How about a controversial thread?
02-06-2005, 07:27 PM
#952
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You obviously did not read the rest of the article (or listen to any other economists' opinion).
The deal that Reagan and Greenspan made with American workers was this: We'll raise your payroll taxes in exchange for a guarantee to pay your future Social Security benefits, backed by the trust funds.
That system has worked exactly as planned, but Bush's proposal would break Reagan and Greenspan's promise by draining the trust funds much more rapidly. Jason Furman of the Center on Budget and Policy Priorities calculates that interest on the trust funds would be needed by 2012, rather than 2018, to pay beneficiaries. The trust funds would likely be depleted entirely by 2031, rather than 2042.
Federal debt would explode.
To pay for the new accounts while continuing to provide currently promised benefits to individuals ages 55 and over would require enormous levels of new federal borrowing. An analysis by the Center on Budget and Policy Priorities of the president's plan shows that over the first 10 years the plan is in effect, new federal borrowing would amount to more than $1 trillion.
Over the following 10 years, an additional $3.5 trillion would be borrowed, bringing the total to $4.5 trillion over 20 years. That's substantially more than the shortfall currently forecast for Social Security over the next 75 years.
So, if you now claim that everybody should be happy because nothing really changes, please explain to me why it is a good thing to go further into debt for something that does not materially change the outcome for the vast majority of the people? Change for change's sake? Or to provide a windfall for an industry that contributed to his election fund, at the expense of society overall?
And as for the great returns you expect from your private account, let's consider the next paragraph from the same article:
The 2004 Economic Report of the President, examining a similar proposal put forward in 2001 by the President's Commission to Strengthen Social Security, concluded that national debt levels would be increased by an amount equal to 23.6 percent of Gross Domestic Product by 2036. That means that 31 years from now, the added debt burden for every man, woman and child would be more than $31,000. And not a cent of that borrowing would do anything to alleviate Social Security's long-term shortfall.
The new debt runs the risk of elevating interest rates and slowing the economy at a time when economic growth will be crucial to help cover the retirement of the baby boomers.
And this does not even take into account the additional pressures on the nation's finances from the continued military engagement in the middle east, the drug benefits costs or potentially making his tax cuts permanent. If you haven't already done so, I suggest you read the article in this week's Business Week commenting on W's budget proposal and what it achieves (or not). One thing it certainly doesn't is to half the deficit by 2009.
But that's an etirely different conversation.
The deal that Reagan and Greenspan made with American workers was this: We'll raise your payroll taxes in exchange for a guarantee to pay your future Social Security benefits, backed by the trust funds.
That system has worked exactly as planned, but Bush's proposal would break Reagan and Greenspan's promise by draining the trust funds much more rapidly. Jason Furman of the Center on Budget and Policy Priorities calculates that interest on the trust funds would be needed by 2012, rather than 2018, to pay beneficiaries. The trust funds would likely be depleted entirely by 2031, rather than 2042.
Federal debt would explode.
To pay for the new accounts while continuing to provide currently promised benefits to individuals ages 55 and over would require enormous levels of new federal borrowing. An analysis by the Center on Budget and Policy Priorities of the president's plan shows that over the first 10 years the plan is in effect, new federal borrowing would amount to more than $1 trillion.
Over the following 10 years, an additional $3.5 trillion would be borrowed, bringing the total to $4.5 trillion over 20 years. That's substantially more than the shortfall currently forecast for Social Security over the next 75 years.
So, if you now claim that everybody should be happy because nothing really changes, please explain to me why it is a good thing to go further into debt for something that does not materially change the outcome for the vast majority of the people? Change for change's sake? Or to provide a windfall for an industry that contributed to his election fund, at the expense of society overall?
And as for the great returns you expect from your private account, let's consider the next paragraph from the same article:
The 2004 Economic Report of the President, examining a similar proposal put forward in 2001 by the President's Commission to Strengthen Social Security, concluded that national debt levels would be increased by an amount equal to 23.6 percent of Gross Domestic Product by 2036. That means that 31 years from now, the added debt burden for every man, woman and child would be more than $31,000. And not a cent of that borrowing would do anything to alleviate Social Security's long-term shortfall.
The new debt runs the risk of elevating interest rates and slowing the economy at a time when economic growth will be crucial to help cover the retirement of the baby boomers.
