[Printable PDF of this post HERE]
The White House and their deep-pocketed allies have launched a $35 million public relations effort to spread misinformation about President Bush’s Social Security Privatization scheme. This fact sheet will arm you with all the facts you’ll need to take them on.
FISCAL OUTLOOK
CLAIM: “By the year 2042, the entire system would be exhausted and bankrupt.” [President Bush, 2/2/05]
FACT: In 2042, enough new money will be coming in to pay between 73-80 percent of promised benefits. Even with this reduction, new retirees will still receive more money, in inflation-adjusted dollars, than today’s beneficiaries. [WP, 2/5/05]
CLAIM: “In the year 2018, for the first time ever, Social Security will pay out more in benefits than the government collects in payroll taxes.” [President Bush, 12/11/04]
FACT: “In 14 of the past 47 years, including 1975 to 1983, Social Security paid out more in benefits than the government collected in payroll.” [MSNBC, 1/14/05]
FACT: Under Bush’s plan, expenditures will begin to exceed revenues even earlier, in 2012. [New York Times, 2/4/05]
CLAIM: “Under the current system, today’s 30-year old worker will face a 27% benefit cut when he or she reaches normal retirement age.” [GOP Guide to Social Security Reform, 1/27/05]
FACT: According to the Congressional Budget Office, younger workers would receive better benefits from Social Security as it exists now, even if nothing changes, than from President Bush’s private accounts plan. [EPI, 2/05]
THE PRESIDENT’S PLAN / PRIVATE ACCOUNTS
CLAIM: “As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts.” [President Bush, 2/2/05]
FACT: Analysis of the plan so far does not prove the accounts would be a better deal for anyone not working on Wall Street. Workers who opt for the private accounts would recover forfeited benefits through their accounts only “if their investments realized a return equal to or greater than the 3 percent earned by Treasury bonds currently held by the Social Security system.” But CBO factors out stock market risks to assume a 3.3 percent rate of return. With 0.3 percent subtracted for expected administrative costs on the account, “the full amount in a worker’s account would be reduced dollar for dollar from his Social Security checks, for a net gain of zero.” [WP, 2/4/05]
CLAIM: “You’ll be able to pass along the money that accumulates in your personal account, if you wish, to your children or grandchildren.” [President Bush, 2/2/05]
FACT: Most lower-income workers will be required to purchase government lifetime annuities, financial instruments that provide a guaranteed monthly payment for life but that expire at death. Money in these annuities cannot be passed on to heirs. [NYT, 2/3/05]
CLAIM: “We must pass reforms that solve the financial problems of Social Security once and for all.” [President Bush, 2/2/05]
FACT: “A Bush aide, briefing reporters on the condition of anonymity [said] that the individual accounts would do nothing to solve the system’s long-term financial problems.” The long-term gap in revenue would “have to be closed through benefit cuts that have yet to be detailed.” [LAT, 2/3/05; WP, 2/5/05]
CLAIM: “A personal account would be your account, you would own it, and the government could never take it away.” [President Bush, 2/8/05]
FACT: Bush’s Social Security plan is a far cry from the private ownership he’s touting, however. For example, instead of private plans that let Americans control their own investments, there are tight restrictions on which conservative stocks and bonds the public will be allowed to buy. And, as the New York Times reports, “the more restrictions there are, the harder it would be for people to achieve the outsized returns the administration has generally promoted to sell the public on private accounts.” [NYT, 2/6/05]
CLAIM: “Best of all, the [private] accounts would be replacing the empty promises of government with the real assets of ownership.” [President Bush, 2/8/05]
FACT: Social Security trust funds “hold nothing but U.S. Treasury securities,” recognized as “the safest, most reliable investment worldwide.” [Century Foundation, 1/26/05]
CLAIM: “The problem that we now face is not one that we can tax our way out of, for a very simple reason: The costs and the current program are growing faster than the underlying tax base. So if we were to raise taxes today to deal with it, and the costs of the program continued to grow faster than the tax base, then in the future, future generations would simply have to come back and raise taxes again.” [Senior White House Official, Press Conference, 2/3/05]
FACT: An alternative proposal by Peter Diamond and Peter Orszag would resolve Social Security’s funding problems directly and permanently through modest tax increases. The Congressional Budget Office states that, “under Diamond-Orszag, the trust fund balance would always be positive and scheduled benefits would be fully financed.” [CBO, 12/22/04]
HISTORY
CLAIM: “Social Security was a great moral success of the 20th century, and we must honor its great purposes in this new century.” [President Bush, 2/2/05]
FACT: Conservatives have been trying to gut Social Security since its inception. Both Barry Goldwater and Ronald Reagan endorsed privatization in 1964. In 1983, the Cato Institute laid out a privatization plan similar to President Bush’s, stating, “We will meet the next financial crisis in Social Security with a private alternative ready in the wings.” [Miami Herald, 2/7/05]
RHETORIC
CLAIM: “I think it’s important for people to be open about the truth when it comes to Social Security.” [President Bush, 2/4/05]
FACT: The Bush administration has lobbied hard for privatization while being notably closemouthed about the details. [WP, 2/6/05]
FACT: The Wall Street Journal reports the White House is quietly assembling a coalition of deep-pocketed allies “that will privately raise $35 million for an advertising and lobbying effort to push the politically risky measure through Congress.” [WSJ, 2/4/05]
CLAIM: “The role of a President is to confront problems — not to pass them on to a future President, future Congress, or a future generation.” [President Bush, 2/4/05]
FACT: Dick Cheney admits trillions of dollars in future borrowing will be necessary to cover the cost of establishing private accounts. This deficit would have to be repaid by today’s younger workers. [NYT, 2/6/05]
Thanks for this…I can wait to pass this to a few people.
February 9th, 2005 at 9:01 pmThese are the kind of talking points we need- great stuff!
February 9th, 2005 at 9:58 pmThanks this is helpful and important. I wasn’t sure, however, how to get a printable version of this from your site. We need that. And, finally, let’s start emphasizing that communal nature of SS. This is something we do as a community for each other — a safety net. It is not now, was not at its inception, nor should it ever be a private or personal account. It’s only one part of a retirment plan that ought to include other, private, sources.
February 10th, 2005 at 2:00 pmagreed. please create a printable copy of this!
February 10th, 2005 at 2:14 pmIt is nice to see an intelligent response from jbradlyfuehrer. I am shocked to see someone with Fuehrer in their name supporting Bush.
February 10th, 2005 at 3:46 pmIt infuriates me that republicans persist in breaking social security and have done so since its inception.
February 10th, 2005 at 3:46 pmIt is the only thing that keeps a great majority of retirees from abject poverty and literal starvation.
“If you must” ?! Get a grip, people. If you don’t stop being AGAINST everything and start being FOR something, we’re doomed to repeat the last election over and over. Stop alienating conservatives by using the language of conflict. Being “right” will continue to not matter to the majority of Americans, because they won’t listen to us unless we treat them with respect. I’m a leftie - and I’m starting to get disgusted with the arrogant tone of the left myself. Those conservatives that we “must” talk to are our friends, family, and co-workers - let’s treat them with love and respect if we want the same back. Stop acting like every conservative is Bill O’Reilly or George Bush or some other obnoxious neocon - they aren’t. They are our brothers and sisters. Liberals should stand for unity and tolerance and practice what we preach - headlines like the one for this post demonstrate how we are NOT doing it.
February 10th, 2005 at 3:55 pmBlake, since you didn’t know this, the “must” in the title that you are disgusted with is a play on a book by the illustrious Ann Coulter entitled “How to Talk to a Liberal (If You Must).
February 10th, 2005 at 4:21 pmPlease include fact about the claim that there is a Social Security Trust fund that holds US Treasuries bonds.
