Glimmers of Hope

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Bush has just talked at some length about making Social Security reform a priority. He said the same thing in 2000, of course, but who knows: If we can manage not to invade any other countries and focus on issues like that, libertarians may yet get something out of a second Bush term.

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  1. Somebody help me with this. What is the difference in an IRA or a 401k and still another personal savings plan carved out of SS bennies?

    Really. Help me.

  2. And health savings accounts…

  3. Gadfly,

    Not sure what you mean, but I’d say that in some respects there’s no difference at all and that’s exactly why allowing people to invest a portion of their SS tax is good, because IRA’s and 401K’s almost always result in much greater bennies than SS. The remaining difference being that SS savings plans would still come from taxed dollars and therefore would remain mandatory, but I’m sure you knew that already.

  4. Dude, has the guy told the truth about anything YET? How many times do you have to hear him sound out his talking points before you get it? I hope nobody voted for him out of a vain hope he’d really do anything with SS. If anything , he’ll probably steal the last of the SS money to pay for his next round of wars.

    Here’s what Bush is gonna do instead: he’s gonna ride around on Air Force One collecting souvenir cowboy hats and signing whatever dingbat neo-con horse-crap they put in front of him to sign. He’ll get on the tube and stutter and stammer a few times, then he’ll finish his term and live out his days watching re-runs of Mama’s Family.

  5. I know the Libertarian orthodoxy is to can Social Security or at least privatize it, but to be honest (putting up flame shield now) I don’t really mind Social Security so much. What I *do* mind very deeply is the accounting dishonesty. What I would like to see out of Social Security “reform” is simply to stop raiding the money for the general fund. Once we (the country) are honest with ourselves about the costs and what we can afford, only then can the situation be dealt with intelligently. IMO.

  6. Attacks flame shield with +4 bucket of Ice cold water of reason.

    So far I’ve “contributed” about $50,000 towards social security and I’m 35. By the time I’m retired at 65 I’ll have contributed somewhere around $250,000. Even if our government didn’t constantly raid SS to pay for blowing up brown people and actually saved the money for us to use when we retire I still wouldn’t get shit comparred to what I would get in a private account. But because of our lack of spending dicipline I fully expect to pay in 1/4 of a million dollars and to receive nothing from SS when I retire. Bush isn’t going to touch this issue in his 2nd term. But on the off chance that he does is suspect that he’ll actually make it worse(by raising the payroll tax).

  7. dead elvis-

    Feel free to invest in any hairbrained pyramid scheme you want, but please leave me out.

  8. “IRA’s and 401K’s almost always result in much greater bennies than SS.”

    See, those little word “almost” is the problem. Without a guaranteed benefit system, some people get nothing. It it’s not social, it’s not security. This is a values issue – is it better for some to have nothing so that others can be wealthier? – and the libertarian insistence on ignoring this question and focusing entirely on bugetary questions is why you don’t have any credibility on the matter. People aren’t interesting in hearing about how your program would be better funded, if they don’t want your program to begin with.

    Hence, people like Drew need to ignore the real question – should we collect X so that people can get Y – and argue that it’s bad to collect X and give people nothing. Well, no shit Sherlock.

  9. Ahh, the best that’ll happen is that Bush will sign some feel-good-but-ultimately-meaningless “reform” that will enable people to contribute about 1% of their current contribution to some “private” account. You’ll probably get a choice of 1 of 2 “privately run” companies (in reality, government run) in which to put your money.
    I’m not feeling particularly optimistic.

  10. Gadfly, about health savings accounts:

    They seem to be basically tax shelters that you can put some pre-tax income into, and then use for approved uses without paying taxes on that income come April 15. Just saw some information on one from and employer, with a big list about what you can use them for and what you can’t. I think if you pay for ‘non-approved’ items, you will end up paying income tax on that amount. I think it acts like an IRA, in that you can direct the investment so that it can get a rate of return.

  11. “This is a values issue”

    Exactly. It is absolutely wrong to coerce innocent people. You do not have the right to make me do what I do not wish to do.

    That’s a values issue.

  12. I guess my point is, why do we have 2 or 3 accounts trying to accomplish the same thing?

    By the way, Medicare is in way more trouble than SS and nobody’s saying a thing about it.

  13. Do I have the right to make contribute money to the national defense?

    Unless you are actually an anarchist, the values issue is not whether you should be compelled to contribute to the well-being of your neighbors, but what activities are properly funded by those contributions.

  14. Based on Bush’s record- I’d say we’ll have social security “reform”, but, through Bush and Congress’ voodoo powers of doing the opposite of what they say, it will somehow get mangled into a huge corporate giveaway, rather than real choice for individual contributers.

    I predict you will be able to invest up to 2% of you contributions: 1% into the Carlye Group and 1% into Halliburton. The remaining 98% will be invested on your behalf into freedom for the a-rabs.

