New at Reason

Tim Cavanaugh | May 2, 2005

Why won't the Democrats let President Bush help poor retirees? Julian Sanchez explores another weird battle in entitlementland.

Comments

|5.2.05 @ 7:01PM|#

Sorry, kinda new...what (who) is Rube Goldberg?

|5.2.05 @ 7:20PM|#

That is a rather excellent column, Mr. Sanchez.

|5.2.05 @ 7:35PM|#

Cap'n,

Rube Goldberg

|5.2.05 @ 7:40PM|#

Excellent article.

|5.2.05 @ 8:28PM|#

Good article. Last time I told someone social security was welfare, I was treated like an idiot for not being able to wrap my mind around the concept that it's insurance, not welfare! Really! I didn't realized how attached people are to the idea that Social Security isn't welfare.

|5.2.05 @ 9:06PM|#

Let me be the first liberal to say that Julian Sanchez is absolutely correct: Social Security is welfare. Which -- of course -- we liberals like. But so are most of the countless tax credits/deducations aimed at all segments of the tax-paying classes -- which conservatives like.

So? What do you do about that?

|5.2.05 @ 9:17PM|#

In general, I have no problem with something akin to means testing*. Not because I think it will shift public opinion against Social Security. Public opinion can be a tricky thing, and trying to manipulate it with government programs is generally in the same ballpark as social engineering and propaganda. And it's not as easy as some might make it out to be, since government programs are notorious for unintended consequences.

Rather, I support this because it will reduce the size and cost of the program. And that, as a certain parolee would say, Is A Good Thing.

*Of course, with any government project there may be a devil in the details, so when I state "I have no problem with &ltinsert project here>", that statement is contingent on there not being some monstrosity hidden in the details.

|5.2.05 @ 10:28PM|#

Good article. I got into a long discussion with a staunchly democratic friend recently, and his argument boiled down to 'if we change social security, the middle class will realize it's a form of welfare and will want to end it completely. Therefore it is better for policymakers to mislead the public. But it's for their own good!'.

I think I'll be linking him over here.

|5.2.05 @ 11:04PM|#

is there some reason we are being invited to give dad a subscription to reason for father's day, but not mom for mother's day (which is right around the corner?)

|5.2.05 @ 11:11PM|#

Belle waring wrote: "is there some reason we are being invited to give dad a subscription to reason for father's day, but not mom for mother's day"

Do you actually know any women who would be interested in subscribing to Reason but don't?

|5.2.05 @ 11:44PM|#

FYI, the "goatee" link in the article appears to be not working, but apparently this intended URL is:

http://www.io.com/~sjohn/goatee.htm

(It adds to the meaning of the article.

|5.2.05 @ 11:51PM|#

Let me be the first liberal to say that Julian Sanchez is absolutely correct: Social Security is welfare. Which -- of course -- we liberals like. But so are most of the countless tax credits/deducations aimed at all segments of the tax-paying classes -- which conservatives like.

Welfare = taking money from somebody and giving it to someone else. Tax breaks = not taking money from someone and not giving it to someone else. "Not taking" is considered equal to "a gift" only if it is assumed the government has a right to that which it is taking (i.e., that it's really the government's).

Liberals tend to think the government has that right. Conservatives tend to think it doesn't, at least not for purpose of giving it as a gift to someone else. Except maybe for corporate bailout -- which is a transfer of wealth, and therefore welfare.

|5.2.05 @ 11:56PM|#

Stevo-

While I agree philosophically, there is something to be said against economic micromanagement via the tax code. A tax break for any businessman who does some narrowly described practice is (by definition) certainly not welfare, but it would be better to take that tax break and spread it out by cutting everybody's taxes.

|5.3.05 @ 12:13AM|#

Conservatives are certainly bigger fans of tax reductions than liberals, but I think conservatives are historically better on tax simplicity. Rikurzhun is wrong to suggest that tax credits are targeted deductions are primarily a tool of conservatives.

|5.3.05 @ 12:21AM|#

the truly weird battle on social security is being fought on the john tierney section of the nytimes message board.

it made my brain hurt.

|5.3.05 @ 12:52AM|#

"Why won't the Democrats let President Bush help poor retirees?"

