for life. So the less you had to start with, the less you'd have left over after buying the annuity..
One issue that raises big doubts about whether that money could be inherited is the question of how the trillions of dollars the government would borrow to set up a privatized system would be repaid..
Under the president's proposal, when you retired, your traditional Social Security retirement benefit would be cut by an amount equal to all the deposits you had made into your private account plus interest..
The benefit cut would be a contribution toward repaying the huge debt the Bush administration would take on to "pay for" privatization..
But if you died before you retired, you would have already used some of that borrowed money to set up the private account and yet would never have made any contribution to repaying the debt. In that case, how would the government recoup your share of the amount it had borrowed? Well, it could let your share of the debt go unpaid - in effect bequeathing to your heirs and their fellow citizens ever-higher deficits. Or your spouse could inherit your private account and the benefit cut that went with it. Or the government could take its cut from your private account before the money went to your survivors - a grab that could wipe out your stash..
The White House would hotly deny that the last alternative could happen. Nothing freaks out the Bush administration more than the suggestion that the government would ever tap someone's private account - even for money that is owed to the government. It doesn't, however, seem too bothered about gutting your traditional benefits. Go figure..
You've probably never heard of Jim McCrery, but he has tremendous power over your financial future.
He's President Bush's man charged to push Social Security privatization through the House of Representatives. McCrery will be the guy who makes key decisions like... whose Social Security benefits get cut and by how much? How much money will Wall Street make off the deal? Do we increase our national debt by $2 trillion to fund Bush's scheme?
As if that weren't enough to get your attention, here's something even more disturbing: McCrery's accepted nearly $200,000 in campaign contributions from the very Wall Street firms that stand to benefit the most from privatization.
It's hard to imagine how McCrery could possibly represent the interests of the people who depend on Social Security when he's in the back pocket of the Wall Street firms looking to unravel it.
au1929 wrote:NY Times editorial.
As he stumps for Social Security privatization, President George W. Bush always gets a big round of applause for promising that the money in a private account could be passed on to one's heirs. If those happy clappers only knew the details..
Under the president's proposal, when you retired you would not be able to start spending the money in your private account until after you bought an annuity, a financial contract in which you hand over a lump-sum payment and, in return, get a monthly stream of income for life..
The upside of buying such an annuity is that you're protected against outliving all of your money. The downside is that even if you died immediately after retirement, the most your heirs would inherit would be the amount that remained in your private account after you had paid for the mandatory annuity. The government would require that annuities be large enough to keep recipients above the poverty line for life. So the less you had to start with, the less you'd have left over after buying the annuity..
One issue that raises big doubts about whether that money could be inherited is the question of how the trillions of dollars the government would borrow to set up a privatized system would be repaid..
Under the president's proposal, when you retired, your traditional Social Security retirement benefit would be cut by an amount equal to all the deposits you had made into your private account plus interest..
The benefit cut would be a contribution toward repaying the huge debt the Bush administration would take on to "pay for" privatization..
But if you died before you retired, you would have already used some of that borrowed money to set up the private account and yet would never have made any contribution to repaying the debt. In that case, how would the government recoup your share of the amount it had borrowed? Well, it could let your share of the debt go unpaid - in effect bequeathing to your heirs and their fellow citizens ever-higher deficits. Or your spouse could inherit your private account and the benefit cut that went with it. Or the government could take its cut from your private account before the money went to your survivors - a grab that could wipe out your stash..
The White House would hotly deny that the last alternative could happen. Nothing freaks out the Bush administration more than the suggestion that the government would ever tap someone's private account - even for money that is owed to the government. It doesn't, however, seem too bothered about gutting your traditional benefits. Go figure..
You mean to tell me that someone that writes an editorial page for the NY Times doesn't like a proposal put forth by the President? I'm shocked and dismayed by this.
Does the editorial page of the NY Times ever show any support for what Bush wants to do or had done? Answer me this and we might have something.
Baldimo
Ridiculous question but I guess to be expected. Facts are facts Bush is pushing a plan that will destroy Social Security. The Bush plan by his own admission will not address the anticipated short fall in social security. However, it will adds trillions to the deficit and add unacceptable risk to the system. The simple solution would be to raise the cap. Which may have to happen in any event since the Bush plan would do little if anything to solve the short fall.
Bush's two best weapons Fear and Smear.
OP-ED COLUMNIST
Kansas on My Mind
By PAUL KRUGMAN
Published: February 25, 2005
all it "What's the Matter With Kansas - The Cartoon Version."
The slime campaign has begun against AARP, which opposes Social Security privatization. There's no hard evidence that the people involved - some of them also responsible for the "Swift Boat" election smear - are taking orders from the White House. So you're free to believe that this is an independent venture. You're also free to believe in the tooth fairy.