February 10th, 2005 at 4:26 pmI must concur with Blake Beltram. Part of the conservative rights strategy is to alienate the middle right from the middle left. There was a time in American politics when it was normal to see republicans and democrats working together. As a voice of reason, we must find some way to reduce the bi-partisan nature of our government. The only way to effect true change is together. And frankly that is the last thing the conservative right wants. I also want to say that the information on this page is great, if possible could you provide links to when you got the info, I would like to read from your sources.
February 10th, 2005 at 4:27 pmYour wish is our command. Printable PDF now linked at top of page.
February 10th, 2005 at 4:53 pmI Want Private Accounts for my Children & Grandchildren. BUSH IS SMART
February 10th, 2005 at 5:16 pmThanks SO much for this kind of rational, researched information. I really appreciate it!
February 10th, 2005 at 5:39 pmShredding Social Security is just one part of a Conservative “grand scheme” to deconstruct the federal government, one program at a time. They’ve waited a long time to do this, and now, the only people who can stop them, really, are…the people — some of whom voted for all this nonsense back in November. We need to shout it from the mountaintops that we are a national community, that we all hang together or we all hang separately. The Republicans want us to hang separately. We need to show the Great Middle that we’re all better off when we stick together and support each other through effective, non-wasteful social programs — like Social Security.
After all, when you’re old and frail and can’t earn a living any more, all you’ve got in your pocket is all you’ve got in the world. Who wants to be destitute in their old age? Even red-staters will find it difficult to fault the collective funding of a monthly pittance for frail, defenseless elderly who have had their savings stolen by con artists, stock swindlers, deficit-driven inflation, and Bush’s fraudulent “Medicare reform”.
February 10th, 2005 at 5:57 pmIf people really think that private accounts are so wonderful than I suggest they read about the folks in Chile and Great Britain who did just that. The majority of them have lost 2/3’s of their retirement through bad advice, declining stocks, and broker fees. Those who stayed in the old system will realize their full benefits, those who tried the private accounts will have about zero to 1/3 the amount available compared to those who stayed in the old system. Great Britain has admitted that the private accounts don’t work and, surprize! surprize! are looking into the SSI system we have in place here. There are two simple ways to “save” Social Security. Roll back the tax breaks for the wealthy and raise the FICA cap to $120,000. Problem solved.
February 10th, 2005 at 6:12 pmThe White House plans for Social security will hurt middle class Republicans and Democrats. If this was not true they would not be working in secretly.
February 10th, 2005 at 7:10 pmThis Administration has always been short on facts. The Democrats in both the House & Senate no longer can afford to give in to this Administration for all there deception.
February 10th, 2005 at 7:24 pmI agree with Blake Beltram — you should get rid of the “if you must” from your title. Regardless of why you put it there, it is devisive and insulting. I thought you were trying to bring together the middle left and middle right…..
February 10th, 2005 at 8:00 pmSince 1983, members of the ‘baby boom’ generation have been paying increased payroll taxes to create a surplus in the SS trust fund to help mitigate the impact of our retirement surge on the system. The current administration is draining the trust fund to cover its monstrous deficit — a significant portion of which is the result of tax cuts that benefit the wealthiest (viz., those with income well above the payroll tax cap). Essentially, this administration is taking money that we have been contributing toward our own retirement through increased payroll taxes, and redistributing it to a wealthy few through tax cuts heavily skewed in their favor. In the business world, I believe the term for this is: EMBEZZLEMENT. This administration is robbing Peter and Paul (and me) to pay King George and his courtiers.
February 10th, 2005 at 8:02 pmRich, The trust fund money is spent by Bush’s government as soon as the Special Issue bonds are issued — which is the same as with regular Treasury bonds.
February 10th, 2005 at 8:49 pmWindolyn, the Trust Fund bonds can be traced a teh SSA website — http://www.socialsecurity.gov/ OACT/ ProgData/ transactions.html
Bush and the Neocoms are engaged in an effort no less ambitious than to dismantle the New Deal. First, force cuts in social programs by reducing revenues, then pick off New Deal programs one by one. The Bushies convinced the gullible about WMD by repeating the same lies over and over; now they’re doing the same in regard to the “crisis” in Social Security. Democrats need to think less about being right on this issue and more about being effective. Instead of simply trying to repudiate Bush’s nonsense, liberal advocacy groups and polititians need to admit that the SS program has room for improvement, come together on a reasonable plan to improve it, and then promote the “Democratic Plan” in every possible venue, over and over and over, only in this case it won’t be lies.
February 10th, 2005 at 9:12 pmYou mention 2042 as the time when the SS Trust Funds will be depleted, however the Congressional Budget Office puts the year at 2052. You should state that.
February 10th, 2005 at 9:59 pmSomeone please post a response to the statement: “There used to be 16 people paying in for every 1 person drawing benefits. That ratio has decreased and now there are only 3.”
February 10th, 2005 at 10:42 pmKKT…what’s your point about the change in ratio?
February 10th, 2005 at 11:30 pmI would really like a definition of SI certificates and SI Bonds that are currently in the trust fund. I am under the impression these are mostly “IOU’s” from current and past pilfering of the trust fund. I tend to agree with Bush there is a problem with the trust fund, but disagree to its cause.
February 10th, 2005 at 11:58 pmThe fact the current budget proposal incorporates 170 Billion dollars “Borrowed” from the Social Security Trust fund to prop up the 2006 budget and also does not have allowances in it for the wars in Iraq and Afghanistan, which in the past those costs have also been “Borrowed” from the Trust fund, leaves me to believe that the disaster for our Social Securtiy has less to do with managing the fund and more to do with what will happen when the Government cannot repay what they have “Borrowed” from the fund. I think both sides of the aisle are smokescreening the public as to what the crisis really is facing Social Security. The fact that the fund is basically nothing but government “IOU’s” instead of over 1.5 Trillion dollars in Government Bonds, and no one in the Government can explain how these “IOU’s” are going to be paid back.
what is this “WP” that is mentioned as the source for so many of the “facts”?
February 11th, 2005 at 12:36 amI see one pro scam comment here - “I want private accounts for my kids and grandkids. Bush is smart”. Honestly, I almost never hear a rational comment from the folks that worship Bush. It’s either an expletive about libruuuls or some empty phrase like “BUSH is smart”. Just sad that so many republicans either outright lie or gibber nonsense.
February 11th, 2005 at 1:56 amKKT - The decrease in the ratio of payees to beneficiaries was expected and is less of a problem than it appears on the suraface. There has been a dramatic rise in worker productivity from when Social Security was created in 1935. It now takes fewer workers’ payroll taxes to support each beneficiary. The aging population was addressed in 1983 by raising payroll taxes to prepare the system for the aging of the population. If the economy continues to grow at the rate of the past decade, Social Security would not need any changes. If growth slows, the system would need modest adjustments (eg, raise the cap on taxed income from $90,000 to $140,000 or cut scheduled benefits)
Keith K - The Treasury bonds in the trust fund are just as real as the bonds you or I could purchase and in which Bush has invested most of his wealth. The US Constitution specifically states that the Treasury bonds must be honored. Social Security has had a deficit in 11 years since 1970, and in each case it redeemed bonds from the trust fund. The problem now is the record general account deficit run up by Bush, not the trust fund surplus built in preparation for demographic change.
“In only 15 years, the government will have to start repaying its debt to Social Security. It will be able to do so. If need be, it will borrow, as it has borrowed for many purposes since 1776. The amount of borrowing, which could very gradually scale up to 1 or 2 percent of the country’s gross domestic product, will be far smaller than the present federal deficit, which is just under 4 percent of G.D.P.”