    Oh yeah – and old people can bitch and moan about social security reform all the way to their grave – they were the demographic that overwhelmingly voted for Bush in the first place.

  15. These forums are basically venues for people to put in their 35 cents worth (inflation adjusted) and serve no othe actual purpose since one side already knows it all and the other side knows better.
    No minds will be changed, no impact upon the real world will come of it. Basically an opportunity to entertain ourselves with reading and writing.

  16. Joe:
    Unless you are actually an anarchist, the values issue is not whether you should be compelled to contribute to the well-being of your neighbors, but what activities are properly funded by those contributions.

    So I should be asking myself what sorts of restrictions the government should place on my neighbors’ SS benefits? So it’s morally acceptable for the gov’t to tell people “you can have your retirement benefits, as long as you don’t spend them on X, Y, and Z”?

  17. Sam-

    Your post is an utter non-sequiter, but here is my $.02 cents. Discussion boards are a good way to hone or refine ideas and arguments that can be used to discuss the issues with nonbelievers in real life. It is also a place for those of us in ridiculously ‘blue’ areas to discuss ideas that are conisdered taboo and/or offensive the people around us. It is also a good way to express anger and frustration. And don’t be so sure that minds can’t be changed…

  18. Investment tip: Load up on cat food futures.

    The seniors, they gotta eat!

  19. db, I guess it would be morally acceptable to limit what SS benes could be spent on, as is done with food stamps, though not necessarily a good idea.

    If you were not allowed to spend the money at black-owned stores, for example, that would not be morally acceptable.

    On principle, he who pays the piper, calls the tune. That’s not to say that he who pays the piper automatically has good taste is music.

  20. Sam,

    Your posting on the pointlessness of these forums and how they never change minds really hit home. I’ve changed my mind and I’m not spending any more time reading or writing on these things. I’m looking forward to your respone and will check back later.

  21. Those Republicans keep dreaming up savings accounts for **everything**.

    Here’s an idea: A _universal_ pre-tax savings account whereby I keep my money pre-tax and then I figure out how I want to use it.

  22. I don’t believe I’ve ever seen that, a mind changed that is. Of course, doesn’t mean it never happens.
    What I generally see is opposing sides firm up their opposition to each other. Rarely do I see people asking for imformation to help them make up their minds. Usually criticism is offered on how minds are already made up. Then counter critiques. In other words, the refinement tends to be in the ability to argue one’s point.
    Premises on which arguments are based seem to never be modified, if even discussed.

    Basically collectivists have one basis and libertarians have a different basis.
    I accept the libertarian basis, and whenever I’ve had success in bringing someone around, it is either the result of having stumbled across fertile ground or after doing a lot of work with the resistance I find in those who are emotionally invested in their worldview.
    More work than can be done in passing forums such as feedback on blogs that turn over in a day or two.

    As we have seen in the last election of ‘small government’ republicans, little changed until the 9/11 attacks gave the PNAC group the opportunity to effect their proposal. But still, chicken little politics prevails and the people, as always, react from fear.

    The government is bigger, war making is perpetuated, and the peole have spoken: so let it be.

    I wish that Bush had made a bigger deal of SS reform, I suppose his group was concerned that the Ds would more successfully use it against him. Can’t risk losing the AARP vote you know.
    And we still have that stupid embargo on Cuba.
    There is no policy so stupid that it can’t be renewed administration after administration.

    Gee I suppose that was a rant.

  23. Sam, minds do change. Its just that most people are too much of egotistical scumbags to admit it. Kind of like the chubby ex girlfriend you’d keep trying to get to exercise, but she never would, then when you dump her she turns into an exercise maniac and loses 35 pounds and the next time you see her she’s really hot.

    Nobody ever changes in front of the person who showed them they were wrong. They step into a secret closet and do it, then come out pretending their new thing was what they’d been doing all along.

    Know this, and understand that you can and do influence people. It’s just that you’ll NEVER get the credit for it.

  24. My mother predicted last night that Bush’s re-election means no social security for her.

    In 2000 she made the same prediction. Bush didn’t do much in regard to Social Security in his first term, but he did dramatically expand Medicare.

    In 2008 she’ll probably predict that with the election of Jeb Bush her Social Security benefits will evaporate. This in spite of the 2007 legislation signed by Bush to increase Social Security payments.

    In 2016, when George Prescott Bush wins, and my mother is just a few years away from receiving Social Security, she’ll predict that this time it’s really going to happen. Never mind that in 2013 Jeb Bush signed the legislation mandating 25% payroll taxes on all workers.

    And in 2024, when Jenna Bush is elected (with 48% to the Democrats’ 47%, and Nader’s cryogenically preserved corpse taking 5%) my mother will predict that Jenna is going to eliminate Social Security after being elected with 80% of the elderly vote.

