In an attempt to do some research to provide a reasoned response to statements by BillKile and others on this board concerning the confusion around the Bush Social Security privatization plan, I find there is nothing I can say that illustrates the real problem more thoroughly than this statement, in his own words, made by pResident George W. Bush to an audience in Tampa, Florida on February 4, 2005 explaining his privatization plan:
"Because the -- all which is on the table begins to address the big cost drivers, for example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases, theres a series of parts of the formula that are being considered, and when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.
Does that make any sense to you? It's kind of muddled.
Look, there's a series of things that cause the -- like for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the Red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the Red."
Comments?
I suspect the point of your post is to (once again) show that W isn't very articulate at times. Just in case you're asking a genuine policy question, W is stating that one of the big SS debates is whether benefits are indexed to prices or wages. Proponents of private accounts also would like to see benefits indexed to prices.
But I suspect you're not all that interested in the real answer...just another boring post trying to co-opt healthy debate. If you are, I suggest doing some reading on the topic before taking a position that W is wrong.
Actually, I am... just as I was in an earlier thread where I specifically mention you as a potential source of information to explain the SSI issue.
While I acknowledge the irony and cynicism of my own words in this thread starter, I believe I've been one of the few attempting to promote and engage in real dialog on the issues.
The intent of my post had nothing to do with showing Bush as articulate or not. Everyone ALREADY knows that, Bush lovers and bashers alike.
The "hidden agenda" of my thread was to illustrate the depths to which our willingness to accept verbal nonsense has gotten.
Bush has some of the most brilliant speechwriters in the world working for him. Even the briefest of public appearances are stage managed and produced like the most lavish Broadway play.
The quote above was from an actual speech he gave in Tampa.
So why in the world can't they make it simple and clear as you were able to do in one sentence, to whit:
"W is stating that one of the big SS debates is whether benefits are indexed to prices or wages. Proponents of private accounts also would like to see benefits indexed to prices."
THAT is clear and easy to understand. So why do his speeches have to sound like so much obfuscated nonsense?
Ok, with that all said and done, let's get to some meat.
If benefits are indexed to prices, how can this be seen as anything but more of a burden on the lower income wage earner?
Someone making $50,000 per year feels a bigger bite out of their total revenue when prices of goods go up than someone making $150,000 per year. That's math simple enough for even a drug-addled doc like me to comprehend.
Why is this better than raising the limits of SSI deductions, other than the ones affected are the higher wage earners?
Eliminate the glass ceiling altogether, and you virtually eliminate the problem without increasing our already overburdened national debt. Surely some of the CEO's raking in MILLIONS upon MILLIONS of dollars in corporate perks aren't going to miss a few thousand extra dollars?
The great sage and author Hillel once said "If I am not for myself, Who will be for me? But if I am only for myself, What am I?"
I'll stop for now.
-- Modified on 4/10/2005 4:30:46 PM
Well, thanks for finally being honest.
First, lets recognize that the Democrats obscure the truth as much as Republicans. I think we'd all agree that politics today is about over-simplifying and obscuring the complex choices that face our country every day.
You characterize the debate correctly. I actually don't think we should reduce benefits or increase taxes on "rich CEOs" (I personally am a "rich senior executive" who works 60-70 hour weeks and has made huge life sacrifices for my wealth). Its just plain lazy policy to say that problems are solved by "just a few thousand extra dollars."
To me, the simple answer is to raise the retirement age and/or provide sliding scale benefits - more benefits to those who need it, less to those who don't. But the political process will never produce a rational solution like this until the system in a crisis.
Come back to wage vs. price indexing and my guess, it's just that, is that since contributions are a function of wages, the powers that be thought that since contribtuions move in accordance with wage increases over time (which move up faster than prices), it was necessary as a matter of fairness and comity that the ultimate benefits paid out also move in accordance with these fast paced wages. However, benefits are usuaslly collected when one is no longer working and any tie-in to wages typically no longer exists. Retirement needs are therefore a function only of cost of living increases (the CPI, for example) and it would seem that a tie-in to post-retirement price increases is both logical and corelates closely to increased economic needs over time. The projectiuons I have looked at suggest that this one change is the only change which would have to be made to render the entire system solvent.