February 11th, 2005 at 2:42 am- NY Times Magazine, 1/17/05
I am 25 and finishing my MPA coursework. I work full-time as a bartender until the time I am able to find a position where my education will be appreciated. Why is it that I am able to realize that individuals who have personally saved towards retirement share more favorable lives after there work has ended while others are incapable of acknowledging this? With or without Bush’s plan people must realize that those who actually enjoy there retirement have worked towards it by saving and not by banking on their extra $600 a month. Anyone who wishes to keep their money in social security should be allowed to, but if and when I get the opportunity, I will happily find other ways of saving my retirement nest egg.
February 11th, 2005 at 2:55 amYou make a good point, Michael King, about people needing to take some responsibility for their own retirement support. However, the SS system was never intended to stop people from saving or providing for themselves. As you note yourself, the benefits are hardly luxurious. What makes SS so vital to our nation is that it protects those who HAVE worked hard all their lives from facing poverty and destitution no matter what. At 25 a citizen is naturally optimistic and may not be facing or thinking about all of the many circumstances that can occur to thwart your plan to work and save despite the best of intentions and preparation. No one has forgotten about individual responsiblilty - but at the same time we should never forget about our responsibility as a workforce to provide not only for ourselves but also for our less fortunate and yes, sometimes less prepared neighbors who also worked hard and paid into the system. Remember, SS benefits are supposed to be EARNED - you work and pay into the system, you get a guarantee of a minimum return. In these days of slashed corporate benefits, dwindling and pilfered pension funds, CEO and CFO dishonesty, and all the other hazards workers face more today than they have for the past 70 years - SS is even MORE vital to us than it was for our grandparents. Saving is much harder than it used to be, work is more scarce, education is vastly more expensive, we work longer hours for far fewer benefits, predatory credit practices are legal, and medical costs can quickly strip a lifetime of savings from the growing millions of uninsured. We are up against a whole lot of obtacles and active opposition. Let’s not make society’s senior members vulnerable to a disgraceful death in the street if we have the power to prevent it - and we do.
February 11th, 2005 at 4:24 amThank You Susan! What Mr. King seems to forget that millions of workers in theUSA do not have the luxiory of the time to wait for their talents to be appreciated. They must work to feed and house themselves and thier families. Time and money is not available for them to break out of their life status. Some do not have bank accounts. They take thier $200 paycheck and cash it any way they can and pay their rent, lights, foodand bus fare in cash. At 55 I have saved and invested, but not early enough or as much as I should have.I hope that SS will be the base for my retirement and that what money that has been saved and invested will allow me conforts. many will not.
February 11th, 2005 at 6:29 amI appreciate the many arguments made already that deal with the factual issues of Social Security. However, the Bush approach has nothing to do with facts, and everything to do with FEAR. We should have learned from the change in the reason for the Iraq invasion from “Hussein having WMD’s” to “Hussein is an Al Queda supportor” to “bringing democracy to Iraq makes us safer”, that the facts don’t matter in justifying an action, only the perception. As a consequence any argument against the Bush private savings plan needs to be based on getting people to recognize how dangerous the Bush plan is. Economists should be able to project what would have happened to a retiree’s Social Security income in 2003 (after the stock market crash) if the Bush plan had been fully operational 30 years earlier. How much would someone who was earning $50,000 prior to retirement have received under those conditions? I bet it’s a pretty small check when compared to the present benefit. The average citizen ought to be able to recognize the difference in the size of the benefit, which should scare them enough not to buy into it, in spite of the desire to “own” something.
February 11th, 2005 at 8:17 amThe problem with Social Security is much worse that portrayed. How can it be said that the Social Security Trust fund is solvent at all? The government has borrowed the entire fund and continues to take any excess monies, above what is directly needed to pay out current benefits, and replace it with “special” securities worth an equivalent amount. Therein lies the problem: In order for the securities to be redeemed, the taxpayer will have to come up with the money to do it. There’s no magic entity to pay back what Uncle Sam has spent. And we’re talking about an awful lot of money, something like 1.5 trillion dollars or more. But just when that “reserve” will be needed, the already over burdened taxpayer will have to be asked to spring for enough additional (huge) tax increase to redeem enough of the securities to keep the system going. And the further out you go, the worse it gets.
I suspect that the administration is motivated by this issue, however since it’s been a bi-partisan scheme over the years, no one wants to point fingers or take the blame. The bottom line is that the government needs to STOP using our retirement money to cover the budget! You just can’t borrow money from yourself, spent it, and assume that someone else will get it back for you. The net result is that the “Trustâ€? fund doesn’t exist! Isn’t anyone paying attention?
Richard Cron
February 11th, 2005 at 9:19 amClifton, Colorado
970-248-7632
I disagree with Blake about using the words, “if you must.” Generally speaking the conservatives use deceit, name calling and very strong derisive language. These quips tend to get repeated in the media which has a tendency to fog up the very issue that is being debated. They wish to debase the very origin of differing thoughts with this denigratory use of language, especially aimed at those who are in the middle who are trying to figure out the truth in the issues. For me, this retort was in very good taste and hits the right spot right on (as a response to Ann Coulter’s book title). We should never get into the lowest depths of the deceit, name calling and denigration used by the other to propagandize and cover for their lack of forthrightness, but at the same time we cannot be bowled over by their strategies to have Dems appear to be whimpering non-fighters. Sen. Reid seems to have a good sense of balance in this regard. After all, we are in a great battle, with the future of this country in the balance. Truth and zstrength will bring this party and America back on its feet.
February 11th, 2005 at 10:12 am2 points. Does anyone know how many people are being paid under the table, thereby reducing the number of people{legal or illegal} who are paying into SS. 13 million illegals ,paid at minimum wage should contribute {with employers contribution included} about 41/2 Billion dollars to SS.
2. How can Bush say that you would earn more if you had a private account. Think about this, most people by the time they retire have contributed enough to cover about 8 years of SS checks. If you live longer than that and many people are recieving SS for 20 years. So checks for even 12 years above your contributions would earn you far more that the scam private accounts would. What about survivors benefits?
February 11th, 2005 at 10:14 amFirst of all I agree that Bush’s plan to privatize SS is not the right direction.
#1- Would someone please tell me why Bush and the Republican party are trying so hard to push this plan. What are the benefits to them? Is there something behind this? Is this just based on an ideological belief that big governement is bad? If this is so clearly a bad plan then why are they pushing it?
#2- What is the Democrats alternate plan? Other than just disagreeing with Bush, what should be done?
February 11th, 2005 at 10:43 amThe whole claim that there is no crisis is ridiculous. You keep saying how there are treasury bonds in the “trust fund” but never talk about what has to happen for SSA to cash those bonds. Do you think the rest of government is going to cut spending? If they try to borrow that much money interest rates will skyrocket as will the costs of maintaining the national debt, so that’s out. All that is left is raising taxes, either FICA or income.
The average SS check is $960 a month. We are approaching 2 workers per retiree. That means the AVERAGE worker will be paying $480 EVERY month of EVERY year for 50 YEARS! That’s a crisis!
I realize a lot of the folks over 55 don’t really give a damn about saddling their kids with the equivalent of a high end Lexus car payment every month for the duration of their work lives. But those of us facing that crushing burden are very concerned.
February 11th, 2005 at 10:47 amBy the way, how is it “social and economic justice” to:
1. take money from 18 years, before they’ve had a chance to live life, and give it to 68 year olds who (a) have a higher standard of living and (b) have had 50 years to prepare
2. take money from black men and give it to rich white women
3. take 12.4 cents of every dollar the minimum wage worker earns such that it is impossible for them to save, buy a home, or build assets for their own children
4. create a state of dependency for seniors who become beholden to politicians for their income
5. take money from the unfortunate who die young and give it to the fortunate who are long lived
Why is it unjust to have people get out of retirement what they’ve put into retirement?
February 11th, 2005 at 11:04 amThe republicans have got to go!
February 11th, 2005 at 11:09 amI could not agree more strongly!!!