For one thing, Bush is *not* trying to help poor retirees, unless you use the word "help" in the sense of "not harm": He wants to keep their planned beneifts *the same* as they would be under current law, while everyone else will get less.

|5.3.05 @ 1:09AM|#

Great article Jules (can I call you that Julian?). As I've said a great many times in this board, I completely support turning social security into an old age welfare system, not prefect, but the better than most options. Though I would add an increased deduction for IRAs so people can create their own old age nest egg. Unfortunately, there are far too many voters who believe that since they paid into the Ponzi scheme for so many years, they can't get rid of it now because they want what's due to them. Sadly, most people in my generation don't vote so we have almost no voice.

"I didn't earn it. I don't need it. But if they
miss one payment, I'll raise hell!" -Grandpa Simpson

|5.3.05 @ 1:13AM|#

While it is true that tax micromanagement is distinct from welfare (we use different words to describe them), no one can deny that they are pragmatically very similar. Nor do I mean to imply that the welfare/tax break distinction can be mapped 1:1 onto the liberal/conservative dimension. Rather I mean to point out that both groups like to play with the distribution of debits and credits.

I also think Julian is completely correct about the source of liberal opposition to progressive indexing.

|5.3.05 @ 8:23AM|#

Julian sayeth, "Most wonks on both the left and the right would probably..."

I hereby propose that the term "wonk" be stricken from the human dialect (along with "nosh", another one of the stupidest words in the history of mankind).

Mo sayeth, "Unfortunately, there are far too many voters who believe that since they paid into the Ponzi scheme for so many years, they can't get rid of it now because they want what's due to them."

Can you blame them? I'd like to get rid of the Old Folks Welfare Scheme just as much as any libertarian, but then again, I've only been robbed by it for about 10 years of my life. I can imagine that if I were about 55 years old, and had been thieved-upon for decade upon decade, then, yeah, I might get a little pissed if, one day, the gubmint came out and said, "hey, remember all that money we stole from you, but promised to give back? Well, now we're not gonna give it back! Hawww Hawww!"

Anyway, the governments of the 20th & 21st centuries seem so very good at various forms of democide, for myriad reasons. So, why not just kill everyone when they reach retirement age? Par for the course, as far as our murderous political class goes.

|5.3.05 @ 9:03AM|#

yes, but wonks, if you spend enough time around them, deserve a stupid word.

|5.3.05 @ 9:15AM|#

Good article. You can see the unease the left has with having to defend the whole contraption in posts by Matt Yglesias and other bloggers. There is the tactical post that says There Is Nothing Wrong Here, then, amazing dodges to the challenge that Gates shouldn't get a welfare check.

I find it ironic that the program that is touted by the left as the most successful government program in history needs so much lipstick.

|5.3.05 @ 9:29AM|#

thoreau,

While I agree philosophically, there is something to be said against economic micromanagement via the tax code.

Wait till you see the micromanagement in the means testing!



The current soc. sec. system already has means testing, it seems like insurance rather than welfare because a huge percentage (90% let's say) qualify for benefits - basically you don't qualify if you're dead.

The scare tactic is the "what about the elderly poor" which is at most a much smaller percentage, say 30%.

The current system gets pretty close to 99% participation, and slightly smaller percentage of beneficiaries (90%, I'm just making the numbers up to show size and proximity). A typical government plan - take in X dollars are pay out slightly less than X dollars. Only politicking could account for the fact that the actual system pays out slightly more than X dollars (in increased benefits and administrative costs).

But nealry every proposal of fixing it is even more of a scam. Either continue take in X dollars and change the system to pay out way less than X dollars OR take in a lot more than X dollars and continue to pay out only slightly more than X dollars.

Since the number of needy who cannot work (30%, from above) is way below the current number of beneficiaries, the goal should be to take in way less than X dollars (call it Y dollars), and pay out slightly less than Y dollars. Government gets its "profit" and the truly needy get their welfare and the whole system is smaller.

But that won't ever happen because government will never settle for taking in less than X dollars. That's why Bush's "personal account" percentage is so paltry (4%?) - the government can make that up with a little inflation.

|5.3.05 @ 9:41AM|#

It must be great being in the Libertarian Party whereby not winning any elections you do not have to worry about politics that surround policy.

