knee jerk

When the knee jerks, somebody gets kicked in the balls.

Lofty rhetoric cannot take the place of pragmatic solutions. I didn't find anything but hints at solutions in the SOTU, the high point being the mother who lost her son in Iraq embracing the Iraqi woman voter. Several commentators agreed but put in the reservation that it was probably, as usually, staged. Nevertheless, it made the final statements by the President anti-climactic.

Staged or not....it's just corny showmanship and braggadocio on Bushco.'s behalf.

yup. dya think they realize that they're turning into the very "hollywood types" they disdain so much ?

"ohhh, there's no bizness, like show bizness !!! ".

For this administration there is no business like snow business.

Is this the rancor you're talking about, dys?

For my part .... I find extremely amusing criticism that the Bush Plan only "hints at solutions" to the SS problems. The alternative "plan," offered by the libbies, is .... oh, right ... there is no plan. This isn't a real problem. Where is that picture I need. Who posted it?...... Either Dookie or Cyclops ... I'll be back. ......


Found it. It was Dookie after all. [ http://www.able2know.com/forums/viewtopic.php?p=1159080#1159080 ]

Here is the Democratic plan for dealing with the SS problem.....

Actually, while I don't know if any Democrat senators are proposing a plan, several 'liberal' economists and others have proposed putting more money into the system to save it. This will have to happen for Bush's plan to work anyway. The problem is that the government is running a deficit and there really isn't any money to put into the system outside of raising ss taxes, which nobody wants.

It's not only democrats that are raising concerns over Bush's social security plan.

http://story.news.yahoo.com/news?tmpl=story&e=3&u=/ap/20050204/ap_on_go_co/social_security

We don't want to hear what those dumb Republicans are saying who don't swallow Bush's fantasy plans for overhauling SS. It's something like an automechanic saying your Subaru needs an overhaul and then turning it into a Voltswagen bus.

it just seems to me that so many people have got this vision of the nation continuing to move forward on any and all fronts without it costing them anything personally. "i work hard for my money and i'm gonna keep it ! let them find the money somewhere else! "

something to consider is, with all of the talk about an "ownership society", that america is our country. we own it.

but, just like a company that pulls all of the profit dollars for distribution to shareholders and fails to reinvest in the company's financial well being and growth, it will soon be ripe for chaptor 11 and then a likely takeover.

that's one of the problems with running such a high deficit and then borrowing money from a hostile competitor company (china ?) to float your continued operations and expansion.

imagine what's going to happen if political turmoil induces china to pull in our loans. will the other creditors be far behind ? as in day to day business, our other creditors will be demanding payment so that they don't get holding an empty bag. it could happen.

the president has made a point of the "16 workers paying for every recipient in 1937. now it is only 3.2".

from what i've read, the social security ratio has been between 3.3 and 3.7 workers for each recipient since 1970.

and another thing to consider... how does the rampant outsourcing of jobs affect social security ? less workers = less payins. workers losing large percentages of their income when their job disappears and they work for less money ?

maybe a thing to do is this; if people don't want to pay into social security, okay. don't.

but they will receive nothing. not a penny. no matter how broke, how hungry or how sick. not from s.s., not from welfare and no food stamps either.

to me, that should kind of put the issue in a different light.

hi-ho

Ticomaya
Which monkey are you the one in the middle? Sure the social security system needs to be updated to today's reality. However, Bush's plan will not do the trick. All it will do is increase the deficit and add undue risk
What needs to be done is to go back to the drawing board and include both sides of the isle in the discussions and planning. Bush's idea of bipartisan planning is my way or the highway. It won't work this time even with his usual scare tactics.

Better all read the fine print of the way this legislation is written (which is far more complicated than even Hillary's national health plan). The government still has its hands on the money one has accumulated with this "sideways" investing. This forces one to either put money into a private account or receive less in benefits upon retirement. This is the Tony Soprano SS overhaul.

the whole thing is scary, l.w. howz things down your way ?

i don't see how deepening the deficit without need is a good thing, ever.

the bush administration has a tactic of first creating a fear. then they start the hysteria about "we have to act now! now! now! now!" people get freaked out and are like, "uh... okay dubya! you know best! save us !"

i don't buy it. after the election, i thought i'd keep an open mind about the guy's second term. try to be fair, ya know ?

but nooooo... the last ballot was still warm when he started up with the same ol' crap.

It's all show and something for him to do -- travel around addressing his choir. His singing, however, is off key and flat like a bad audition on "American Idol." He's had a bunch of conniving lawyers who control Washington, BTW, draw up this elephantine document which is so full of holes it resembles Bonnie and Clyde's automobile at the end of that film. His "Marriage Amendment" and this piece of garbage legislation is pandering to his constituents who are cannibals only they are all chewing on their own arm because it's so tasty.