February 11th, 2005 at 11:32 amYou can read American Progress’s alternative plan here:
http://www.americanprogress.org/ site/ pp.asp?c=biJRJ8OVF&b=289151
There are several alternatives floating around out there: another is the Diamond-Orszag proposal which you can read about here:
http://jollybuddah.mydd.com/story/2004/12/31/181720/31
But repealing the tax cut for the top 1% of the wealthy should be priority number 1 in facing the country’s budget shortfalls in *any* program.
February 11th, 2005 at 11:35 amStop complaining about “if you must.” Like it or not, we are ALL in a cultural, humanistic, war. It is a war of progressive (libs, moderates, etc.) good vs right wing conservative evil. We did not choose this war, it was chosen for us. The left, center-left, and center right disagree at times but we must all unite to permanently vanquish conservatives once and for all and return them to 4th party status. Conservatives are destroying our country, economy, and constitution. Either you recognize your enemy (the 20-25% of Americans who r RW) and fight your enemy or you lose everything America stands for.
February 11th, 2005 at 12:09 pmLiberals have a rather strange concept of money and debt. If I borrow $100 from a bank, and they expect the money to be paid in 5 years, and I am unable to pay it, I will likely declare bankruptcy. Are you people so foolish to believe that a system you acknowledge can’t even pay benefits, is worth keeping. Social Security should be able to promise 100% of benefits, not 75% or 80%. When you cannot keep your finanicial promises, that it is bankrupcy. The President wants all Americans to own their retirement, not liberal or conservative spendthrift politicians. That is a far better solution than turning the system into a welfare program where the wealthy pay more than they receive (by the way, they already do). Think outside the prospects of tax increases for once. Please, I would like an open discussion of dynamic ideas between the two parties. Why is it that libertarians and conservatives are pushing innovative reforms such as personal accounts, Health Savings Accounts, and fundemental tax reform. All the left offers are proposals for tax increases and class warfare. Please become the part of ideals and innovation again. I am tired of getting so drunk every election night watching conservatives beat the hell out of flacid pantywaste liberals. No one likes a blowout. It has been a decade. Come on. Will it take eight years of another Bush in the White House to whip you losers into shape!
February 11th, 2005 at 12:42 pmThis is good information no matter who you are talking to! I have a few more comments. Remember that SS benefits are guaranteed,unlike private accounts or any one’s investiment portfolio.
February 11th, 2005 at 12:48 pmSS is also one of the most efficient programs out there, distributing benefits at about the cost of 3 cents for every dollar distributed. By law the trust fund is separate from our goverment’s budget and according to OMB can continue to pay full benefits until 2052, a few adjustments can keep the program going beyond that date. Today’s eighteen year olds will be collecting by then. SS also covers benes for the disabled and families who have lost their major breadwinner.
As someone said it was never meant to be a retirement account but a way to protect older Americans from dying in complete poverty as they did prior to the program. It is not our money really. If you have the extra money to invest on your own go for it…no one is stopping you. I think any attempt by the goverment to create so called private accounts to ’save’ SS will cost us more money in the long run and cut benefits for those that need them. It will hurt all generations to come.
Here is what Cato thinks:
The 6.2 Percent Solution: A Plan for Reforming Social Security
by Michael Tanner
Michael Tanner is director of the Cato Institute’s Project on Social Security Choice and editor of Social Security and Its Discontents: Perspectives on Choice (forthcoming).
Executive Summary
For the past several years there has been a growing consensus about the need to reform Social Security. Now, however, the debate has advanced to the point where it becomes important to move beyond generalities and provide specific proposals for transforming Social Security to a system of individual accounts. The Cato Project on Social Security Choice, therefore, has developed a proposal to give workers ownership of and control over their retirement funds.
Under this proposal:
Individuals would be allowed to divert their half (6.2 percentage points) of the payroll tax to individually owned, privately invested accounts. Those who chose to do so would agree to forgo all future accrual of retirement benefits under the traditional Social Security system.
The remaining 6.2 percentage points of payroll taxes would be used to pay transition costs and to fund disability and survivors’ benefits.
Workers who chose the individual account option would receive a “recognition bond” based on the accrued value of their lifetimeto- date benefits. Those bonds, redeemable at the worker’s retirement, would be fully tradable in secondary markets.
Those who wished to remain in the traditional Social Security system would be free to do so, accepting a level of benefits payable with the current level of revenue.
We expect this plan to restore Social Security to long-term and sustainable solvency and to do so at a cost that is less than the cost of simply propping up the existing program. And it would do far more than that.
Younger workers who chose the individual account option would receive benefits substantially higher than those that could be paid under traditional Social Security. At the same time, the plan would treat women and minorities more fairly and allow low-income workers to accumulate real wealth.
Most important, this proposal would reduce Americans’ reliance on government and give individuals greater ownership of wealth, as well as responsibility for and control over their own lives. It would be a profound and significant increase in individual liberty.
February 11th, 2005 at 12:49 pmFools! Social Security benefits are not guaranteed. The Supreme Court, on two separate occasions (see: Flemming v. Nestor, 1962). The court said that Social Security is a tax, not an entitlement. Politicians can cuts benefits at any time. Remember people, they already have. The government does not think that it is your money. It is. It should be. If the President suceeds, it will always be yours.
February 11th, 2005 at 12:53 pmPeople, look at all the Democrats who currently support the Presidents plan. The strange fact is that if President Clinton pushed this proposal during the waning years of his term, he would have suceeded. Senators Moynihan, Robb, Kerrey, and Breux all supported the establishment of personal accounts. If they were in the Senate now, the prospects for change would be much brighter. We have over $20 trillion in long-term financial obligations, let us at least address Social Security. To conclude on a callous note, I look forward to another drunken 2006. 60 votes in the Senate, 240 in the House. Medicare is next.
February 11th, 2005 at 12:58 pmSober Security: Personal Retirement Accounts are Pro-Black, Too
by Deroy Murdock
Deroy Murdock is an advisory board member of the Cato Institute’s Project on Social Security Choice.
How raw a deal is Social Security for black Americans? Citing research by Harvard professor and former Clinton Administration official Jeffrey Liebman, President Bush’s Commission to Strengthen Social Security concluded last August that blacks “receive nearly $21,000 less on a lifetime basis from Social Security’s retirement program than whites with similar income and marital status.”
Largely due to differences in life expectancy, Social Security essentially pumps money from the pockets of blacks into those of whites. Having survived childhood diseases and youth violence, 25-year- old black men starting work in 1999 could expect to live to 70.2 years versus 75.9 for white males, the National Center for Health Statistics reports. Black women could expect to reach 76.4 years compared to 80.8 for white females.
These were among the sobering facts discussed at a recent conference on black Americans and Social Security at the libertarian Cato Institute in Washington. Key socio-economic distinctions between average black and white Americans explain why Congress urgently should adopt President Bush’s plan for personal retirement accounts. Such a reform would promote the general welfare and dramatically advance the financial prospects for black Americans in particular.
Despite the civil rights establishment’s fealty to Social Security, rank-and-file blacks support privatization. A February 2001 Zogby survey for Cato revealed that 53.5% of blacks favor personal accounts. President Bush should rally black Americans as his secret weapon once this battle is joined.
He also would be wise to stump with Herman Cain. The chairman of Godfather’s Pizza is a prominent black business executive and one of Social Security modernization’s most persuasive and entertaining advocates. Cain says that at age 56, he already has paid $161,000 into Social Security. In the next 10 years, he expects to add another $74,000 to the system. “If that’s going to be a transfer from me to white people,” Herman Cain wonders, “can’t I at least give it to white people I like?”
This article originally appeared on Nationalreview.com on May 14, 2002.
February 11th, 2005 at 1:00 pmBriefing Paper No. 61 February 5, 2001
Disparate Impact: Social Security and African Americans
Executive Summary
by Michael Tanner
Michael Tanner is director of the Cato Institute Project on Social Security.