Months ago, I probably would have agreed with you, quietly, about Social Security. However, the more I understand the program the more I view it as very close to correct. THe investment vehicle of Social Security is an investment that everyone should have as a baseline. It has extremely low administrative costs, provides very important insurance for death and disability. As a baseline it allows greater risk in investment and opportunity above that.
Of course, your core principles are not mine.

|5.3.05 @ 9:45AM|#

Julian,

Why aren't liberals doing cartwheels over Bush's proposed cuts for the wealthy, upper middle class, and lower middle class? First, because those cuts go pretty far down the wealth ladder.

Second, because liberals don't generally care about reduing the wealth of the wealthy for its own sake. Bush's proposed cuts for the wealthy don't put more money in the pockets of poor people.

Third, there is a huge benefit that Social Security provides to the middle class - a guarantee. No matter how long you live, no matter what the stock market does, no matter how many shady accounting and financial firms get looted by wealthy political donors, you still get your check. Such a rock-solid vehicle is an important part of any retirement planning.

MP|5.3.05 @ 10:01AM|#

theCoach,

If you are really interested in debating that the bonds held in the SS Trust Fund are truly assets, I suggest you join in the debate over at Asymmetrical Information.

joe,
There you go again...throwing out the word "guarantee" like it is some sort of inviolable truth. Let's all repeat the mantras, shall we?

Social Security is a guarantee.
Social Security involves no risk.
Private accounts are the same as gambling.
Global warming will lead to Waterworld in the next 50 years...or an Ice Age.

(sorry...had to sneak the last mantra in there)

|5.3.05 @ 10:02AM|#

Coach-
I don't know anybody who's in the Libertarian Party.

|5.3.05 @ 10:05AM|#

MP,

How many times since Social Security was founded have the checks failed to go out, at the promised amount, on payday?

I'll save you some googling - the answer is zero (0).

The only risk involved in the Social Security is the risk that politicians who don't want the program to exist might gain a majority in Washington. You don't get to point to that circumstance as both the threat, and the solution to that threat.

Oh, and private accounts are great. They're just not the be-all, end-all, because they can't provide the guarantee a universal public system can provide.

|5.3.05 @ 10:23AM|#

joe,

where does the money for those checks come from and is it an endless source?

|5.3.05 @ 10:24AM|#

Isn�t social security already a welfare program? As it is, social security steals from one group of people to give to another. I would guess that would depend on how you define welfare. I define welfare as stealing from one defined group of people to aid another defined group of people. The social security system steals from minorities (who tend to have shorter life expectancies) and gays who can�t collect widow�s benefits when their partner dies. That shit of social security being insurance only applies if you are a white woman married to a white man who died shortly before or after retirement, unless of course you were uppity and make too much money.

|5.3.05 @ 10:29AM|#

MP,
what Joe said. I have read JaneGalt.net and find it mildly dishonest, and not worth reading. I wish it were not so. Here, I find I have core principle disagreements, but that the commentary is very smart, insightful, honest and not, for the most part, disingenuous. Not true at Galt, although it is a shame because I really did like that guy from Yale.
I will go check it out, though, because you recommended it.
Let me suggest to you, though, that there are no guarantees. Lets say you have a private account in an IRA. What is to stop a communist takeover of this country, voted in democratically, from levying a 99% tax on your IRA? The only thing preventing it is that we do not let politicians get away with it. Only this time we elected the idiot son of an asshole (actually I kinda like GHWB), who got really popular because we suffered a national disaster, and being a delusional idiot, thought he could default on the Trust fund.

|5.3.05 @ 10:29AM|#

"The only risk involved in the Social Security is the risk that politicians who don't want the program to exist might gain a majority in Washington."

along with the requisite tax increases, indexing, lifting the wage cap 30 to 50 grand and some benefit cuts along the line.

|5.3.05 @ 10:30AM|#

jc,
The money comes from a tax levied on payroll. As long as there is an American payroll, the source is endless.

|5.3.05 @ 10:31AM|#

jc, the money comes from taxes, and government tax collection has proven to be the most effective, dependable method of raising funds in human history. Something to do with "sovereign powers."

"As it is, social security steals from one group of people to give to another." Er, no, Social Security collects from a group - the American workforce, at any given moment in time - and pays out to that same group, later.

