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March 02, 2005

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gt

Hopefully it's dead. But I am still suspicious of Liebermann who does not seem to understand he is in the opposition party. It's incredible that this man was VP candidate for the dems only 4 years ago.

TM

Hopefully it's [alive]. [And] I am still [optimistic about] Liebermann who does not seem [mired in the notion that] he is in the opposition party. It's incredible that this man was VP candidate for the dems only 4 years ago.

From the Anti-GT.

KIDDING!

kr

Yes, God forbid a politican thinks for himself. We don't want that.

mark

Actually the failure of Social security bodes well for the 2006 elections. The most (over)used quote of 2004 elections? "I voted for the 87 billion, before I voted against it..."
By not forcing a Republican vote, all Republicans can express the need to take care of Social Security in the 2006 campaign, without having to take a position one way or the other.
The commercials will run as follows:

Clinton at the 1999 SOTU-"save social security."
Every dem senator who is up for reelection, who had the misfortune of endorsing Clinton's 'Save Social Security' on video(Harry Reid?) will now be contrasted to their refusal to discuss it. Cue Reid saying he has enough votes to filibuster a plan that hadn't even been submitted. Mention a few partisan special interest groups and VOILA:

The were in favor of Social Security reform, before they were against it. Don't let Senator X play politcs with social Security.

Failure was always an option and with the momentum of a 2-4 senate gain in 2006, they can seek the reform in 2007. The two issues that will be discussed for the 2006 election will be Foreign Policy and Social Security. Since no plan was actually submitted, the dems don't have an issue to attack. By getting out early, they limited their chance to make a gain by allowing a vote to occur.

I don't know where the Republicans stand on it, but I now know that the Dems are stating there is no crisis, and they will refuse to even discuss it(filibuster).

The dems are playing poker, but they showed their hole cards already, and have a junk hand. Would Rove rather have Social Security reform now, or a gain in the Senate in 2006?

Eric

Hasn't the coroner been brought in over the past four year in regards to any Bush initiatives only to be reminded that the talks of his demise had been greatly exxagerated?

TexasToast

Smartest thing GWB did is not to make any detailed proposal. Can't pin nuthin' on him.

gt

What is Bush's game?

I don't know that but I think this shows how little interest Americans have in many conservative ideas. The GOP has been very good at getting elected and very bad at implementing truly conservative policies.

No matter how much Grover Norquist may wish otherwise Americnas simply like big government. They have no interest in any major reductions to government's size and role. In fact as the Baby Boomers retire the size of govt (measured as expenditures as % of GDP will only rise).

Miracle Max

Not dead, but dead-ish. Still walkin around, tryin to bite you. As far as the shape of the Bush situation on SS goes, I've seen worse. I remember hydrogen cars. But was that ever alive?

The party of ideas, LOL. Their "idea" is to cut your benefits. Please keep it up. I haven't had this much fun since the ketchup-vegetable thing.

simon

"I haven't had this much fun since the ketchup-vegetable thing."-miracle max

ok...please, do not clarify

Thomas Young

If we could finance SS, allow for personal retirement accounts, put thousands of dollars into the pockets of the citizenry, fully fund medicare, and turn America into a worldwide investment haven allowing the engines if industry and finance to expand exponentially, and not cost anyone one red cent more...who would be against it??
Those who are against The Fair Tax!!!

JorgXMcKie

Plus, Alan Greenspan today informed Congress that the "crisis" begins in 2008, when the first Baby Boomers (I am one) are able to begin retiring. He goes on to point out that we simply cannot at this time afford the promises that have been made to Boomers. He says it needs fixed NOW.

I suggest that we start by insisting that all TSP funds for federal employees and Congresscritters be confiscated and added to the "Trust Fund" so I can get my retirement. We then forcibly add the frickin' 25% of the working population who are not currently paying in to the system (most of whom, oddly enough, get government paychecks).

I'm sure gt and Miracle Max will back me up that this would be the "fairest" way share the burden and the *guaranteed* benefits.

Of course, it may be that some would want to keep their IRAs and their 401ks and their TSPs, but they're just dogs in mangers, right, gt and Max? After all, those acounts are all incredibly RISKY compared to the wonderfulness that is SS. After all, nothing else that existed in 1935 has needed to be changed.

brent

http://www.straightdope.com/columns/040716.html

"Did the Reagan-era USDA really classify ketchup as a vegetable?"