Perhaps no group has as much at stake in the debate over Social Security reform as do African Americans. Elderly African Americans are much more likely than their white counterparts to be dependent on Social Security benefits for most or all of their retirement income, yet the current system often works to their disadvantage.
Despite a progressive benefit structure, Social Security benefits are inadequate to provide for the retirement needs of the elderly poor, leaving nearly 30 percent of African-American seniors in poverty. Moreover, because African Americans generally have shorter life expectancies than do whites, they receive less total Social Security payments over the course of their lifetimes.
Social Security also contributes to the growing wealth gap between blacks and whites. Because Social Security taxes squeeze out other forms of saving and investment, especially for low-income workers, many African Americans are unable to accumulate real wealth. And, since Social Security benefits are not inheritable, that wealth inequity is compounded from generation to generation.
Traditional Social Security reforms such as raising the retirement age, cutting benefits, or increasing taxes would only make the problem worse. On the other hand, African Americans would be among those with the most to gain from the privatization of Social Securityâ€â€transforming the program into a system of individually owned, privately invested accounts.
February 11th, 2005 at 1:00 pmMarch 28, 2003
Senator Moynihan’s Last Legacy
by Michael Tanner
Michael Tanner is director of health and welfare studies at the Cato Institute.
With the fighting in Iraq winding down, President Bush and Congress are returning to domestic concerns. They would be well advised to put Social Security reform at the top of their agenda.
Last month, Social Security’s trustees released their annual report on the system’s finances. Since it fell in the middle of the Iraq war, it was overlooked by most of the media and public. But it confirmed that the national retirement program is facing a financial crisis that demands immediate attention.
According to the trustees, Social Security will start to run a deficit — spending more money on benefits than it takes in through taxes — in just 15 years, by 2018. The so-called Social Security trust fund, which is supposed to help pay benefits until 2042, in reality contains only government bonds, essentially an IOU. While few observers doubt that those benefits will be paid, the federal government will still have to find the money to pay them.
And a lot of money it is. In 2018, the first year that Social Security faces a shortfall, the cash deficit will exceed $17 billion. That’s as large as the budgets for Head Start and the WIC nutrition programs combined. By 2022, the annual Social Security deficit will have grown to roughly $100 billion, as large as the combined budgets for the Departments of Education, Interior, Commerce, and the Environmental Protection Agency. By 2027, with the annual deficit approaching $200 billion, you can add in the NASA and the Department of Veterans Affairs. And so it goes. Overall, Social Security now faces unfunded liabilities in excess of $6.4 trillion, that’s an increase of more than $1.37 trillion since last year.
Not that this is the only problem with Social Security. The program already provides today’s workers with a low, below-market return on the taxes that pay for Social Security. The program unfairly penalizes African-Americans, working women and others. Workers don’t own their money or have any guaranteed right to their benefits. In short, it is a program crying out for reform.
The president and at least some in Congress understand this, and they understand the limited options for reform available. It was former president Bill Clinton who laid out the possibilities: raise taxes, cut benefits, or try to earn a higher rate of return through private investment. The tax increases would be huge, a 50 percent increase in the payroll tax or the equivalent. The second alternative, a 25 percent or more cut in benefits, would fall hardest on the elderly and those in need.
Fortunately, President Bush is committed to the third alternative. He would allow younger workers to privately invest a portion of their Social Security taxes through individual accounts.
We have just come out of a war, and there are many issues fighting for congressional attention. The war’s aftermath and the fight against terrorism will remain our top priorities. The sputtering economy needs a boost, and the president will continue to push for tax cuts. Congress is trying to find a way to add prescription drugs to a Medicare program that is already hemorrhaging money. That’s a full plate for anyone.
But Social Security reform cannot be allowed to languish. Every two-year election cycle that we delay adds an additional $320 billion to the cost of reform. No one pretends it will be easy, but we have seen that President Bush is not easily deterred. If he is prepared to bring his resolution and determination to Social Security reform, he will, once more, be able to drag along a reluctant Congress. That will be another victory for the American people. In the long run, maybe even a bigger victory than the one in Iraq.
February 11th, 2005 at 1:01 pmSSP No. 33 February 24, 2004
Social Security Choices for the 21st-Century Woman
by Leanne Abdnor
Leanne Abdnor, former vice president for external affairs at the Cato Institute, is president of For Our Grandchildren, a grassroots advocacy organization that supports Social Security reform. She was a member of the President’s Commission to Strengthen Social Security.
Executive Summary
Since 1935 millions of elderly Americans have relied on Social Security for their retirement income. However, the program is now both structurally and financially unable to meet the needs of today’s workers, especially women.
Although there has been much public attention paid to Social Security’s looming financial crisis, even more important to women may be the clash between the current benefit structure and the socioeconomic changes that have occurred since 1935, such as the great increase in the number of women in the workforce, women marrying later or not at all, and the doubling of the divorce rate. By failing to keep pace with the changing nature of American families, Social Security’s outdated benefit structure results in single women and dual-earner couples subsidizing the benefits of wealthier single-earner couples, which creates a sharply regressive element to the current benefit structure.
Social Security reform not only must restore the system to solvency, it should also address the program’s other inequities that disadvantage women. The best way to do this would be to allow younger workers, including younger women, to privately invest at least a portion of their Social Security taxes through individual accounts. Not only would individual accounts help to solve Social Security’s financial problems by taking advantage of the higher returns available to private capital investment, they would give women greater ownership and control of their retirement income and create a benefit structure far more in tune with the needs of the modern family.
Everyone who truly favors giving women more choices and control over their own lives should champion such a reform.
February 11th, 2005 at 1:02 pmGot it…Good. Do not take down my postings, or I shall become more powerfull than you can possibly imagine.
February 11th, 2005 at 1:03 pmFrequently Asked Questions:
1. Isn’t SS an insurance policy? Isn’t it unfair to compare it to retirement programs?
Ans: While SS was originally devised as an insurance program for mostly elderly workers whose finances had been decimated by the Great Depression, SS has grown over the years to be virtually unanimously expected and treated as a retirement savings plan. It is no longer insurance because (a) insurance is used to cover the expense of unforeseeable events and (b) insurance only pays to people with a valid claim while SS pays everyone (who paid “premiums�). Many folks would like to create means test such that SS would become more of an insurance program but it is very unlikely that means testing is politically viable.
2. Isn’t SS okay because it has the trust fund?
Ans: No, the trust fund is composed entirely of US government bonds. The SS surplus has long been stolen and spent by both parties for decades for other government spending. In order for SS to redeem the bonds in the trust fund the federal government will either have to raise taxes, borrow money, or slash SS benefits: exactly the same options available without a “trust fund�.
3. Wasn’t the system design to have 3 workers per retiree?
So if the average SS check is $960 a month then the system was “designed� for the average worker to pay $320 a month, every month for the duration of their work lives?
So 50 years times 12 months times $320 is $192,000 (assuming no growth whatsoever). If I had that in a personal account I could draw 5% for retirement income in perpetuity or about $800 a month plus I would have the $192K at my death to give my children and charities.
With SS, however, IF I’m lucky to live that long I might draw 10 years of benefits on average or 10*12*$960 = $115,200. I lose $76,800.
Now let’s see if my contributions are invested and allowed to compound.
$320 x 12 months x 464 = $1,781,760. If I draw 5% of that for retirement income I get $7,424 a month!
The 464 is the factor that 7 percent growth compounded over 50 years produces. See http://www.moneychimp.com/ calculator/ compound_interest_calculator.htm.