An obvious example at this point would be the cost of petroleum based products. Not oil and gasoline, either.
I wonder how many folks here realize just how much of a primary factor petroleum and petroleum based products have become in our society?
Don't think automobiles and power generating stations, think plastics, polymers, medical ointments, the celluloid used in film-making, magnetic tape (and some designs of computer hard drive) the list goes on and on.
And due to the rising cost of crude on the market, be it light sweet, heavy sour, or even the muddy crap they extract by dredging up under the Gulf, all these products are showing price increases beyond the pale.
This in and of itself should be enough to concern everyone, and could conceivably offeset any Cost of Living considerations.
Of greater concern to me at the moment, is the data provided by BK in his message below. So lemme freshen up my Chivas, and I'll meet you there.
Forget anecdotal, short term data. Historically, wages rise faster than prices - its called PROGRESS. If prices rose faster than wages, we'd see a decline in standard of living. While there are short term blips, wages always move faster than prices in the long term.
Part of the private accounts theory is to make SS more like 401-k. That is, make benefits rise according to inflation and investment performance rather than the rate of wage increase (like the old pension plans). One is seen as more like government funded insurance, the other is more of a traditional retirement guarantee.
Ran across this article and was reminded of your post. I'm not sure it contradicts your point but it appears to suggest globalization may influence historic patterns.
-- Modified on 4/11/2005 10:03:47 PM
My favorite quote...
"Most economists dismiss as overblown the widespread fear that the number of jobs will shrink in the United States because of foreign competition from China, India and other developing nations. But at the same time many of these economists argue that the increasing exposure of the American economy to globalization, along with other forces - including soaring health insurance costs that leave less money for raises - is putting pressure on wages that could leave millions of workers worse off."
I think this nails the issue. The problem as I see it is that the alternatives: reduce outsourcing and raise import taxes - bring an even worse result. I might buy into selectively protecting/promoting specific sectors in the short term, but in the long term we have to globalize.
""but in the long term we have to globalize.""
It is hard to not forsee a "comeupance"[sic} down the road for the US wage earner. This recent report may portend...maybe not.
How do you justify higher wages based simply on zip code of earner....?
what I believe.
"""""
Each year nearly every congress-person in both parties
claims they want to save social security.
But every year they allow every penny of paid-in surpluses
to the trust fund to be spent on other stuff.
The total amount siphoned-off from that trust fund to date is $1.5 Trillion,
with an additional 1.6 Trillion siphoned from other trust funds,
With zero plan to pay anything back to support future retirees.
Trust fund surplus siphoning continues to help camouflage government spending,
So budget surpluses can be claimed when acutally there are deficits,
Or smaller deficits can be claimed than is really the case.
This camaflauge helps politicians get elected,
Drives up debt like crazy
And destroys social security and other trust funds.
And - destroys citizen trust in government.
http://mwhodges.home.att.net/deficit-trusts.htm
THE 1.7 TRILLION REFERED TO BELOW IS THE TOWN DRUNK WRITING IOU'S TO BILL THE BARTENDER.
If I understand the article correctly, almost half (HALF???) of our existing National Debt is due to Congress raiding the money pantry. WTF is up with that?
Ok, forget all the arguments... seems to me this is where the problem REALLY lies. And speaking of lies, who the hell started this debacle anyway, and how has it been allowed to continue to this utterly out of control point?
Social Security isn't broken, it just needs a valve job. It's the Congress thats broken.
Where's Bill the Bartender, I need a drink. Better yet, leave the bottle. I'll pick this up tomorrow, cuz I'm gettin too pissed, as well as pissed off to continue rationally.
sux don't it? Since he really spares no one party, i find him most credible. i'ved never really posted this info to anyone who refuted it.
the best anyone here could do was Harry Lime's "the author has piss for brains"
so much for intelligent discussion....
so, it's molotov's at 50 ft. instead, just the way those in power want it.
