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January 16, 2005
Social Insecurity.
Daily Howler: Peter Jennings covers for Bush. And Bumiller? Hopeless, as always
I know, I know, the title has been done to death. Still, though, it makes sense, and also is less inflammatory than president lies yet again about social security...
The heart of the Social Security debate is the expected health of the system a few decades from now. Basically, the when my parents retire, they are going to retire at the same time as a hell of a lot of other people. Instead of paying money into the system, they are going to be taking money out of it. Fortunately, for this exact reason, back in the early 1980s the Social Security trust fund was set up. That trust fund is set to run out in 2047, the year my father turns 98, and I turn 69...
So, at that point we no longer get social Security, right? Well, no. See, people will still pay into the system via payroll taxes (FICA) and thus the system will continue to be able to pay out benefits. And if the economy grows at an average of 2% per year those benefits will be larger in real terms than they are today. If the economy doesn't grow at least 2% per year, of course, the US will probably cease to exist as a sovereign nation...
So, why does the Bush Administration want to gut Social Security? As near as I can tell, he (and a lot of conservatives) think that enforced retirement savings are immoral. While this may be true (I don't think so), it is a very different argument than what we've been hearing...
Posted by Andrew at January 16, 2005 12:24 PM
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Comments
This is very impressive post...NOT.
The fact that many conservatives have argued that forced retirement savings are wrong is totally irrelevant, since the changes proposed by the administration would still be forced retirement savings...just in an altered form.
There's no question about the bad future health of the system--you Dems all agreed with that point until the moment a Republican actually seriously tries to change things. Very dishonest.
The Trust Fund is irrelevant--it's just IOU's, not money in the bank, and even if it were that doesn't change the fact that in a few years we will be taking in less than we are paying out.
Nor do those calculations ignore the likely growth in the economy. Do you actually imagine economists do that? And will slap their foreheads and say "How could we have missed that point? Thank you Andrew for pointing it out"
Nor does anyone propose "gutting" SS. Your father can expect to get pretty much what he has always expected. Which ain't much! Instead of regurgitating Democrat Kool-Aide, why don't you think about how much more your dad would have for retirement if his FICA tax had been invested in the market in a private account. It would be A LOT more. And if he died before using it all, his family could inherit.
Many countries already have private accounts, and they seem to work just fine. Also, the whole concept of defined-benefits plans is pretty much totally discredited. No one would start something like SS now.
There are some cogent arguments against the proposed changes (though I don't find them persuasive) but you haven't used a single one of them....
Posted by: John Weidner at January 17, 2005 08:38 AM