Also, mike, you're about a month behind on the question of minority fairness. Given the lower incomes of black people, and given that their shorter average life expectancies result from heightened mortality before their working years (their life expectancies at retirement are almost identical to white people, while men living slightly shorter and women, slightly longer), African Americans actually get a better rate of return, on average, than white people.

|5.3.05 @ 10:47AM|#

I'm coming in all late and OT here, but I'm a mom who would like a print subscription to reason and doesn't have one. what am I, chopped liver?
also, liberal supporters of SS tend to reject Bush's most recently proposed reforms on the following grounds:
1. only using the "medium productivity" assessment of the SS program (which has every year been proven unduly pessimistic) does SS have any shortfall at all; thus a "wait and see" position is entirely rational.
2. proposing to sharply cut the benefits of everyone earning over $20,000 per year does not count as "progressive" under any ordinary meaning of the term.
3. also, under the Daniel Davies theorum, any proposal which requires massive lies to be told in order to sell it to ordinary people (let's just take "only well-off retirees will have their benefits cut" for starters), is a bad policy.

thank you. also, where's my mother's day subscription? I want some of that sweet sweet Matt Welch-railing-against-the-powers-that-be-in-baseball love.

|5.3.05 @ 10:48AM|#

And don't forget that Social Security benefits also go to surviving children and people with disabilities. It's not just retirees and spouses.

fyodor|5.3.05 @ 10:58AM|#

joe,

How many times has the stock market not outperformed the "guarantee" of Social Security over a fifteen year period? I think it's zero. What percentage of people get their retirment plans "looted"? Probably so low it might as well be zero. And BTW, have you heard the old saying, "past performance is no guarantee of future performance"? It might be a very good indicator, but then Social Security is going through demographic changes it's never faced before. And whether Bush's plan puts more money in the poor depends on what you're comparing it to. Compared to the previous plan, no. But the funding for that previous plan wasn't there. So Bush's plan makes it possible for the poor to continue to get their scheduled increases in benefits. In lieu of another way to accomplish that, perhaps that's worth doing cartwheels over. Oh, but we know what the only other alternative would be. Raise taxes. I'm actually surprised I haven't heard more about Democrats suggesting that we raise the FICA taxable income ceiling. And I suppose that would be a perfectly suitable solution if one saw nothing inherently immoral about the coerced taking of people's money AND was blind to the overall effect on the economy of such.

Ha-ha, just hit reload to see if my post had been covered, and I see joe singing the praises of taxation. I don't know about efficient, but he's right that taxation sure is effective. What better way to get people to contribute money than to throw them in jail if they don't? (And of course shoot them if they would prefer not to go there...)

|5.3.05 @ 11:08AM|#

"How many times has the stock market not outperformed the "guarantee" of Social Security over a fifteen year period?"

For every single investor? I'd say that during every single fifteen year period since the 30s, there have been some investors who lost so much money that they'd have been better off with Social Security. That's the point of Social Security - it socializes the risk, so that nobody falls off the edge. You want to redesign SS so as to invest the SS Suplus and aggregate the returns, I'd be interested to see the plan.

But simply talking about the mean demonstrates your willingness to see a portion of the public sacrificed.

|5.3.05 @ 11:12AM|#

fyodor,
So many tragic shootings of people who do not pay their taxes.
There are, I assume, thousands of examples of people's private accounts not outperforming SS. It happens all the time. Some people make bad decisions.
The demographics that hit SS, alo hit the private market.
Bush's plan is NOT funded. It is about 50% funded - the Pozen plan is about 70%, and Bush adds benefits on top of that, although, of course, there is no actual plan.
So Bush's plan does not make it possible to cover the increases. Additionally, you are assuming that the 30+ year actuarial tables are exactly on the money - guess what, they will not be. It is hard to know how they will be off, but if we stay on the historically more accurate low cost estimate, and productivity increases faster than the dismal predictions in the intermediate plan, benefits raise much more slowly under the Bush plan.

|5.3.05 @ 11:12AM|#

"And whether Bush's plan puts more money in the poor depends on what you're comparing it to. Compared to the previous plan, no. But the funding for that previous plan wasn't there."

Actually, it very likely is there, always has been there, and only appears to be inadequate if you use unduly pessimistic numbers.

The average rate of growth in our nation's economy since the end of the Civil War has been 3.4%. If we average just under that over the next few decades, there will never be a Social Security shortfall. During the last quarter of 2004, the economy grew at a rate of 3.75%.