Just Passing Through

Don't assume that SS reform as is dead because one of if not the most controversial element MAY be off the table. The political maneuvering and positioning and CYA is in full swing and things could settle out in a lot of ways.

SS is the elephant in the living room. It surprises me that the DNC is not embracing this issue as it's own. The problems with SS won't go away and the party that can come up with a viable solution acceptable in the cloak rooms on the Hill will get a lot of mileage out of it and the DNC is better positioned to sell one.

gt

SS has no problems for another 4 or 5 decades. Maybe even longer.

Not a issue today.

creepy irish dude

Tom Delay is to blame, and boy do you Repubs deserve it for letting that sniveling little rat run your party.

Remember early on there was talk of the Republican "factions." Delay had his own faction-the do nothings.
Delay didn't want to touch SS because it could compromise the Repub majority (i.e.his power).

So now-surprise, surprise, looks like nothing will get done. Lucky for Tom-just what he wanted. Curious? And look how brave he talks now that it's dead. He's giving the eulogy with blood on his hands!

Of course, Delay also stabbed Bush in the back-but all you galoots just want to blame the Dems. TM is even giving Josh Marshall credit and doesn't mention Delay-it's delusional.

Yes, we out-elected Dems somehow prevented the majority of both houses and the president from even presenting a written plan. How I wish. Let's hope our power is so great when drilling in Alaska comes up next week. Of course, that it's even coming up tells you all you need to know.

And those poor Repubs on the Ethics committtee who were on to Delay-all gone now. And no Repubs stood up for them. Moral giants you all are!

You really do get the government you deserve.

Just Passing Through

GT,

"SS has no problems for another 4 or 5 decades. Maybe even longer."

I don't agree with this estimate, especially with the upsurge coming with the baby boom retirements as you've already noted in another comment.

Even if it were true, the 4 or 5 decades supports the republican line, not democrat. It is the people entering or newly in the work force expecting those 4 or 5 decades before retirement who would have a measure of control over their own retirement planning and hopefully avert the future problem.

For me, retirement is not so far off that I can't myoptically live with 2 or 3 decades leaving things as they are, so it's tough for me to get to excited about the whole issue. From a purely pragmatic viewpoint (and as a devil's advocate considering my usual politics), I still think the dems should recognize that it will need fixing no matter the when and take ownership. Republicans historically aren't good at domestic social engineering (and make no mistake, SS reform is as much as national health care would be). Though there have been some notable mistakes in implementation, the dems seem better at it.

Ophir's Razor

I cannot believe that no one has noticed yet that the Social Security system represents a straightforward version of a pyramid scheme, which, of course, means that it is more illegal than Bernie Ebbers' Bank account.

We have proved this at our blog using the legal definition, and anatomical structure, of a pyramid scheme, and then by comparing Uncle Scam's security program to it, in order to show that the stolen shoe fits neatly on the fraudulent foot.

The only real difference is that most pyramid schemes are voluntary, so they deceive people into joining [fraud is money gained by deception]. But Uncle Scam doesn't need to deceive, since they FORCE you into this scheme. SO where the one employs fraud, the other employs EXTORTION. And, finally, in a standard pyramid scheme, every vicitim is encouraged to be a perpetrator.

This is again not true of SS, but not because of some virtue in it -- quite the contrary. It needs no evangelists, since the only new enrollees are those who start their working careers -- then they too are automatically enrolled. So evangelism is useless here since that would presuppose you have a choice to join or not. Other than these two points -- distinctions without a real difference -- Social security is a pyramid scheme if ever there was one.

http://ophirgold.blogspot.com

Tom G.

I think Bush's skill at passing legislation is over-rated. I think the only real test he faced was on Iraq. Otherwise, what has he passed
1) tax cuts
2) more money for farmers
3) drugs for seniors

It's a lot easier giving out the goodies.

gt

Please Ophir, not another "But SS pyramid scheme' post. That nonsense has been repeated enough.

Tom G. you are exactly right. Bush is grossly overrated. All he has done is pass the easy parts where people get more money. What skill does that require?

TM

Well, Irish, I have noted the "Constructive" DeLay a couple of times, thank you.

The fact that Reps never quite united behind anything is just one of the many challenges lurking here.