Their first foray - an ad accusing the seniors' organization of being against the troops and for gay marriage - was notably inept. But they'll be back, and it's important to understand what they're up to.
The answer lies in "What's the Matter With Kansas?," Thomas Frank's meditation on how right-wingers, whose economic policies harm working Americans, nonetheless get so many of those working Americans to vote for them.
People like myself - members of what one scornful Bush aide called the "reality-based community" - tend to attribute the right's electoral victories to its success at spreading policy disinformation. And the campaign against Social Security certainly involves a lot of disinformation, both about how the current system works and about the consequences of privatization.
But if that were all there is to it, Social Security should be safe, because this particular disinformation campaign isn't going at all well. In fact, there's a sense of wonderment among defenders of Social Security about the other side's lack of preparation. The Cato Institute and the Heritage Foundation have spent decades campaigning for privatization. Yet they weren't ready to answer even the most obvious questions about how it would work - like how benefits could be maintained for older Americans without a dangerous increase in debt.
Privatizers are even having a hard time pretending that they want to strengthen Social Security, not dismantle it. At one of Senator Rick Santorum's recent town-hall meetings promoting privatization, college Republicans began chanting, "Hey hey, ho ho, Social Security's got to go."
But before the anti-privatization forces assume that winning the rational arguments is enough, they need to read Mr. Frank.
The message of Mr. Frank's book is that the right has been able to win elections, despite the fact that its economic policies hurt workers, by portraying itself as the defender of mainstream values against a malevolent cultural elite. The right "mobilizes voters with explosive social issues, summoning public outrage ... which it then marries to pro-business economic policies. Cultural anger is marshaled to achieve economic ends."
In Mr. Frank's view, this is a confidence trick: politicians like Mr. Santorum trumpet their defense of traditional values, but their true loyalty is to elitist economic policies. "Vote to stop abortion; receive a rollback in capital gains taxes. ... Vote to stand tall against terrorists; receive Social Security privatization." But it keeps working.
And this week we saw Mr. Frank's thesis acted out so crudely that it was as if someone had deliberately staged it. The right wants to dismantle Social Security, a successful program that is a pillar of stability for working Americans. AARP stands in the way. So without a moment's hesitation, the usual suspects declared that this organization of staid seniors is actually an anti-soldier, pro-gay-marriage leftist front.
It's tempting to dismiss this as an exceptional case in which right-wingers, unable to come up with a real cultural grievance to exploit, fabricated one out of thin air. But such fabrications are the rule, not the exception.
For example, for much of December viewers of Fox News were treated to a series of ominous warnings about "Christmas under siege" - the plot by secular humanists to take Christ out of America's favorite holiday. The evidence for such a plot consisted largely of occasions when someone in an official capacity said, "Happy holidays," instead of, "Merry Christmas."
So it doesn't matter that Social Security is a pro-family program that was created by and for America's greatest generation - and that it is especially crucial in poor but conservative states like Alabama and Arkansas, where it's the only thing keeping a majority of seniors above the poverty line. Right-wingers will still find ways to claim that anyone who opposes privatization supports terrorists and hates family values.
Their first attack may have missed the mark, but it's the shape of smears to come.
Seems like the SS Priviatization opponents have been using their own fear and smear campaign.
Krugman came out of hiding to write several pieces on SS yet he's only managed to write one or two that actually address the program. Everything else has been playing cheerleader.
I notice he didn't bother to use his space to blast the NY Times for their editorial the previous day (which you posted here) that spreads fear by neglecting to mention that those annuities they love to hate could just as well be inheritable.
Ridiculous.
USANext grew out of a junk mail, spam, and direct mail company in the 1990's.
http://www.thereisnocrisis.com/node/3076
Quote:A few weeks ago, we commissioned a research report on the funders of the Social Security privatization scheme. Our researcher went through the public tax records of every group involved in this right-wing scheme, and is writing a report on who's doing this and who's funding it. We're releasing the first installment today, on USA Next.
It appears that USA Next, the front group for Social Security privatization, was really just a junk mail and spam operation in disguise to benefit Richard Viguerie in the 1990s. It appears that it engaged mostly in scaring up donations from conservative activists before becoming a corporate shell for pharmaceutical industry and energy industry money and lobbying.
- "The United Seniors Association burst onto the political scene full grown from Richard Viguerie's head in 1992 with a piece of "fright mail" headlined "All the Social Security Trust Fund Money Is Gone!" and requesting a donation to support United Senior's efforts to "insure the rights and benefits of America's seniors are protected." It raised millions in its first year of operation, only to plow that money back into Viguerie's direct mail operations, renting mailing lists, paying "letter writers, printers, mailers and other subcontractors, always including Mr. Viguerie himself." Paying for direct mail was literally United Seniors' charitable purpose.