MP|5.3.05 @ 11:29AM|#

Er, no, Social Security collects from a group - the American workforce, at any given moment in time - and pays out to that same group, later.
Er, no, Social Security collects from a group - the Americal workforce, at any given moment it time - and pays out to a different group - the elderly, now. It's a direct transfer of wealth. The surplus is then spent by pork barrel loving politicians of all stripes and booked as a bogus accounting entry.

If we average just under that over the next few decades, there will never be a Social Security shortfall.
I know you've made this claim on day's past. Please re-link to the analysis that discusses that. I'd like to review it again.

So many tragic shootings of people who do not pay their taxes.
That's simply an exaggeration commonly used to refer to the power to the state. However, exaggerations aside, there are plenty of people in jail for not paying taxes, and plenty more who choose not to run the risk of jailtime (enforced at the barrel of a gun) in lieu of not paying taxes they feel are unjust.

But simply talking about the mean demonstrates your willingness to see a portion of the public sacrificed.
No, that's just crap. SS is structuraly dishonest as it is commonly assumed to be insurance or a pension plan. Let's just call a spade a spade and start calling it welfare for the elderly.

fyodor|5.3.05 @ 11:32AM|#

the Coach,

So many tragic shootings of people who do not pay their taxes.

Ha-ha, good one. Yeah, most people are smart enough to go to jail considering the consequences if you refuse.

The demographics that hit SS, alo hit the private market.

You're saying that the relative aging of the population will inevitably lead to a downturn in economic growth? That's not nearly as certain as that it would lead to the need to tax fewer people more to pay for more retirees.

joe, coach and belle waring,

I'm no actuarial expert, so I'm willing to admit that if you're correct that the money is there, you're correct. Seems to me common sense that as the population ages, less workers would have to be taxed more to pay for more retirees to maintain the scheduled benefit increases. But whatever. Anyway consider this: just as we can take a "wait and see" attitude and do nothing until we absolutely have to, we can also take prudent steps to make Social Security solvent in a way that maintains the scheduled benefit increases for those who most need it now, and then if we really have more money than we need down the line we could still increase benefits then.

fyodor|5.3.05 @ 11:35AM|#

and then if we really have more money than we need down the line we could still increase benefits then.

Please allow me to amend that to: "and then if we really have more money than we need for Bush's plan down the line, we could still reinstate the benefits increases to what they would be under current law."

|5.3.05 @ 11:43AM|#

fyodor,
Now we are getting somewhere. Let me propse that in 2052, or 2050, the year that SS starts being underfunded according to CBO that if it actually is underfunded, the congress of that period must vote on one of 3 plans, make that 4 - 1) make up the gap through benefit decreases, 2) make up the gap through tax increases, or 3) Make up the gap through a combination of the two, or bonus plan 4) change the law as appropriate.
Instant solvency!

|5.3.05 @ 11:48AM|#

great piece, Julian.

MP|5.3.05 @ 11:48AM|#

Yes, that's right coach, ignore the real date of 2018, keep working with the fictional date, keep making bullshit promises until whatever date, and then change everything according to the needs of that point in time. Great plan. Me, I prefer a plan that is honest in its implementation and expectations.

|5.3.05 @ 11:49AM|#

MP,

"Er, no, Social Security collects from a group - the Americal workforce, at any given moment it time - and pays out to a different group - the elderly, now."

If Social Security only existed as a one time transfer, this would be an accurate statement. But in fact, under the existing system, the American workforce of today will receive their checks, too.

Also, calling something "crap" and typing a poker-based cliche doesn't actually refute my point, that discussing only average outcomes ignores the tails of the bell curve.

|5.3.05 @ 11:53AM|#

fyodor,

"Seems to me common sense that as the population ages, less workers would have to be taxed more to pay for more retirees to maintain the scheduled benefit increases." That depends on what the meaning of the word "more" is.

Over time, due to productivity growth, each worker produces more wealth. Thus, taxing workers at exactly the same level will generate more revenue.

Also, if Social Security ran constant surplusses as the worker/retiree ration declined from 13:1 to 3.6:1, why are we supposed to believe that the decline from 3.6:1 to 2:1 is going to be an budget-busting event?

|5.3.05 @ 11:55AM|#

fyodor,

I'm all for prudent planning. Keep the budget in line, shrink the national debt, and if providing required benefits requires extra revenue for a few years, we'll have plenty of debt capacity when the time comes.

|5.3.05 @ 11:59AM|#

"we can also take prudent steps to make Social Security solvent in a way that maintains the scheduled benefit increases for those who most need it now, and then if we really have more money than we need down the line we could still increase benefits then."