Harry Arthur

GT,

Not sure what you mean by "SS has no problems for another 4 or 5 decades. Maybe even longer." Guess I'm having trouble understanding the meaning of "no problems."

Of course I am still struggling with how "I owe me" bonds can be both an asset and a liability simultaneously to essentially the same holder. Not an accounting concept with which I'm familiar.

I was impressed that no one mentioned the $1-2 trillion transition "costs" for partial privatization.

For the rest of you with the ad hominem comments about Bush - I wish you'd decide whether he's an idiot that can't get anything difficult done or an evil genius who controls everything. This back and forth thing has me perpetually confused. It isn't that multiple personality thing, is it?

Harry Arthur

TM,

Did enjoy the veiled reference to The Princess Bride - a favorite of mine.

Jim Glass

"SS has no problems for another 4 or 5 decades. Maybe even longer."

As long as you count having to raise income taxes by 35% from today's levels by 2030 just to cover the operations of the trust funds -- as per the SS actuaries' projections -- as "no problem".

(Those trust fund bonds aren't going to pay themselves off, you know. And people forget, there are two trust funds financed with payroll taxes.)

Of course, the last time Congress found it actually had to raise taxes to pay promised Social Security benefits, it cut the that funding gap 50% by slashing benefits instead.

Perhaps that's a precedent for a problem? Well, Congress will be facing that decision by 2020 or so.

Then there's the fact that at the same time Medicare will require a 27% income tax increase (62% total income tax increase from today's level by 2030) rising to oh, about at 63% increase by 2050 (98% income tax increase total).

Of course, some say "Medicare is a different thing", but tax money is fungible. And once SS starts hitting general revenue in a big way (that 35% increase just for the trust funds) future voters might say "Heck, we don't want to pay a 62% -- 98% -- > 100% income tax increase, and health care is much more important than subsidizing retirees' vacations and spending money, so lets cut more out of Social Security and put what taxes we collect into medical care."

They'll be thinking about that around 2020 or 2030 too.

Especially the young voters -- then being under 50 -- who, courtesy of the wisdom of today's status-quoers, will have seen their SS benefits driven deep into negative returns.

They will thus have every motivation to think:

"These old-timers screwed me, why should I pony up more for them? Look at that Paul Krugman, he told everyone to screw me and he's rich. Why should I pay higher income taxes to pay him damn rich-man benefits. He's means-tested outa here! And all the ilk like him, they're all outa here!

"They all said Social Security was insurance against poverty! Fine, we'll take them at their word, from now on it's for the poor."

And Social Security is means tested into welfare. Along around 2030 or so.

BTW, means testing started the last time Congress found it actually had to raise taxes to pay for promised benefits (though they disguised it very carefully). So there's precedent here too.

Around 2030 or so, the only difference from last time will be the matter of scale.

Dick McDonald

Dear Glenn:

I find the pundits and politicians reasoning and economic documentation for private accounts so pitiful as to wonder if Bush is shooting to make this a 2007 vote with the 2006 campaign a referendum on privatization. Either that or the pundits haven't done their homework. I have written over 75 articles on my blog in support of privatization. I have shot down all the Democrat complaints. I think we can easily finance the transition. I would like to see the entire 12.4% privatized. We can afford it. A good start is selling the $1.7 trillion of fictitious bonds in the SS "fund" and paying down our "real" national debt from $7.6 Trillion to $5.9 trillion. As an old CPA I find articles about our debt, our deficits, our trade deficit and these transition costs totally brain dead. With a country whose net worth is increasing at a rate of $10 Trillion a year, whose net worth is no doubt between $120 to $240 Trillion depending on using a 10-1 or 20-1 multiple on our $12 trillion GDP, I find no articles about the sanity and macros to privatization. Bush is attempting the greatest redistribution of wealth ever concieved by man while at the same time attempting the greatest reduction in the size of government ever contemplated. The "ownership society" is coming but it would be nice if Bush had some help. I don't see much other than blather and apologies before the battle has begun.

In my SS # 48 I demonstrate that a dockworker and his wife would have a nest egg of over $3 Million after 40 years of work at today's prices and a $21,000 per month annuity to retire on. Obviously they don't need that much, but you see the potential: Like Chile a life insurance policy, health insurance premium payment, etc. could be easily paid out of such an account. Bush has a lot of fish to fry. I hate to see his plan compromised. We need a sea change.

gt

Harry, no problems means just that. That it has enough money to pay for all its obligations. And if you are not familiar with that acounting concept I'm sure you can research it somewhere. I, for example, work for a private sector company fully owned by a much larger one. My small company includes as parts of its assets obligations from the parent comapny. This is very, very common.