(((Here's a big secret no one seems to get>>>>>(WHOEVER"S FUCKING TURN IT IS DOESN"T MATTER))))))they just fuck you from different angles!!!!
BK
-- Modified on 4/11/2005 1:39:59 PM
-- Modified on 4/11/2005 1:40:46 PM
Seems there's a cult up in Oregon that has brainwashed a pair of young lads named Johnny Walker and Jack Daniels. I've been asked to mount a rescue mission to rescue/liberate these two lads from their bottled bondage; and considering what I've been reading after doing further research on the SSI issue, I'm tempted to vote the Fear and Loathing ticket.
Parting shot - when you mix up red and blue, you get purple.
So pass me the purple sack with the Chivas. Cheers
The Doc
-- Modified on 4/11/2005 8:49:48 PM
it was the purple sack, the plastic baggy, and the bindle that was my undoing......hehe
So, why is social security projected to go partially bust only by 2040?
This just doesn't fit. It also doesn't fit how "private accounts" are supposed to save this. One or more of these "facts" are just not true.
BTW, the private sector also has a very poor record for keeping pension funds. The majority of them have been underfunded or just plainly looted.
And every decade, in the private markets, there has been one super scandal or another in which billions of dollars have disappeared. By comparison, this purported Social Security hemorrhage is minor by comparison.
the bullshit is flying fast and furious.
this ""purported"" Social Security hemorrhage is minor by comparison.
If Kerry had been elected, you would'nt be using "purported".
THAT"S what I'm talking about.
It like with jobs and NAFTA.
Anybody remember Ross Perot's "HUGE SUCKING SOUND"????
Are all you fuckers deaf????
Bush 41 wrote it, Clinton 42 signed it and juiced it up, Bush 43 perpetuates it......but it's THE OTHER GUY that's to blame
it's all bullshit...
-- Modified on 4/13/2005 1:09:50 PM
I believe Social Security was fixed once, with a bipartisan effort. Germany's social security system has survived since Bismark, through two world wars, a Great Depression or two, and the actual partitian of Germany. And we can't fix ours?
I notice these stories become more and more common now that Bush's initial attack on social security failed. The propoganda has been taken up a few notches, with various random attacks on the program turned up, hoping that they could make it so odious that the public will throw it away.
Now, I'm not saying that you're one of the sources, Billkile, but I am saying that there's a reason you're hearing more of this right now and get guided to more sites making these hacks agains it. Believe me, if the hemorrhage were this bad, the Bush administration would use a better argument than the fact that the system is going to go partial bust in 35-40 years.
I'm also not saying that there isn't any borrowing against it. Let's just say that there's a law of economic entropy. Any untended pile of money set aside for a purpose will tend to shrink over time. The longer the time, the more the shrinkage.
I don't like social security. It has it's flaws, and serious ones, and it has had some unintended consequences that are negative. Even so, it just shouldn't be thrown away because of deception, or traded away for nothing. Too many people have paid into it for too much time. The only good way to end it is gradually. And citizens should know that they are ending it, not deceived into sabotage by a clique of politicians who always hated it and hated the man who set it up.
i think there are deceptions. 1. that there was a bipartisain effort to fix it. what we has during the Reagan years was an agreement that rather than fight over guns a butter, everyone coul;d get what they wanted by borrowing from SS. the 1.7t mentioned is you promising to repay you, come on zin, your smarter than that. the 2. deception is that someone is tryiong to "destroy it". dude, that's demagaugery.
there is no friggin money set aside.
they lied, and they are lying now.
my 2 big hunches are,
Pubs are lying, hoping for the cash infusion into US equities for a redo of the cliton pump and dump years
Dems are lying because the unions they represent don't want everyone to see just how big of a pillow they've created for themselves outta public feathers.
Remember, the motivation to "serve the public" goes away above school board and "serve" becomes a euphamism for fuck.
i'm not jaded, i'm not....