And this does not even take into account the additional pressures on the nation's finances from the continued military engagement in the middle east, the drug benefits costs or potentially making his tax cuts permanent. If you haven't already done so, I suggest you read the article in this week's Business Week commenting on W's budget proposal and what it achieves (or not). One thing it certainly doesn't is to half the deficit by 2009.
But that's an etirely different conversation.
02-07-2005, 07:52 AM
#954
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Originally Posted by fltsfshr' date='Feb 6 2005, 06:12 AM
I just hears a rumor on TV that George Bush Sr was Deep Throat.
02-07-2005, 08:19 AM
#955
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Ulrich,
I scoured the web for Social Security reform information, and problems, and I guess I just am seeing this differently than you. First, as you well know, there is no "trust fund"--over the years surplus money goes to pay off the national debt, and if there is a shortfall, then money is borrowed to fund Social Security.
Everyone can agree that, even with the band-aid from Reagan, SS will not work in the future if left alone. The numbers of retirees continues to climb, just as those funding their benefits declines.
When SS was begun, the rate was 2% The current rate of 12% will need to be increased to 18% in order to adequately fund SS in the future. If you wonder what an 18% tax would do to our economy, look at some of our more "enlightened" European friends.
As for the transition, this is where I think you're right. We will feel a bit of pain as we wean ourselves off of the government teat, but for me it opens up a model of government that is more closely aligned with my view of personal responsibility and less government intervention.
Time will tell.
I scoured the web for Social Security reform information, and problems, and I guess I just am seeing this differently than you. First, as you well know, there is no "trust fund"--over the years surplus money goes to pay off the national debt, and if there is a shortfall, then money is borrowed to fund Social Security.
Everyone can agree that, even with the band-aid from Reagan, SS will not work in the future if left alone. The numbers of retirees continues to climb, just as those funding their benefits declines.
When SS was begun, the rate was 2% The current rate of 12% will need to be increased to 18% in order to adequately fund SS in the future. If you wonder what an 18% tax would do to our economy, look at some of our more "enlightened" European friends.
As for the transition, this is where I think you're right. We will feel a bit of pain as we wean ourselves off of the government teat, but for me it opens up a model of government that is more closely aligned with my view of personal responsibility and less government intervention.
Time will tell.
02-07-2005, 01:32 PM
#957
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I guess the Democrats are right after all...
John fund writes about FDR:
In a Jan. 17, 1935, address to Congress, Roosevelt, the originator of the federal retirement system, looked into the future and saw the need to move beyond the pay-as-you go financing and eventually establish "self-supporting annuity plans," noted Wall Street Journal columnist John Fund.
"For perhaps 30 years to come, funds will have to be provided by the states and the federal government to meet these pensions," Roosevelt told Congress.
But after that, he said, it would be necessary to move to "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age."
Roosevelt proposed that "the federal government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans."
Fund quoted a top Republican member of the Ways and Means Committee.
"What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts," he said. "By my reckoning, we are only about 40 years late in addressing his concerns on how [to] make Social Security solvent."
John fund writes about FDR:
In a Jan. 17, 1935, address to Congress, Roosevelt, the originator of the federal retirement system, looked into the future and saw the need to move beyond the pay-as-you go financing and eventually establish "self-supporting annuity plans," noted Wall Street Journal columnist John Fund.
"For perhaps 30 years to come, funds will have to be provided by the states and the federal government to meet these pensions," Roosevelt told Congress.
But after that, he said, it would be necessary to move to "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age."
Roosevelt proposed that "the federal government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans."
Fund quoted a top Republican member of the Ways and Means Committee.
"What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts," he said. "By my reckoning, we are only about 40 years late in addressing his concerns on how [to] make Social Security solvent."
02-07-2005, 03:26 PM
#958
Registered User
Okay, Ralper, I know I said that I was not going to make further comments.... but, I guess I lied. (It's like going past an accident and you know you shouldn't look, but you do.)
Tell me what you think about the 16th Amendment not being ratified.
Tell me what you think about the 16th Amendment not being ratified.
02-07-2005, 04:03 PM
#959
Thread Starter
[quote name='uppitychick' date='Feb 7 2005, 07:26 PM'] Okay, Ralper, I know I said that I was not going to make further comments.... but, I guess I lied.