Same for you Jim, I'm sure you know the difference between the General Fund and SS.

gt

BTW Jim I think we all know that taxes will have to be raised, and a lot. A good part of that is to pay back all the debt the US has borrowed. As you knw we haven't had any tax cuts, just deferred taxes. We just delayed the payment date.

Tom Young

With Fair Tax: No 1-2 trillion transition cost, none whatsoever. Fully funded SS, with revenue doubling every eight years. Fully funded Medicare, (including drugs) with revenues doubling every eight years. Elimination of SS held Treasury IOUS. Privatizing the entire 12.4%. Thousands of $$$ left in my pocket. NO IRS. Full implimentation on 01JAN06 conceivable, and elimination of SS in 30 years as no longer needed.
We only need to change how we fund government. CHECK IT OUT.

creepy irish dude

So TM you mentioned Delay's role-bully for you.

My ire was more directed at the party of change vs. party of the staus quo line of BS the odious hack is pushing.

Nary a mention that the one of the highest ranking Republicans in government declared himself pro status quo early on and of what effect that has had on Bush's plans-and who knows what the devious snake has been up to behind the scenes.

The ironic deal is I agree with Delay. I'm all for Bush's plan (umm...whatever it is) going through since it would give Dems the House back.

Too bad for us Dems that Delay is smarter than Bush.

paul

Is it possible for a Democrat to discuss SS, without referencing Republicans?

No. It goes to show you how much they have given up their historical leadership of the issue. A democratic plan or suggestion would be a good thing for them consider, but after throwing rocks thru so many other's windows, they have chosen to live in caves and holes.

Do they still have time for the flat-earth Society meetings?

Harry Arthur

GT,

"... no problems means just that. That it has enough money to pay for all its obligations." I just don't agree with you at all. In about 2018 plus or minus, SS will receive less revenue from FICA receipts then it must have to pay its obligations. At this time SS will have to start using its "assets" held in the so called "trust fund" to make up the difference. That will require either SS to refinance these "assets", for the federal government to redeem them either from general fund revenues or by refinancing them, or for some level of benefit cut to occur. These "problems" will magnify with each passing year as the Boomers retire. Since the SS surplus is currently being used to fund government operations, not only will general revenue be shorted by the surplus that will no longer exist, but additional general revenue will be required to pay the difference. Hardly what I would term "no problem."

"And if you are not familiar with that acounting concept I'm sure you can research it somewhere. I, for example, work for a private sector company fully owned by a much larger one. My small company includes as parts of its assets obligations from the parent comapny. This is very, very common." I simply do not share your view that this analogy in any way represents the relationship between the US Government and the SSA. You describe two separate economic entities but the US Government and the SS Administration are only nominally separate. The bonds held by the "trust fund" are US Government obligations that were bought by SSA with the surplus FICA revenue. They are "assets" held by the SSA in the sense that they are backed by the full faith and credit of the US Government but they must be redeemed either by refinancing or from general revenue as indicated above. This is simply money that the government "owes itself" - an "I owe me" as I indicated in an earlier post. A better analogy from the business world would be Enron.

As for research, I'd suggest you look at both the Chilean experience with privatization and the Corpus Christi experience with full privatization. In both cases there was adequate testimony before the Moynahan commission to suggest that there are viable, risk-averse privatization solutions to the very real funding problems (there's that word again) that are inherent in our current pay-as-you-go SS system. The Corpus Christi system, for instance, uses NO stock purchase or stock funds at all, pays far in excess of what would be SS benefits and has a far superior death benefit, is owned by the participants, and does not rely on a pay-go system, among other things.

Finally, I'm not sure why there is so much opposition to bringing this program into the 21st century. Even Roosevelt anticipated improvements and some level of privatization when the program was initiated in 1935. I'd prefer that we have this argument nationally but the status-quo side really ought to offer some solutions better than there's "no problem" when that is a demonstratively false assertion.

TM

From Mark, 12:12 PM:

Since no plan was actually submitted, the dems don't have an issue to attack.