BK
Your skepticism here is truly baffling, Billkile. There are people who are politically dead set against social security, and who have no problem retiring, therefore, no need of its stipend in retirement, who think the tax is bothersome.
The Bush family, for the record, despised Franklin Roosevelt and Harry Truman. That goes back to Prescott Bush and George Herbert Walker. Both of these men were investment brokers and financiers. (Like W's brother Jonathan.) The family has thick, deep connections to investment brokers. I could think of plenty of prestige W would earn in his circle if he'd divert funds to the brokers. They'd owe him big. I could think of the added personal satisfaction he'd have if he'd sink the program doing it. His friends are, at best, indifferent about it, but many would congratulate him. I think he'd probably enjoy the latter much more than toppling the statue of Saddam.
Just because you can see some conspiracies exist, and look for lies, doesn't mean that you're paranoid. Even if I don't think I'm paranoid, it would be stupid not to suspect that Bush might not be on the up and up when it comes to fixing social security. It would go against both the interest and political philosophy that his family and his friends live by if he did. He's not going to betray those people; he owes them too much, and that would be more like how he judges his integrity.
-- Modified on 4/22/2005 8:51:46 AM
ps, i don't mean "you fuckers" like YOU fuckers, I mean it like everybody..dod you remember the old spy movies, clorophorm[sic}? you put it ona rag and put it over the guys face and it knocks him out???
washington has the clorophorm rag over everybodies faces....
Yes, you are right about pension funds. But, Bush's argument, which I support, is that privatization is more akin to 401-k, which also has its flaws. The issues as I seem 'em.
Pensions: Defined benefit. Entitlement. Huge funding problems for companies, particularly if there is substantial wage inflation and pension portfolio underperforms.
401-k: Defined contribution. Investment. Huge problems for individuals if they fail to allocate income and/or mis-manage their portfolio.
I think the analogy holds.
Yes, there are problems with 401k plans. But the burden is on who it should be on, the individual. If you want to watch a microcosm of what happens with entitlement programs, look at GM, Ford, and Chrysler. They can not compete because of the cost of benefits, a good portion of which go to retirees. The average cost of benefits per car for an American(big 3) car is about $1800. The average cost of benefits for the Japanese transplant companies is $170 per car. The difference is in quality of product. You wonder why the Big 3 keep losing market share?
The fiscal problem is not hard to understand. When Social Security was founded, the average age of death was 65. Now the average lifespan has increased to 76 years. As a result the number of people who will be drawing Social security is skyrocketing. That, in combination with the demographics of the baby boomers drawing and a generation of baby busters supporting the system will cause the ratio of people paying in to people drawing to go from 16:1 when the system was established to 3:1 by 2035 by most estimates. To keep benefit levels up, either move the age to 76 to begin drawing Social security or rape the 3 people that will be supporting each retiree to keep the checks coming. Considering the fact that you are paying 15.3% (don't fall for the 7.6% that comes out of your check, your employer's contribution is a factor in what you are making so you are just shielded from the pain) it is appropriate to ask yourself is this system a good system or a scam. Frankly the return on money "invested" in social security only gives about a 4% return on those who live long enough to collect it. I would much rather pay a small percentage to cover those who, through disability, or medical problems are not able to provide for themselves and then let me invest the difference without the goverment's help or taxation. Even FDR, the father of the current system, never envisioned this as anything more than a transitional program to private investment. For anyone who calls the stock market a risky scheme, consider the risk for those who do not live long enough to collect. The stock market has a history of about a 10% return even including the great depression and the last recession. Compare that with 4% at best and no ability to leave it to my children and it is really a no brainer.
Chipcutter, what is wrong with you? are you out of your mind? Trying to confuse these people with facts. Your argument makes entirely too much sense to be taken seriously around here. Tax productive people into oblivion, that's the answer they want to hear. BTW I agree with everything that you just said, especially the part about SS bieng 15.3% not 7.6, those of us who pay self-employment tax are painfully aware of the difference.