The problem is the lemmings on the right fall for his BS hook, line and sinker. There seems to be no independent thought in that group.

it's interesting. i heard a couple of interviews with the former epa lady. christine todd whitman. is that the right name ?

anyway, she basically is saying that if you don't lock step in with the bush mindset, you can kiss your but goodbye.

similarly, she talked about the narrowness of the gop leaders p.o.v. that they just keep drifting farther to the right and the moderates and less hardline conservatives are kind of left to just stand there.

funny... no news to me. this is exactly why i bailed on the gop in the late '80s. if i want to hear all about family values every 5 minutes, i'll go to church. i don't need the government wasting time, and my money, legislating morality.

so it's interesting hearing the same complaints from a republican heavy hitter.

Why Bush is wrong

His Social Security reforms are neither 'social' nor 'secure'



Social Security is the cornerstone of life for nearly 48 million people - retirees, dependents, survivors of deceased workers, and the disabled - all of whom receive a check like clockwork every month. Millions more will come to rely on those checks in the years ahead.
Many don't think much about that fact, and few realize just how much of a nest egg they're going to need. An American reaching the retirement age of 65 today has an average life expectancy of 18 more years, which means that roughly half of those who reach 65 can expect to live longer than 18 years. Four out of 10 have no nonwork-related retirement savings. Six out of 10 haven't even tried to estimate what they'll need. They rely vaguely on Social Security, but how far will it carry them? How serious is the "crisis" they hear about? What are the implications of "reform?"

Social Security pensions were indexed to the rate of inflation in the 1960s and 1970s, dramatically diminishing poverty among the elderly. Now only 10% of those over 65 live in poverty - 2 points lower than the national poverty rate. Roughly two thirds of people age 65 and over depend on Social Security for at least half their income, and roughly 20% rely on it for their entire income.

Currently, the payroll tax brings in more dollars than it pays out in benefits. The surplus, roughly $180 billion a year, is invested in treasury securities and deposited into a trust fund, which holds more than $1.5 trillion of these notes. As baby boomers begin to retire, the system will go into deficit around 2018, requiring drawing down on the fund. By that time the fund will exceed $3 trillion, so it will be in the black until around 2042, using the Social Security Administration's conservative economic and demographic assumptions, or 2052, using the assumptions of the nonpartisan Congressional Budget Office. Even if the system exhausts its reserves, payroll taxes will roll in, enabling at least 73% of scheduled benefits to be paid out.

In other words, there is no current financial crisis. So, what's with all the hand-wringing? Well, if you make pessimistic predictions about economic growth, immigration and wage inflation, projected revenues may not be enough to pay benefits. Social Security actuaries, for instance, project that growth will average only 1.6% after 2010, about half the rate we have enjoyed in the past century. But if the economy grows at anywhere near the levels that Bush's own budget experts project, the surplus, in effect, would never run out.

Most important, to the extent that there is a deficit, it could be covered by a variety of modest combinations of tax hikes and benefit cuts - each of them quite manageable.

A careful study by AARP estimates that 43% of the Social Security deficit projection would be met by raising the cap on taxable wages from $90,000 to $140,000; 38% would be covered until 2083 by raising to 70 the retirement age for full benefits; a quarter-percentage-point increase in the payroll tax for employees and employers would cover 24%; requiring state and local government workers to join would cover 9%. Yet another approach implicit in the President's program is to decelerate increases in benefits by raising them in line with prices, not wages.

This readjustment would eliminate the 75-year projected deficit of Social Security, but it would have a major impact on low-wage earners who depend almost entirely on Social Security, and it would reduce benefits for middle-income workers by as much as 25% over 30 years. It would thus preclude many seniors from enjoying the benefits of rising standards of living.


A solution here is to protect workers at the lower end of the income spectrum by retaining benefits according to wage rises for them but lowering benefits to price indexing for the higher levels. Or some mix of the two.

President Bush has a different answer to all of the above. In pursuit of his "ownership society," he wants to move Social Security toward "greater individual opportunity, risk and reward" by allowing individuals to carve themselves private investment accounts out of Social Security payroll taxes, much like a 401(k) plan. This raises a whole host of problems.

It discriminates against poorer workers because the lower your income, the less you have to invest and the smaller your return will be. The Bush plan offers nothing close to the financial security of the existing program. Then there's this: Are individual investors sophisticated enough to match the higher returns now being forecast? At least 10 studies analyzed by the Securities and Exchange Commission indicate a disturbing level of financial illiteracy. Only 12% of the investors studied could distinguish between a load and a no-load mutual fund; only 14% understood the difference between a growth stock and an income stock; only 38% knew that when interest rates rise, bond prices fall; almost half somehow believed that diversification guarantees that their portfolio would not suffer if the market dropped, and 40% thought that the trust fund's operating costs would not be deducted from their investment return.