Huge props - via Mickey, we see that TNR's Noam Scheiber has the same idea:

On the other hand, it's not clear that Democrats benefit directly from killing privatization so quickly. They could accuse the GOP of wanting to cut benefits on the campaign trail next year. But, in the absence of an actual proposal, it's not clear that this claim has any more resonance than it would in an election cycle where the GOP didn't try to privatize Social Security. That's obviously not nothing--campaigning to protect Social Security always has some resonance. But it's not Republicans-are-cutting-your-benefits-40-percent resonant.
gt

And yet Tom I wonder is Bush is willing to simply drop this and not talk about it anymore.

gt

Harry,

Why does your side insist in havin it both ways? If SS is simply another part of the government without its own independent financial position, like the DoJ for example, then it won't run out of moenyn in 2018 anymore than the DoJ will. It only makes sense to say that SS runs out of money in 2018 if you consider it a separate entity. But in that case it has enough money until 2042 or 2052.

Max Sawicky

If the Trust Fund doesn't exist, it can't go broke. Like gt says.

TM

I wonder is Bush is willing to simply drop this and not talk about it anymore.

We get a small, partial answer to the question of whether there is a merciful G*d in heaven, in a post announcing the "60 Stops in 60 Days" Social Security promotional tour.

Do I have to wait the full 60 days, or will someone please kill me now?

Well, a bit more seriously, it looks like Bush is going to try and move the PR needle. Groan. Guess that means I need to ride to the sound of guns, or something.

Harry Arthur

GT,

I am definitely not "trying to have it both ways" as you suggest. Please re-read my comment carefully and make your argument with me, not "my side", please. You are arguing from a preconceived notion of what I believe and your notion is incorrect. I definitely did not argue that the SS system runs out of money in 2018 because it is a separate entity nor did I say it was like the DOJ. I simply said that in 2018 SS will no longer run a surplus. That is a simple fact.

This fact causes "problems" for us. First, the SS surplus will not be there to subsidize general revenue as it does now, i.e., it won't be available to partially offset the deficit. Second, the absence of SS surplus revenue normally "borrowed" into general revenue means that we will have to borrow more from other sources to fund expenses. Third, the SS system will have to either begin redeeming its bonds in the "trust fund", refinance existing bonds somehow, increase payroll taxes (FICA) or reduce benefits to pay at least some of the promised benefits, starting in 2018. There is no other way of looking at this that I can see.

Assuming that the SSA is a "separate entity" as you suggest, please explain to me, in small words that I can understand, how, when it begins to run a deficit in 2018 it will still have "plenty of money" until 2042 or 2052. Is there a SSA room somewhere with a stack of gold bullion in it of which I am unaware? Even actual paper money might suffice. But the "trust fund" is in government obligations, that's why I called them "I owe me" notes. Sure, the government will pay - from general revenue - but that implies that the government must raise taxes, cut spending (no way), or reduce benefits. What am I missing?

Harry Arthur

GT, Here is a link to a CATO editorial quoting former Democratic Congressman Tim Penny, a supporter of at least partial privatization:

"Another option is to transfer general fund dollars into the Social Security system. The logic of this approach is that the Social Security Trust Fund has been used to cover general fund obligations (or, better said, general fund deficits)—so it is only fair that the general fund return the money to Social Security when needed. Here is the rub. Over time, it would necessitate cuts in the general fund equivalent to the size of Food Stamps, Head Start, WIC child nutrition, the Small Business Administration, the Department of Interior, the Fish and Wildlife Agency, college student loans, the Food and Drug Administration, and more. Obviously, Congress is NOT going to do that. So, where will the money come from?"

If he's correct in his analysis, I'd say that constitutes a "problem."

gt

Sorry Harry but you are trying to have it both ways.

You can't say that in 2018 SS will no longer run a surplus and then ask how, when it begins to run a deficit in 2018 it will still have "plenty of money" until 2042 or 2052. One contradicts the other.

Either SS is separate or it is not. If it is not separate then there is no Trust Fund but there are no dedicated payroll taxes either. What we call FICA taxes are really just part of the income tax. In this case SS does not run out of money in 2018 just like the DoD doesn't run out of money.

If on the other hand you think SS runs out of money in 2018 that can only mean that SS is separate, with its own revenue stream. If that's the case then it's clear where the money after 2018 is coming from, from SSA's holdings of US govt debt, the safest debt in the world.