  25. I think Bush delayed social security privatization until his second term because it’s a politically risky thing to promote. There are a lot of ignorant people out there who think that privatized savings accounts are riskier than Social Security, and the Democratic Party loves to play on their fears. Now that Bush doesn’t have to worry about reelection, he can take on politically riskier goals.

    Oh, and by the way — money that the government pinky-swears it’ll give the money back in 30 or 40 years is NOT a “guaranteed investment”. The government took your money and spent it, and gave you an empty promise in return.

  26. Actually, I think Bush pushed it off because it’s expensive. Obviously, if you divert payroll taxes — even a tiny percentage — into private accounts, general revenue taxes have to make up the outflow to current retireees….and everyone else. Including the boomers.

    So we’re looking at an expensive program to set up that, once set up, will cost a ton of money (money equal to the amount set aside each year for the private accounts) each year.

    Have you seen the size of the deficit?

    The religious right may have crawled up Bush’s ass and set up an altar, but WASPs like my father are going to be HORRIFIED by the size of the bill. It’s an article of faith to him that Republicans are all about shrinking the deficit and cutting spending, but the deficit numbers this will wrack up will cause his head to implode.

    *snort*. I suppose Bush could always “cut spending”, but come on…the GOP has been spending like drunken sailors. Do you honestly think it’s going to stop? Especially one you make those tax cuts permanent, fix the AMT, and cut taxes even more on investment?

  27. Anti-Sam
    I didn’t say it was pointless. I admitted to entertainment value. Same reason I read letters to the editor.

  28. Bush’s idea of SS “reform” is a kin to electricity “de-regulation” in California.

  29. joe, I’d buy your concept of “but what about the 1 to 3 percent who make really stupid decisions with their money and buy some magic beads, what about them?” if I’d heard ONE Democrat ever talk about poverty protection for senior citizens in regard to social security.

    But they haven’t. It’s easy enough to have a guaranteed bottom for those who have zero other income or assets. It won’t cost much either. Eliminating the need for, say, George H. W. Bush to receive benefits would be a great moral issue.

    But you’re not making that an issue, you’re making “GIVE ME MONEY! I’M OLD!” an issue, and that carries very little moral weight.

  30. Actually, I think Bush pushed it off because it’s expensive

    No, not really. Right now the government funds its spending by “borrowing” from the Social Security fund. Privatizing Social Security would simply require the government to go borrow the money from someplace else instead. That may *seem* more expensive, but that’s just because at the moment the government hides the true costs of Social Security behind a layer of bullshit bookeeping that would make an Enron executive blush.

    As things stand now, the Social Security system will collapse years before I reach retirement age. All the money I’m paying into it is, therefore, wasted — it’s money I’ll never see again, not even at the shitty rates of return that the government has promised me. Now that’s what I call “expensive”.

  31. Have you seen the size of the deficit?

    The religious right may have crawled up Bush’s ass and set up an altar, but WASPs like my father are going to be HORRIFIED by the size of the bill.

    mr morat, i agree. for all the philosophical discussion here (which is interesting), privatizing social security is fantasy.

    it is fantasy. again, it is fantasy.

    of course, that doesn’t mean it won’t be enacted.

    Privatizing Social Security would simply require the government to go borrow the money from someplace else instead.

    this is completely correct, mr dan. the question is: to you think they can without destroying us?

    as tcs noted — at best, privatization means empty promises about guaranteed benefits to citizens become empty promises of debt repayment to the bond market. while citizens are ignorant and stupid, the bond market is often not. such a commitment to massive expansion of debt — $6.9 trillion for the ferrara plan by ssa’s estimates — may simply break confidence in the government.

    privatization (should such fantasy become law) may well surpass the “government debt constraint” limiter (ie, be the straw that broke the treasury bond and the dollar). this is the unspoken “black swan” risk bush’s plan runs — even if his veep thinks “deficits don’t matter”.

    All the money I’m paying into it is, therefore, wasted — it’s money I’ll never see again, not even at the shitty rates of return that the government has promised me.

    it is. and, if you’re an individualist without social scruple, that’s gotta kill ya.

    but someone in this country has got to realize that debt as a solution to all ills has limits — at least, before it becomes your albatross.

    true social security reform is to radically reduce payouts while maintaining or even raising payroll taxes. my favored solution is to phase out SS/medicare gradually, arithmetically reducing payouts over 40 years to zero, while maintaining/raising the payroll tax as needed to balance payments with tax receipts.

    in other words, we need to bail out the ill-considered plans of our parents before the situation gets any worse.

    but that is it’s own kind of fantasy, isn’t it? 🙂

    anyway, mr joe’s point is well taken — “if it isn’t social, it isn’t security”. for all the love of individualism i have, people are generally shitty investors who systemically underestimate their genius for underperforming treasuries. moreover, sending a flood of government funds to wall street will likely accomplish two things: 1) fleece millions out of billions in administrative fees that the current system does not pay; and 2) ensure that wall street becomes closely and onerously regulated as a response to 1).

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