4. There are 3 workers per retiree now so what’s the big deal about having one few worker per retiree in twenty years?
Ans: This represents a 50% increase in FICA taxes! Instead of three people paying $320 a month to provide the average $960 SS check to day, each of two people will have to pay $480. Often the two workers will be man and wife. This amounts to saddling our working families with the equivalent of an extra mortgage payment every month for the duration of their work lives. Instead of 12.4 cents of every dollar earned going to SS it will be more like 18 cents. This neglects the fact that Medicare and other government is expected to rise substantially during the same period of time and the SS surplus will no longer exist for the politicians to spend on other obligations.
5. Isn’t SS privatization really just about greedy rich people not wanting to “share� with the poor?
Ans: Absolutely not. Most reform advocates object to SS because is financially and morally bankrupt. Many of the staunchest advocates admit to being willing to forego participation in the new plan in exchange for getting it passed because they know private accounts will lead to greater wealth creation among the lower income which will increase income tax revenues, supply capitol for expansion and growth of the economy, and reduce dependence on government services.
6. I’m retired or retiring soon, want SS reform reduce my benefit?
Ans: Absolutely no one anywhere is suggesting changing SS for people over about age 55.
7. Won’t private accounts leave people stranded if there is a downturn in the stock market near their retirement?
Ans: No, first, no one would ever advise a person to be heavily invested in individual stocks when they are close to retirement. All responsible financial advisors say to move money towards bonds the closer one is to retirement. Second, as the analysis sections show the growth in private accounts is so much greater than what SS provides that an individual could suffer a 50% decline in the stock market the day before he retires and still have substantially higher income than SS provides. Third, all reform plans have some form of guaranteed benefit for the elderly poor. This will exist as some form of welfare program similar to what is provided to families with dependent children now.
8. Won’t a transition to private accounts cost at least $2 trillion? Where will this money come from?
Ans: Yes and no. The current SS program has about $150 billion surplus per year that is currently being siphoned off and spent by politicians. Most reformers want to take that surplus and give it individuals to build personal accounts. Since technically, the government has no right spending the surplus, transitioning to private accounts would cost nothing. Practically, however, the political reality is other government spending would have to be cut by $150 billion or taxes and borrowing would have to be increased. According to the CBO, the federal outlays increased by about $140 billion between 2002 and 2003. In other words, a single years growth in the federal budget is sufficient to pay for the privatization plan.
9. But doesn’t my employer pay half of my FICA tax?
Ans: Technically, yes, but as we all know if your employer did not match you FICA contribution the free market would demand that he raise your wage by the same amount. There is no free lunch. If there were, we would just require the employer to pay all the FICA and get SS for “free�.
10. Doesn’t SS also provide survivor’s benefits and disability insurance?
Ans: Yes, but it is a terrible vehicle for providing these objects. Regarding survivor’s benefits, most people without minor dependents don’t need it. Most people with minor children are young enough to get a $250K life insurance policy for about $25 a month. This is a tiny fraction of the $320 a month the average worker pays in FICA. Plus with a real life insurance policy instead of just a few years of SS survivor’s benefits your kids will inherent the large lump sum and have real money to pay for college and start out in life.
Regarding disability insurance, if private disability insurance fraud is any indication the current SS disability programs have widespread abuse and fraud. The government is unable to properly police this program. At any rate, disability does not belong in a retirement program and vice versa. Disability should be funded and administered separately.
11. How can people who make minimum wage afford to save in a private retirement account?
Ans: They already are! 12.4 cents of every dollar the minimum wage worker earns is being confiscated as SS tax. Mostly it is dispensed to people who have far higher standards of living then they do. A full time minimum wage earner pays $1277 a year in SS tax. If this money were invested at 7% compounding for 50 years they would have a nest egg of $593,000 at retirement. At even 3% they would have $154,000 at retirement with about $7000 a year (70% of their pre-retirement income and approximately the same that SS provides) in income forever and a large sum of money to leave there children who would then have money to buy a home or use to save for their own retirement.
February 11th, 2005 at 1:05 pmNow I know how Galileo must have felt. The facts are the facts yet in these times, there is glaring evidence that there exists a type of citizen who is politically, emotionally, socially and intellectually devoid. Thank you.
February 11th, 2005 at 1:48 pmI love it! If you’re going to quote the Cato Institute, why not also quote the Heritage Foundation? They’re both tools of the Neoconservative movement and have the same reespect for the truth as the Bush administration, i.e., zero!
February 11th, 2005 at 2:01 pm//I Want Private Accounts for my Children & Grandchildren. BUSH IS SMART
Comment by Tracy  February 10th, 2005 @ 5:16 pm//
I think it’s wonderful that you want private accounts for your grandchildren, and I strongly encourage you to set them up for them.
I would also highly recommend that you purchase modest whole life insurance policies, with options to add addition insurance later on, as well. The purchase of decent, permanent insurance policies is a wonderful way for Grandparents to offer their grandchildren a bit of a legacy, and, given the fact that one can purchase these policies so cheaply for very young and healthy children, it really makes no sense to NOT do so.
You can, if you choose, purchase a form of permanent insurance that would offer a variable account that either you or eventually your grandchildren could put money into. Check with a licensed agent for details on these types of policy options.
However, what you must realize, that seems to be getting lost in this discussion from both sides, is that social security is not, and was never intended to be an investment vehicle. It is a testament to the dishonesty of the Bush adminstration and the neocon movement in general that so many people have been convinced that they aren’t getting a “fair return” for their investment on Social Security.
Social Security is merely an insurance policy to safeguard ourselves and our fellow citizens against abject poverty. It’s not a retirement plan. It’s a safety net.
Nothing and nobody is stopping you or anybody else from establishing private accounts for your grandchildren. By all means, do so as soon as possible. However, let’s inject some honesty into the discussion on Social Security, shall we? Let’s not compare Social Security with a 401K or a pension plan, because it’s simply not that at all.
It’s also something that we should be very, very proud of. It is the most successful program of its kind ever instituted in any country during any time in history. It has been remarkably successful at lifting people out of poverty, providing critical needs to the most needy, helping families with difficult situations rise up, and helping to educate our youth. As government programs go, it simply doesn’t get any better.
The system is not broken, nor is it in danger of being bankrupt at any time soon, and quite possibly, at no time ever. Let’s not forget that the projection that foresees a future depletement of reserves also makes that projection on the assumption that the economy will never post economic growth larger than 1.8%. I suspect that even a Bush could muster more growth than that over multiple years.
Let’s just call this attack on social security what it really is. A group of neocons who’ve been salivating for the opportunity to kill this FDR program ever since its inception. They’re about to let a little thing like facts stand in the way of their golden opportunity, and all they’ve got to do is convince enough people that they’re right, even though they’re not.
This is being sold much like the illegal war in Iraq was….simply lie outrageously, and repeat that lie over and over and over and over again until there is a critical mass point reached, at which time they feel they can successfully move to kill the program altogether.
Let’s not kid ourselves….this really is a plan to kill social security, not save it. Even Bush himself admits that his plan won’t solve the potential fiscal issues with the program, and Cheney finally admitted the other day that it will cost “several trillion dollars” to institute their plan. Need you be reminded that we don’t have “several trillion dollars” with which we can play this game at this time, thanks to some rather irresponsible mismanagement of our national treasury over the past four years?
Given that the system is NOT currently broken, nor is it likely to be at any time in the near future, and given the fact that Bush’s plan will NOT strengthen it (by their own admission), and that it will cost several trillion dollars to impliment (also by their own admission), I would offer that a far more sensible solution to any potential future shortfalls would be to simply raise the income cap on the tax to $120,000, instead of $90,000.
That way, SS will remain solvent forever, barring anything unforeseen, and you will still have the option to suppliment that system by investing in your own private accounts as you see fit.
Btw, for those of you who may have been deluded into buying into the “personal account,” or “personal ownership” lines touted by the right, be aware that you will NOT have full access to these funds, nor will you be able to choose any company that you wish to invest in. You will be given a list of “Government approved” companies that you can choose to invest in. Some ownership society, huh?