Experience with 401(k) plans shows that many people fail to invest and to diversify sufficiently to maximize returns. Many make mistakes, not because they are stupid but because they live busy, complicated lives, focusing on work and family, and lack the time to become financial experts. Those 50% or more who are not in the stock market presumably have even less knowledge and experience.

Furthermore, historical stock-market returns are not a guide for future performance. If someone retires after the market dives, he or she could lose a good chunk of retirement savings. The market, after all, fell by 45% in real terms between 1968 and 1978 -- never mind the bust between 2000 and 2002. If millions of retirees suffered dramatic losses, there would be enormous pressure to come to their rescue. We would very likely end up privatizing gains and socializing losses.

The macroeconomic consequences of privatization are equally significant. Privatization fails to address the long-term gap in the program's financial resources. It would make things worse because the government would have to borrow the money that otherwise would be paid into the system.

Of course, the idea of Bush's "ownership society" is to change the relationship of Americans to government so they look less to Washington than to themselves (and, just maybe, vote more Republican). No doubt some Americans could build savings and more wealth and have a nest egg for retirement. No doubt there is value in savings and self-reliance, planning ahead and increasing distance from the government. But there are other values in the very title of the program - Social Security. "Social" surely implies a contract to help manage poverty among the old and to know that our society provides a minimum income for all in the retirement years. And "security" means buffering the harshness and cruelty of the markets so the well-being of the elderly is not dependent on shrewd stock picks and hot mutual funds.

Privatization thus gets things upside down. Social Security was not meant to re-create the free market; it was intended to insure against the vagaries and cruelties of the market and to permit Americans to count on the promise that the next generation will take care of them in their old age.

Read the Fine Print


Published: February 6, 2005

The more we learn, the worse it gets.

Last Wednesday, as President Bush prepped for his State of the Union address, a White House official gave reporters a background briefing on some of the details of Mr. Bush's Social Security privatization plan. Almost point for point, whatever the president said that sounded good sounded bad when the details were filled in.

For instance, Mr. Bush said, "Personal accounts are a better deal," because "your money will grow, over time, at a greater rate than anything the current system can deliver." But the privatized system actually contains hidden costs that could leave retirees with less. Your Social Security benefit would be reduced, dollar for dollar, by the amount of money you deposit into your private account and an additional charge amounting to 3 percent plus the rate of inflation. All the money that is drained off would presumably go to pay for the enormous upfront government borrowing - $4.5 trillion over the next 20 years - that privatization would require.

That means people whose private accounts steadily earned three percentage points over inflation throughout their working lives would wind up with exactly what they would have gotten if Social Security remained untouched. Anyone who earned less than that would end up with less than is offered by the current system. When asked what would happen to the people who would not have enough income to avoid poverty, the administration official said, "I'm not sure if I'm understanding your question."

The benefit cut is only the beginning. There is still the problem of strengthening Social Security's finances. On its own, establishing private accounts does nothing to solve the long-term shortfall in the system. The president alluded to this fact when he said, "We must pass reforms that solve the financial problems of Social Security." He dutifully listed various benefit cuts that would do the trick, without taking the politically risky step of endorsing any of them.

Neither the president nor his aides have been willing to acknowledge the extent of benefit cuts that would be needed. And no wonder: All in all, they would leave the average worker with a government benefit worth only about 10 percent of his or her preretirement earnings. (Currently, Social Security replaces about 35 percent, on average.)

Various proposals to strengthen the current system's solvency via modest tax increases and benefit cuts - without resorting to costly private accounts - could guarantee a government benefit that replaces about 30 percent of preretirement income on average. But for all his talk about "an open, candid review of the options," the president refuses to consider any plan that excludes private accounts or includes tax increases, no matter how small. His stance makes severe benefit cuts unavoidable.

Even the feel-good tidbits in the president's speech really fail to stand up to close examination. Mr. Bush assured listeners that the government would prevent people from making bad decisions by restricting their investments to a conservative mix of stocks and bonds. But the more restrictions there are, the harder it would be for people to achieve the outsized returns that the administration has generally promoted to sell the public on private accounts.

And the much-touted promise that the private accounts could be passed on to one's heirs, as it turns out, is also less than it seems. That works entirely only if you die before you retire. Under a scheme that is going to take a while for the public to digest, the White House wants to require new retirees to use their private accounts to buy annuities large enough to keep them above the poverty line for the rest of their lives. The most they could leave to heirs, then, would be what is left over after the annuities are purchased.

Mr. Bush is expending tremendous energy to sell his plan - daily impairing his own credibility and shredding whatever confidence remains in the country's fiscal outlook. Members of Congress would do him - and their constituents - a favor by reining him in and moving on to more pressing matters.