We did take some prudent steps in 1983, by prefunding - what else are you going to do? But now people are claiming that prefunding is just worthless IOUs. What else are you going to do?
Your solution, to reduce scheduled benefits, just in case we are not able to fund them, and then reinstate if it turns out that we can is just accounting gimmickry (kind of a joke) -- why not wait to change the scheduled benefits when it is a little more clear what the funding will look like in 2050. For example, under current law we are not able to recalculate the latest massive increases in productivity because it only takes into account the years before 2000 (or something similar to that).
If you would like to negotiate a trigger that either increases or decreases scheduled benefits according to productivity growth, I would welcome the opportunity to put something like that into law.

|5.3.05 @ 12:09PM|#

MP, you should be furious at Alan Greenspan who suggested the prefunding that we have been paying into. Me, I do not consider it a problem and consider the full faith and credit of the United States to be a solid guarantee, as far as these things go. Went to JaneGalt, by the way, and it was rather silly, and a lot of chest thumping, and it was by Mindles! [deleted a longish, out of place bit on that post]

|5.3.05 @ 12:12PM|#

This comment's a little late for relevancy, but regarding stock market performance... you will ALWAYS make money (more money than putting your cash in under the big dirty national mattress that is SS) if you start investing in a broad-based index like a S&P 500 or Russel 2K (or even a not-so-broad-based index like the DJ) over the span of 40 some-odd years. The only people that get "killed" in the stock market are day/short-term traders who go on "hot tips." And if you do that, you deserve to get burned.

|5.3.05 @ 12:19PM|#

joe,

Are you saving money for retirement above and beyond your expected Socoal Security benefits? If so, shouldn't the government let you pay even more FICA taxes so that you have a larger guaranteed Soc. Sec. payout when you reach the beneficiary age?

|5.3.05 @ 12:41PM|#

Randolph,
First, 'ALWAYS' is obviously not true. It has been true in the past, but as they say, past performance and all that. Second, you are putting some serious restrictions on 'choice'. Third, do you think there might be an effect of forcing a portion of all Social Security earmarked revenue into one of those accounts -- there is some serious distortion that we have not seen in the past.
The only people that get killed in the stock market are the ones that are permitted to make choices, and choose poorly or unluckily, and those people are a big part of the engine for making the stock market, as a whole, perform as it does.
Russ D,
An investment strategy should have diversity. The less you have, the more one should focus on guarantees-- less rik strategies.
Can you think of a fund that has the properties of Social Seucrity (very low administrative costs, guaranteed benefits, survivor and disability benefits, as well as being like an annuity in retirement?)

|5.3.05 @ 12:44PM|#

RussD,
On re-reading your post, should joe have the option of diverting more money into Social Security? I think that would be a good idea, as long as it did not significantly affect the administrative costs.
I got the feeling that you were arguing that since all retirement income should not be in SS, then none should, which is of course silly, but on re-reading it is not at all clear that is what you meant.

|5.3.05 @ 12:45PM|#

Over time, due to productivity growth, each worker produces more wealth. Thus, taxing workers at exactly the same level will generate more revenue.

Except that workers have NEVER been FICA taxed at the same level over time. The FICA rate has gone up (never down) 21 times since 1940. All the productivity gain gets sucked up by the increases in benefits. On top of the fact that the "means" (full benefit retirement age) has increased over that same time for people who wouldn't be eligible for benefits yet at the old "means".

joe, as an employee of the city of Boston, are you eligible to participate in an alternative retirement system?

|5.3.05 @ 12:45PM|#

Russ D, I, I'm just going to cut and paste from one of my earlier comments:

"Oh, and private accounts are great. They're just not the be-all, end-all, because they can't provide the guarantee a universal public system can provide."

A good investment portfolio includes a mix of high and low risk vehicles. A guaranteed defined benefit plan is the rock solid foundation on top of which a more dynamic structure can be built. They're two great tastes that taste great together.

|5.3.05 @ 12:51PM|#

Also, I don't work for Boston, but yes, I am in the public employee system, for now.

