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Thu 3 Feb, 2005 03:51 pm
State of the Union Double Speak
February 3, 2005
Benjamin Powell
President Bush's rhetoric in the State of the Union address is reminiscent of promises made in his 2000 campaign. It included limiting government spending, freeing entrepreneurs from burdensome regulations and giving Americans more choice in their own economic future, particularly their retirement. However, when his proposals are examined, what he really advocates is just a different system of government controls. This should come as no surprise given his actions during his first four years in office.
Bush stated that to make our economy more flexible, competitive, and innovative it would require the government to "restrain its spending appetite." Yet during Bush's first four years in office the federal government went on its biggest eating binge since LBJ's reckless spending in the late 1960s.
Although many assume that spending grew because of post 9/11 military expenditures, domestic discretionary spending has increased at a similar rate. In fact many of the agencies on the Republicans' 1995 list of unnecessary government agencies, such as the departments of commerce and education, saw some of the largest spending increases during Bush's first term.
Going into his second term Bush proposes a budget that limits spending increases to "below the rate of inflation." How can we expect Bush to keep this promise? The legislature is sure to add its own pork to his budget and Bush didn't veto a single bill during his first term in office. Never mind that even if he could keep this promise it would leave intact his already bloated spending from the last four years.
Social Security is clearly the biggest item on the President's domestic agenda. Yet all we heard was a bundle of contradictions and presidential double speak. Only in politics can "voluntary" mean "not voluntary" and can "your money" not be yours.
The centerpiece of Bush's Social Security reform is a "voluntary personal retirement account." Yet what Bush means by "voluntary" is that young workers can stay in the current system, or go to his system where eventually up to four percentage points of workers' payroll taxes will go to a personal investment account. My dictionary defines voluntary as action "by one's own free will." If these accounts were really "voluntary" workers would not be forced by a tax to contribute at all. They could either save in a manner they choose, or not at all.
Bush promises that under his plan "the money in the account is yours and the government can never take it away." We should not kid ourselves. Just like other private money, the government can always reduce the value of these accounts through future changes in the tax laws and inflation. The Bush individual retirement accounts also come with restrictions that will limit the type of investments you can make and the amount of money you can withdraw. Is the money in this type of account really "yours" if you can not decide what should be done with it? The Social Security reform Bush outlined in his State of the Union address is not voluntary and it doesn't create purely private accounts. It just creates a new version of government mandated and regulated retirement savings.
After the last four years, those advocating a reduction in the size and scope of government in our economy should not be seduced by President Bush's speech. Although the rhetoric of "voluntary" retirement accounts and restraining government's appetite for spending is tempting, Bush's proposals will not reduce the role of government in our economy. His proposals simply change the ways government intervenes. A prosperous economy and secure retirement can be achieved in a voluntary society, but Bush's State of the Union address should not be interpreted as a significant move in that direction.
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Benjamin Powell, Ph.D., is the Director of the Center on Entrepreneurial Innovation at the Independent Institute, an Oakland-based policy think tank and a professor of economics at San Jose State University.
Next thing you know, your going to call him a Nazi.
I think it's worse than that, Tico. I think Mr. Powell called him a liberal.
and Ted Kennedy caled him "compatriot"
Quote:The centerpiece of Bush's Social Security reform is a "voluntary personal retirement account." Yet what Bush means by "voluntary" is that young workers can stay in the current system, or go to his system where eventually up to four percentage points of workers' payroll taxes will go to a personal investment account. My dictionary defines voluntary as action "by one's own free will." If these accounts were really "voluntary" workers would not be forced by a tax to contribute at all. They could either save in a manner they choose, or not at all.
What clearly makes it "voluntary" is the free will to choose whether to participate in the private account or not. That's clearly a voluntary program that Bush is offering. The Social Security system itself is not voluntary, not now, and not under the Bush plan. That's not "double speak." This guy needs to stay in his ivory tower.
All in all, this is a pretty weak argument against the Bush plan as it regards SS, IMO.
FreeDuck wrote:I think it's worse than that, Tico. I think Mr. Powell called him a liberal.
dyslexia wrote:and Ted Kennedy caled him "compatriot"
At long last, have they no shame?
Quote from above post, "Bush promises that under his plan "the money in the account is yours and the government can never take it away." We should not kid ourselves. Just like other private money, the government can always reduce the value of these accounts through future changes in the tax laws and inflation. The Bush individual retirement accounts also come with restrictions that will limit the type of investments you can make and the amount of money you can withdraw."
If the money belongs to the investor, I'm missing something by the statement, "the money in the account is yours and the government can never take it away." If this isn't double-speak, I'm not sure what straight talk is!
Uh, your definition of double speak is very different than mine c.i. I can adjust my private accounts to attempt to compensate for inflation, something I cannot do with SS.
I'd much rather just give my SS contribution to my parents. Wealth redistribution is a load of crap.
I'm always devistated when Bush single speaks
Quote:The centerpiece of Bush's Social Security reform is a "voluntary personal retirement account." Yet what Bush means by "voluntary" is that young workers can stay in the current system, or go to his system where eventually up to four percentage points of workers' payroll taxes will go to a personal investment account. My dictionary defines voluntary as action "by one's own free will." If these accounts were really "voluntary" workers would not be forced by a tax to contribute at all. They could either save in a manner they choose, or not at all.