That's why your "I owe me" comment makes no sense. SS is NOT the General Fund, it is a separate entity. The fact that it is controlled by the US govt is irrelevant for this discussion. There are tens of thousands of such entities both in the public and the private sector. The money the General Fund owes SS is not like money I owe myself since the SSA and the General Fund are not the same thing.

What is an asset for the SSA is a liability for the General Fund. The General Fund will have to pay that back just like it has to pay back all other debt. There's nothing special about that.

How will it pay it back? Probably by raising taxes. What did you expect? We never had any tax cuts only deferred taxes. The ONLY way to have a real tax cut when you have a deficit is to cut spending in the same amount. We never did that so there was no tax cut. Or do you think that getting a new credit card is a raise? of course not. The tax cuts were simply borrowed money whic we have to pay back.

gt

As for Tim Penny he's also trying to have it both ways. What he is describing is a General Fund problem, not a SS problem.

TM

So TM you mentioned Delay's role-bully for you.

My ire was more directed at the party of change vs. party of the staus quo line of BS the odious hack is pushing.

Hmm, I guess either Glenn or I is "the odious hack" since that was my quick paraphrase (or, I suppose, we both are). OK, good point - Bush needs to persuade his own party that it is the party of "here's the change".

Well, Clinton was more of a centrist than his party ever became, too - it's about leadership.

TM

Harry - GT is recycling the Krugman argument offered in "The Economists Voice".

If phrased precisely, as Krugman does, one can make an unconvincing case similar to the one GT is offering (others would call it word games).

However, I think GT fell a bit short:

Either SS is separate or it is not. If it is not separate then there is no Trust Fund but there are no dedicated payroll taxes either.

Well, we could have had a dedicated tax and a true trust fund, where the obligations would heve been met by someone other than the US gov't.

How will [the Trust Fund] pay it back? Probably by raising taxes. What did you expect? We never had any tax cuts only deferred taxes.

Semi-Non sequiteur - even if we had *never* had a tax cut, the Trust Fund obligations could only be met, starting in 2018, by higher taxes, increased borrowing, benefit cuts, or other spending cuts.

More borrowing *would* be easier if we had not run prior deficits, however. OTOH, others think that Euro-style levels of taxation reduce growth and job creation.

Harry Arthur

GT, Thanks! I get it now.

My wife and I are going to start saving for retirement so we decide to put $1,000 per month into our retirement account, which we do for several months. Unfortunately, I find that that interferes with my being able to go out drinking with my buddies so I start drawing the money out and spending it. Being a responsible adult, however, I write IOUs to my wife and deposit them in the account so that at least her retirement will be secure. It's no "problem" because we both have fine jobs and I'll make the IOUs good later.

We both turn 65 and decide to retire. Of course what we have in our own little trust fund now are IOUs based on my ability to pay. Guess who gets to keep working or whose life styles must be adjusted downward? I know, we'll just let our children pay for our retirement. I know they won't mind diverting a good portion of their income to take care of us.

Sound familiar?

I'm so glad you explained it to Tim Penny and I. I don't have to worry about my childrens' retirement any more - the general fund will cover the SS shortfall - we'll just raise taxes. We were going to do that anyway, and so what if it causes the economy to tank because the capital streams have dried up. And I can just chill now - don't have to try to convince any of my young friends and family members that SS has a funding problem and just won't be there for them unless we fix it. It's all roses until at least 40 to 50 years from now and I'll be long dead by then so I can just dream on since I'll get mine.

No wonder most 20-somethings think it's more likely that space aliens exist than that they'll collect anything from SS.

Have a wonderful day. I really do hope you're young enough so that you have the opportunity to experience the result of your demand for inaction.

Harry Arthur

TM, thanks. I was trying to make that case in my previous posts and responses to GT but it seems I don't have the intellectual acumen to get it accross.

This thing is simple to me. There is a problem. It needs to be fixed. Waiting makes the problem worse. Our elected representatives from both parties need to forget politics just for once, work together and fix the problem.

This doesn't effect me personally, I'm 56 years old, but it does effect my children and quite frankly I think it's ridiculous that somehow this 70 year old program is holy ground upon which we cannot tread and which can't possibly be improved in any way. Nonsense! Let's create a 21st century retirement supplement program that people own and control, that the government can't touch, and that reflects modern economic realities.