- "Viguerie founded the group in 1991 to assume the debt of an earlier, 1990, Viguerie creation, the for-profit Retired Americans Legislative Lobby, Inc."
- "In 1993, United Seniors would receive $5.3 million in donations, only to plow more than $4.2 million back into fund raising mail."
- "In 1995, United Seniors endorsed "privatizing" Medicare. United Seniors worked closely with the House Republican Leadership to support the Contract with America, defund the Legal Services Corporation, and provide a "conservative alternative" to the AARP. United Seniors went so far as to produce a cable call-in television show to promote Republican Medicare reform.13 And its direct mail campaign continued, with letters marked "Urgent -- Very Important Information about your Social Security, Medicare Benefits" going out across the country, requesting donations, 50 percent of which contractually went straight to Viguerie."
Comparing this to the NYT is just ignorant.
Cycloptichorn
Just one more Bush distortion of the truth. Or should i call it what it is just another administration lie. Bush the paragon of religion does not seem to understand that lying is a sin.
Don't take his name in vain
Fire and Brimstone,fire and brimstone. Stoke up them fires :wink:
By MAURA MOYNIHAN
In recent months, President Bush has continuously invoked my father, Sen. Daniel Patrick Moynihan, as a purported champion of the White House plan to privatize Social Security. As my father is sadly no longer present to explain his views, I read through his writings to set the record straight.There is a fundamental difference between Sen. Moynihan's view of Social Security and that of the White House. My father was committed to honoring the contract the government made with its citizens.
I think daily of his defense of the poor and the middle class, and his disdain for ideologues who would rip apart the safety net. In 1983, he wrote: "Cut back Social Security in desperation, and you abandon a solemn promise of the Democratic Party and of American society. This promise, once broken, will fracture society."
Today's debate parallels the battles of the 1980s. In 1981, President Ronald Reagan got tax cuts for special interests and created the largest federal deficits in history, up to that point. My father made his concerns clear: "The President's men really did believe that if you had a big tax cut, you would get a big increase in revenues ... now that they realized that their tax magic wasn't going to work, they tried another magic. They would convince everyone that the Social Security system was going bankrupt."
He went on, "These were the views of extreme conservatives who really had just never accepted the legitimacy of government-sponsored social insurance."
Moynihan believed that the deficits were deliberately created to attack benefit programs. In 1981, House leader Thomas (Tip) O'Neill of Boston, known in our house as "The Tipster," rejected Reagan's plan to drastically cut Social Security. Two years later, thanks to my father and his friend, Sen. Bob Dole, taxes and benefit adjustments were adopted that secured the system's solvency until 2060. President Reagan signed the bill in the Rose Garden, with Dole and Moynihan peering over his shoulder. I keep this photo on my wall.
In 1989, however, dismayed that the surpluses were being used to finance deficits, my father wrote: "There is an issue of integrity here. Thou Shalt Not Purloin Pension Funds ... These are Trust Funds. They are not to be spent for purposes other than for which they are deposited - and held in trust."
Which bring us to the present. President Bush invoked my father's name in a debate with John Kerry and in his State of the Union address. But President Bush failed to clarify that Moynihan proposed individual accounts as "add-ons" that would supplement Social Security, not as "carveouts" that would replace the funds.
In his 2001 Report of the President's Commission to Strengthen Social Security, Moynihan wrote: "These accounts could be financed by the individual worker voluntarily adding 1% of his pay on top of the present 6.2% employee share of the payroll tax. The government could match the employee's contribution with a matching 1% of salary, drawn from general revenues." Extolling the "magic of compound interest," he proposed investments to create "an estate! For doormen, as well as those living in the duplexes above."
Does Bush seek to protect the 35 million men, women and children who depend on Social Security or to loot the trust fund to feed the deficit or satisfy right-wingers who never believed in government-sponsored social insurance?
Dad was fond of reminding us - whether at the dinner table or on the Senate floor - that Social Security was "special to New Yorkers" because its creators, President Franklin D. Roosevelt, Sen. Robert Wagner and Secretary of Labor Frances Perkins, were "gifts to the nation from our Empire State."
As a single mother, I fear for the survival of the social programs given to us in a precious trust. Let us defend the legacy of Roosevelt, Perkins, Wagner and Moynihan, lest society become irreparably broken.
Moynihan is director of the Moynihan Station Citizens Group.
Originally published on February 27, 2005
Best line from Au's post:
Quote:He went on, "These were the views of extreme conservatives who really had just never accepted the legitimacy of government-sponsored social insurance."
Hear that!
Cycloptichorn