Whoever wrote that should be ashamed. That is a horrible excuse for an argument. It's voluntary in that you can choose teh current system or the new one. You know one choice or another.
vol·un·tar·y Audio pronunciation of "voluntary" ( P ) Pronunciation Key (vln-tr)
adj.
Capable of making choices; having the faculty of will.
See the choice word. Capable of making choices, which in this case are new and old system.
and to think someone could write an article on this.
Quote, "I can adjust my private accounts to attempt to compensate for inflation, something I cannot do with SS." cjh, You're missing something very important from the article. Your "private account" will have many restrictions and regulations. If you call that "voluntary," be my guest.
Why isn't SS voluntary to begin with?
Since the article doesn't explain the restrictions, I cannot comment on that.
Quote from first post, "The Bush individual retirement accounts also come with restrictions that will limit the type of investments you can make and the amount of money you can withdraw."
cjhsa wrote:I'd much rather just give my SS contribution to my parents. Wealth redistribution is a load of crap.
I totally agree. My mother needs it now a lot more than I will need it later.
Has anyone seen what kind of return we're looking at over time (average) vs the amount we're (people in our twenties to thirties)gonna have to pay in taxes to pay off the debt that the transfer to this new system will induce?
I really don't know where I stand on this issue, seems to me we're just trading half a dozen eggs in for a chance at ten, but I have to admit I'm somewhat ignorant on this. Mostly because of a lack of details.
But this is an important peice of information, if my share of the estimated $2 trillion(?) + interest, in transfer costs turns out to be more than what I have the potential to gain from this new plan then screw it imo.
Elmer Gantry is at it again.
cicerone imposter wrote:Quote from first post, "The Bush individual retirement accounts also come with restrictions that will limit the type of investments you can make and the amount of money you can withdraw."
The Democrats would squawk even louder if it didn't have these limitations. Those are in by design, and in no way alter the fact that participation in the "private account" is entirely voluntary. If you don't want one, don't have one. Your choice. In other words, participation
in the new program is voluntary. Participation in SS is not.
Is this concept of "voluntariness" really that difficult C.I.?
No, Tico. President Bush is selling this "voluntary" retirement plan on the young workers with threats of insolvency. Sorta like the threat from Saddam that never existed. All our government needs to do is to delay the retirement age to meet the program's needs; we don't need the bait and switch this president is pushing.
Your remark about how the "voluntary" plan is being "sold" has no merit on whether it is truly voluntary.
The impending failure of the present SS system is clear. It was a hot-button issue for Democrats when Clinton was in office, one which they embraced, but of course Clinton did not try and fix the problems. Bush, being the kind of a fellow who sees a problem and actually tries to fix it, is taking on the task of fixing the problem which should be fixed sooner rather than later. The problem should be solved now before it becomes a crisis, and shouldn't merely be allowed to be passed on to a later president.
It certainly appears FDR envisioned the expansion of SS to include private accounts ....
Quote:Moynihan and Parsons Decry Partisanship
June 25, 2002
In an effort to keep the Social Security reform debate non-partisan and factual, Daniel Patrick Moynihan and Richard Parsons, co-chairs of the President's Commission to Strengthen Social Security, urged all political parties to "pursue a standard of bipartisan statesmanship" and "resist the temptation to cast the Social Security debate in partisan terms." The letter follows:
June 13, 2002
In our report to President Bush on December 21,2001, we joined the rest of the bipartisan Commission in calling for a year of national discussion of Social Security before legislative action is taken to strengthen the program. We believe that it is appropriate at this time to once again call on all participants in our national discussion to adhere to a tone that is non-partisan and factual.
Last year, we provided three models for reform for the President's consideration. Though each of these models has different characteristics, they all would include personal accounts, and each has been certified in the non-partisan analysis of the Social Security actuaries as providing higher expected total benefits than are paid today or which could be paid in the long run under existing law. Each of them would also maintain system solvency at lower cost than the existing Social Security system. The full report of the Commission, available to the public at
www.csss.gov details these findings.
The Social Security system is a bipartisan responsibility. This responsibility cannot be met by approaching the issue in political or partisan terms. We are deeply concerned whenever those with responsibility for the program may be induced to foreclose constructive policy options based on erroneous or incomplete information generated in a political context.
We have a historic opportunity to adapt the system to the needs of the 21 It century by modernizing the program to reflect Franklin Roosevelt's original vision. In President Roosevelt's 1935 Message to Congress on Social Security, he argued for ultimately extending the program to include "voluntary contributory annuities, by which individual initiative can increase the amounts received in old age." It is a measure of the bipartisan success of Social Security that a Republican President, George W. Bush, is now striving to make FDR's vision a reality through the establishment of funded personal accounts within the Social Security system.
We call on all parties to resist the temptation to cast the Social Security debate in partisan terms, and to instead pursue a standard of bipartisan statesmanship in the debate during the months ahead.
Sincerely,
Daniel Patrick Moynihan and Richard D. Parsons
What pisses me off about the Bush argument is this idea that it's young people he's worried about, because there won't be anything left for them once the baby boomers get it all.
As someone in the BB group, I remember hearing the same concerns when I was young. There wasn't going to be anything left in SS for us either. But there is. And there will be for the 20 year olds, too, if a few intelligent changes are made.
Not what Bush is proposing. And lying to scare people is his strategy.
As for making SS voluntary (as cjhsa proposes), let me guess: You'd like to make all taxes voluntary, yes? Because you've got yours and everyone else can go to hell...
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