Also, in order to take part in this program, you’ll have to agree to forfeit a large portion of your guaranteed SS amount in future years. That done, there are so many fees (read: TAX INCREASE) built into the plan that IF you were fortunate enough to have fostered growth in your “personal account” beyond 3.3%, you will have to relinquish this amount to your friendly neighborhood federal government. My, how quaint and “ownership-like.”
IF you manage to grow the account beyond that magical 3.3% mark, and you’ve paid your rightful dues to your benovolent, wonderful, fully deserving federal government, you will end up with what you would have ended up with, had Bush and the neocons left the system alone. Except that you, your kids, your grandkids, and their kids will all be stuck with the bill of several trillions dollars that it took to get you to exactly where you would’ve been had they just left it alone.
What if you DON’T manage to earn at least 3.3% in this “private account?” Too bad. You’ve already forfeited your guaranteed SS benefits, remember? Oh, and btw, EVERYBODY will now get less under this plan whether they choose to have a private account or not, because Bush is going to have to lower the guaranteed benefit amount as well. Sweet dreams.
See, this is the crux of rightwing economics. It’s all a big shell game. They TELL you that you’re going to “take ownership,” and that they want “smaller government,” and that you deserve to “keep your own money,” but then they turn around and hand SO much money to their uber wealthy friends that you’re forced to face higher interest rates, higher state, county, and municipal taxes, and far less services in order to subsidize this upper 5% of the nation.
Smaller government? Hardly. Bush has massively expanded the size of the federal government. Since 2000, our government has grown by 30%, after Clinton shrank it to 1950’s levels.
Personal ownership and accountability? Hardly. You won’t get to choose any companies to invest in other than what your nanny government TELLS you to.
Lower taxes? Not on your life. Unless you’re in that upper crust of 5%, earning more than $250k per year, you simply have no viable reason to be voting republican, because the rest of the 95% pay dearly for their errant, failed economic policies, through higher “fees” (read: TAXES), higher state, county, and municipal taxes, lesser services, higher crime, a lesser educated society, fewer jobs, degradation of infrastructure, etc., etc., etc.
All of the public commons that republicans have such a violent aversion to are precisely what the uber wealthy have used to create their uber wealth, yet they don’t feel as though they should have to pay for the use of it. That cost should be shouldered by the middle and poor classes, not the aristocrats.
All you red staters, I hope you’re prepared for this new budget, because it’s coming at you like a steamroller. Don’t say we didn’t warn you. We’ve been trying to tell you since Redink Ronnie that neoconomics don’t work for anyone but the uber wealthy, and at the expense of all others, but you refused to listen. You chose instead to listen to play the rightwing shell game. Fasten your seatbelts, kids. Things are about to get a tad rough in Bubbaland.
This SS plan is a horrible idea that is simply unnecessary, and it’s being sold to you red staters on deception and lies. Don’t buy it for a second. Go do some research for yourself and see. Don’t listen to what these rightwingnuts on TV and the radio are saying, because they only want to destroy the system, and they’ll say ANYTHING to get that done. Go read up on this yourselves and make your own conclusions.
February 11th, 2005 at 2:38 pm1. SS will never run out of money unless we suffer a nuclear 1st strike. We are approximately as rich as god at the present time, and per capita income doubles every generation or so. Can’t happen, so relax.
2. Assets in the SS trust fund are indeed “just IOUs”; they are Treasury securities, backed by the full faith & credit of the US govt.; the probability of default is as close to zero as no matter. Anyone that believes otherwise should contact me and I will be happy to take any spare T-bills / notes / bonds that you might have cluttering up the house. Glad to help.
3. WRT 2. above: read the text of the 14th Amendment. Is shrub as dumb as he sounds, or is he just a traitor that plans to violate his sacred oath of office requiring him to defend the Constitution from ALL enemies, both foreign and republican? There are no other alternatives.
February 11th, 2005 at 4:04 pmKKT:
Especially the “16″ workers used to pay in for each beneficiary is an example of scare tactics. The year quoted for that figure is 1950–ONLY 15 YEARS after Social Security came into existence, and hence few were eligible! Also, 1950 saw important amendments to SS.
Also, the 2:1 ratio is supposed to refer to the time when todays young workers will retire, not an imminent situation.
The dramatic sequence 16:1–>3:1–>2:1 is a misleading rhetorical exaggeration of the urgency of the problem.
February 11th, 2005 at 4:14 pmI cannot imagine the poverty that would ensue the rollback Bush is proposing. As it is, Social Security is the air in the lifeboat for millions of our seniors, disabled, widows and widowers and surviving children. I wonder what it is exactly that Bush sees as so objectionable in the current plan? It cannot be its efficiency or effectiveness. It must be that he objects to the idea tha government can do good for people.
February 11th, 2005 at 4:21 pm//I wonder what it is exactly that Bush sees as so objectionable in the current plan?//
Not to be completely cynical and narrow, but I seriously believe that these neocons are just dead set on destroying any and every program ever supported by or created by a democrat, because, at the core, they are determined to flat out destroy the democratic party altogether and end the two party democratic system in America.
If you examine their policies, the things that they support and oppose, the countries that they support and oppose, etc., the only real consistency that exists is that everything that they do seems to be for the cause of undermining democracy somewhere, either here or abroad, in order to facilitate and ingratiate corporatism/fascism.
It’s unfathomable to them that the masses would be good for any purpose other than to serve the corporate masters, much as the serfs lived only to serve their lords in feudal times. This is a modern-day feudalism.
Read some of Thom Hartmann’s brilliant articles and books on the subject. He’s certainly cornered more information on this than anyone else, and brings his arguments forth with great clarity and intelligent thought.
I can’t help but wonder what they intend to do with the dead, rotting bodies that will begin to pile in the streets after they’ve pulled away these safety nets, but then again, I suppose that’s where the constitutionally shaky “faith based” programs come in. What better way to recruit new minds to brainwash towards your new theocratic fascism than to first make them destitute and desperate, and then force them into your religious institutions for indoctrination and “loyalty programming.”
Scary stuff lies ahead here. We’re clearly treading into Christio-fascist/American taliban territory that bears no semblence to our former democracy whatsoever.
What really disturbs me is how much the former conservatives have lost in allowing themselves to blindly follow this corrupt, morally bankrupt administration and political party. They used to actually stand for some pretty good ideals, and whether you believed in all of them or not, the one thing that you could say about them was that they were principled. That is sadly no longer the case. They have sold their souls for absolute power, and in doing so, they’ve also sold out their nation, their democracy, their national treasury, their jobs, their integrity, their values, their ethics, their religion, and humankind in general.
Imagine Mr. Christ coming back to visit today and seeing what the republican (you know, the “Christian party”) is supporting these days. Endless war without cause, all-out class warfare to massively shift all wealth to the already wealthy at the expense of all others, lying, cheating, stealing, torturing, abusing, raping, drug abuse, gambling, womanizing, divorce, murder, etc., etc., etc. These are all things that today’s republicans are forced to support in order to provide cover for their ethically challenged, morally bankrupt party.
Jesus wept.
February 11th, 2005 at 5:01 pmSocial Security is merely an insurance policy to safeguard ourselves and our fellow citizens against abject poverty. It’s not a retirement plan. It’s a safety net.
Comment by Jeff  February 11th, 2005 @ 2:38 pm
So why are benefits given to everybody? If SS only paid out to the 20% or so of retirees that would be below the poverty line without it, there’d be no problem.
February 11th, 2005 at 5:29 pmThe dramatic sequence 16:1–>3:1–>2:1 is a misleading rhetorical exaggeration of the urgency of the problem.