Thanks for hosting this discussion. Please don't give up - you are the new media. The MSM either isn't intelligent enough, has another agenda, or doesn't care enough to go into the level of detail and analysis presented here by yourself and others such as Cecil Turner, Jim Glass, et al. This is too important not to have a gigantic national argument over it.

creepy irish dude

Rest assured TM you are not the odious hack. I believe you are honest and sincere in your statements, however goofy and misguided they may be ;). With Reynolds, I do not get this sense. I believe he actually writes things he knows are untrue, i.e. partisan hackery. Just link to RNC memos next time and drop the pretense.

Your earlier comment that "The fact that Reps never quite united behind anything is just one of the many challenges lurking here" is far more astute than anything on your FPP with the extended baseball analogy and all that, and far more insightful than Reynold's pathetic spin that its merely the party of change vs. the party of the status quo, which as your comment acknowledges (even if you deny it) is just plain and sample caca de toro.

creepy irish dude

Josh Marshall has a good post up. Save change vs. status quo for the campaign commercials, and let's be a little more forthright.

IMHO this accurately summarizes the debate:

"But the terms of this debate are actually pretty straightforward. The president and his supporters want to get the government out of the Social Security business by ending guaranteed benefits. It's really as simple as that. Not complicated. They'll put in its place some system of private accounts where you can save money on your own. And if it works out, great. If it doesn't, it's your problem."

If anyone disagrees with that, especially Bush supporters, please tell me what's wrong that characterization.

gt

Harry, there is a fiscal problem. Just not a SS problem. You insist on conflating SS with the General Fund wehen they are two separate things.

Tom, I didn't mean to imply that the tax cuts caused the SS problems. Rather the tax cuts made the fiscal situation worse and therefore will make it more difficult for the US govt to pay back its debt, part of which are SS's assets. That's all.

Harry Arthur

GT, you're correct to say that I "insist on conflating SS with the General Fund." As currently used they are in fact the same thing. Since President Johnson we have "borrowed" the entire surplus of the SS tax revenues and spent them, plain and simple. Sure, we "bought" US negotiable instruments with the money but those instruments have to be redeemed by cash from the General Fund. I just don't understand why this is so difficult. They are functionally the same because we have "raided" the trust fund over the last several decades so we could spend more than we made, hence my little story above.

Furthermore, we've kept the unfunded liability of the SS system off the balance sheet and spent the surplus to hide the true impact of the total deficit. So you are correct in your assertion that this is indeed a major overall fiscal problem. I just don't see why you're so adamant that SS isn't a significant part of the problem. It's all just a component of the whole fiscal irresponsibility that we've seen from both sides of the isle down through the years.

Quite frankly, playing word games with where the money has to come from to pay benefits in 2018 means nothing to me. There's not enough money coming in to pay the benefits going out. Thus, in the current pay-go system that is a "problem" of major proportions, not just simply some little funding issue. In the long run it doesn't matter which pocket you take the money out of, there's not enough there to satisfy "promises" made.

You might have guessed that I would strongly agree that the whole tax system needs to be revised. I'm more than willing to throw in MediCare (a larger problem than SS in my mind), SS and any other programs with tax simplification and a total revision of how we do business but that will require politicians to think about America ahead making political points. I'm not optimistic. Furthermore, let's hear some options from the Democrats. I just keep hearing that Bushitler is an evil idiot - not much productive there.

gt

There was no raid. One entity borrowed from another entity. That shows as an asset for one and a libility for another.

I don't see why you insist in mixing SS and the General Fund when they are two separate things.

Harry Arthur

GT, not to be redundant, but "... Thanks! I get it now."

If you truly believe that what we've done with the SS surplus for the last 30 plus years was in any way fiscally responsible then what else can I say? As I indicated to TM, I apparently just don't have the mental acumen to splain it to you so I guess that's about it for me.

gt

I never said that what the General Fund did with the SS surpluses was sound. Where did you read that?

Really Harry there is no need to make up what I say. I think I'm clear enough on my points.

Harry Arthur

"There was no raid. One entity borrowed from another entity. That shows as an asset for one and a libility for another."

My interpretation of your "no problem - business as usual" comment above. And since you apparently agree that what the General Fund did with the SS surpluses was not fiscally sound, that brings me to my point that the people ought to own their own retirement program because the government just can't be trusted with it. And that brings us directly back to privatization.

Thanks.

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