MP|5.3.05 @ 1:03PM|#

Also, calling something "crap" and typing a poker-based cliche doesn't actually refute my point, that discussing only average outcomes ignores the tails of the bell curve.
My point was that the fact that a system of self-directed investments ignores the "tails of the bell curve" does not invalidate the legitimacy of such a pension plan. If you want to also provide welfare for the "tails", then that should be setup as a separate welfare program and sold as such. I just happened to think that "crap" summed my point up much for succintly, as I had to go out for a PT appt.

MP, you should be furious at Alan Greenspan who suggested the prefunding that we have been paying into.
Yes, I think the "reform" of the early 80's was a bogus delaying of the inevitable. The "full faith and credit" is founded on the government's ability to raise taxes without causing a revolt or an economic collapse. You could do your part by simply doubling your tax payments now, as it appears you have no issue with paying whatever is dictated by "the man".

|5.3.05 @ 1:35PM|#

The people who love the guarantee of social security are the same one who get enthused by casino billboards totuing slot machines with 98% payouts.

|5.3.05 @ 2:18PM|#

It's amazing the contortions liberals will go to on this subject.

joe: "Second, because liberals don't generally care about reduing the wealth of the wealthy for its own sake. Bush's proposed cuts for the wealthy don't put more money in the pockets of poor people." That's funny, because you guys get furious about any tax cuts that in any way benefit the "rich". Letting people keep more of what they earn is bad because it "costs" too much, but there's no problem with sending them taxpayer-funded checks. I see the pattern here, and it has nothing to do with rich vs poor, it's government=good and self reliance=bad.

Coach: "Me, I do not consider it a problem and consider the full faith and credit of the United States to be a solid guarantee". Yes. It's a promise to tax the hell out of future generations. Some of us would prefer to avoid that if possible.

|5.3.05 @ 2:33PM|#

'That's funny, because you guys get furious about any tax cuts that in any way benefit the "rich".'

Only when they cost too much, and eliminate resources that would otherwise be available for necessary programs. Al Gore supported a $600 billion tax cut in 2000, a substantial portion of which would have gone to the wealthy.


'Letting people keep more of what they earn is bad because it "costs" too much, but there's no problem with sending them taxpayer-funded checks.' Uh, yes, it costs too much, because it eliminates the ability to cover the taxpayer-funded checks.

If you look up the word "contorting," it isn't actually defined as "making an argument that undermine's the opposition." You shouldn't assume that your opposition is animated by the polar opposite of your own beliefs, any more than liberals should assume that conservatives are motivated by racism or bloodlust. Liberalism and conservatism are not mirror images of each other.

|5.3.05 @ 2:35PM|#

'You could do your part by simply doubling your tax payments now, as it appears you have no issue with paying whatever is dictated by "the man".'

It's better to avoid raising taxes unless they're absolutely necessary. I don't believe raising taxes will be necessary to pay for Social Security, as the projected shortfall is based on overly pessimistic assumptions. Why would I want to raise taxes to solve an imaginary problem?

MP|5.3.05 @ 3:04PM|#

as the projected shortfall is based on overly pessimistic assumptions
Again, if you still have those references handily available, I'd appreciate it if you could post them. This is not an "oh yeah, prove it!" request, but simply a "seeking further detail" request.

|5.3.05 @ 3:05PM|#

I don't believe raising taxes will be necessary to pay for Social Security, as the projected shortfall is based on overly pessimistic assumptions.

joe, even the optimistic assumptions project an eventual shortfall. Why is "doing nothing" prudent in that case?

|5.3.05 @ 3:06PM|#

MP,

I'll answer your request:

http://joewilson.house.gov/UploadedFiles/RETIRE%20-%20Social%20Security%20Brief%20Facts%20and%20Statistics.pdf#search='FICA%20rates%201940%20OASDI'

|5.3.05 @ 3:36PM|#

MP, I don't have anything handy. I'd steer you to thereisnocrisis.com.

|5.3.05 @ 5:04PM|#

"'Letting people keep more of what they earn is bad because it "costs" too much, but there's no problem with sending them taxpayer-funded checks.' Uh, yes, it costs too much, because it eliminates the ability to cover the taxpayer-funded checks."

And there it is. Why on earth do we need to be taking money from the rich and eventually handing it back to them after running it through layers of bureaucracy? Just tax them the appropriate amount and be done with it.