Comment by Mischa  February 11th, 2005 @ 4:14 pm
Its a rip off at 3:1! Let alone 2:1. So is it social justice that some people have to pay 2 and 4 times as much as other people for the same benefit because of the demographics when they were born. Baby boomers got to share the load with lots of other workers. Its those of us coming after that are getting crushed.
February 11th, 2005 at 5:36 pmI cannot imagine the poverty that would ensue the rollback Bush is proposing. As it is, Social Security is the air in the lifeboat for millions of our seniors, disabled, widows and widowers and surviving children. I wonder what it is exactly that Bush sees as so objectionable in the current plan? It cannot be its efficiency or effectiveness. It must be that he objects to the idea tha government can do good for people.
Comment by Mark T  February 11th, 2005 @ 4:21 pm
Can you point me to anything, anywhere that states Bush or SS reformers are talking about survivor benefits or disability? How many times do we have to say it?:
SS will not change for those over 55.
Reform is aimed only at the retirement portion of SS.
Quit trying to fear monger the elderly poor and disabled!
This is about whether 18 year olds should be allowed to let the 50 years between when they start working and when they retire work for them or whether they should be forced to make up the 50 years of growth and inflation today’s retirees would have gotten had they invested their fica tax. Period.
February 11th, 2005 at 5:42 pmIt’s unfathomable to them that the masses would be good for any purpose other than to serve the corporate masters, much as the serfs lived only to serve their lords in feudal times. This is a modern-day feudalism.
Comment by Jeff  February 11th, 2005 @ 5:01 pm
Its, apparently, unfathomable to you that I wasn’t put on this earth to serve YOU. Its not MY job to pay for YOUR retirement or anything else. Yes, we have an obligation to provide for those who can’t but you all seem to believe that you are entitled to take whatever you want from your friends and neighbors, I assume, because you believe that you’re more special, or more rare, or more deserving than they are. Now that’s hubris!
February 11th, 2005 at 5:53 pm//So why are benefits given to everybody? If SS only paid out to the 20% or so of retirees that would be below the poverty line without it, there’d be no problem.
Comment by Joe  February 11th, 2005 @ 5:29 pm //
That’s a great question, and I have long thought that the answer to making SS solvent indefinitely was in curbing or severely limiting it’s payout to those Americans who quite clearly are not in need of it.
Actually, far more than 20% of American retirees would be below the poverty line w/o it. The rate for seniors before SS kicked in was 50%.
February 11th, 2005 at 6:02 pm//This is about whether 18 year olds should be allowed to let the 50 years between when they start working and when they retire work for them or whether they should be forced to make up the 50 years of growth and inflation today’s retirees would have gotten had they invested their fica tax. Period. //
You need to study up on what this bogus proposal is all about, and what it will do to the current system in transitioning. You’ve been misled. Those 55 and over may well be safe from cuts, but trust me, everybody else will be cut.
And, I’ve yet to see anyone explain what the justification for this bogus plan is if the BA itself admits that it won’t make SS more solvent. Why is that? See, it’s not really about “saving SS,” nor is it about allowing “ownership.”
If it were about saving SS, they’d simply rollback benefits to wealthy Americans and/or increase the payroll tax cap.
If it were about “ownership,” they would be merely adding a “social security PLUS” plan that would allow a worker to take ADDITIONAL money from his payroll to put into a nanny government money transfer plan. They wouldn’t have to touch SS at all in that case. All they’d have to do is build another program entirely, completely seperate from SS.
Also, how can you justify the discussion of this bogus plan knowing that the government will pilfer any amount that’s earned over 3.3%, and that even if you reach that goal, you won’t be earning any more than you would be without the nanny government/fascist money transfer/ponzi scheme that they’re pushing for?
This entire thing is bogus. The discussion is bogus, the plan is bogus, and most of all, the republicans pushing this are bogus. They’re lying to us once again. Let’s not all be so stupid this time, ok? Last time we fell for their lies, it cost over 100,000 lives.
This is purely about dismantling a very successful DEMOCRATIC program. Period.
February 11th, 2005 at 6:09 pmThanks for the comments on the ratio. I actually came across the answer after I wrote this.
To Kevin who asked what my point was … I have a conservative friend who made the argument that this decrease in the worker to payor ratio proves that the system was “broke” … so I guess my point was that I didn’t have a good answer to that.
February 11th, 2005 at 6:21 pmActually, far more than 20% of American retirees would be below the poverty line w/o it. The rate for seniors before SS kicked in was 50%.
Comment by Jeff  February 11th, 2005 @ 6:02 pm
During the depression probably half of ALL households were in poverty. Recently the elderly standard of living has been increasing faster than the rest of the population. Plus, they own their cars and houses, don’t have work expenses or education loans to pay, or children to provide for.
The definition of poverty has to be redefined for the elderly. Many have high wealth but little income.
With regard to SS reform you have to compare the poverty rates that would exist had their FICA contributions been given to them as a lump sum at retirement. You can’t say your going to take 12.4 cents of every dollar a person earns for their entire life such that they’re not able to have personal savings then when they retire tell them they’d be poor if you didn’t “give” them this benefit.
If people have private accounts and are required to save 12.4% of their income I guarantee that far less than 20% of the future elderly will be poor.
February 11th, 2005 at 6:30 pm//Its, apparently, unfathomable to you that I wasn’t put on this earth to serve YOU. Its not MY job to pay for YOUR retirement or anything else. Yes, we have an obligation to provide for those who can’t but you all seem to believe that you are entitled to take whatever you want from your friends and neighbors, I assume, because you believe that you’re more special, or more rare, or more deserving than they are. Now that’s hubris! //
So, America means nothing special to you at all then? You don’t see any reason why America is held up as a shining example for the rest of the world, other than that our leaders are beholden to their corporate masters, they make great bombs, and they can’t seem to keep any other kind of manufacturing base.
Here’s a little clue for ya, sparky. America is great because of things like SS. We don’t let our downtrodded die and rot in the streets. If you don’t like that plan, I could suggest probably 150 other countries that you could move to where you could step over these rotting corpses every single day, rather than have to pay to have them removed or to prevent them from dying there in the first place.
America is DIFFERENT than MOST other nations on the planet because we CARE. Not because we’re arrogant a$$holes who say “I’ve got mine, screw you.” That is a patently republican ideal, but NOT an American ideal.
What kind of nation do you think this is? Do you REALLY think we’d be better off just letting 50% of the population suffer, die, and rot in the streets than to all pitch in to prevent that curse? I can’t even imagine where you people get this line of subhuman thinking. How can you justify this? Are you a satan worshipper or a full out athiest, because you certainly cannot be a Christian and say things like this.
We build roads, schools, police and fire stations, an army, telecommunications lines, electrical grids, laws, monetary systems, etc., etc., etc. because it benefits ALL of society to do so. Same with SS (and healthcare for that matter). It behooves us economically, socially, morally, ethically, and spiritually to prevent the masses from dying and rotting in the streets, capice?
SS is NOT a retirement plan. It is a failsafe. Get that through your head. Two things to practice now…..Iraq had NO WMD and did NOT cause 9/11, AND social security is NOT an investment vehicle. Got it? Practice that over and over and over and over and over and over and over again. And then practice it some more.
Yes, we should ALL be contributing to our OWN retirement plans, whatever that may be. HOWEVER, we should NOT be disemboweling a proven successful government safety net in order to carry it on.
If you feel so strongly about needing your nanny government to launch your retirement plan private account for you, so be it. Push your legislators to create a NEW program for that. But tell them to LEAVE SS ALONE.
First, what they are proposing will NOT enhance the program, it will HURT IT, if not completely destroy it (which is, as I said, what they really want anyway).
Secondly, they will NOT be giving you personal control, as you’ve been misled into believing. This is nothing more than yet another grandiose republican massive expansion of the federal government through yet more irresponsible republican borrow and spend policies.
Third, stocks are RISKY, even when your nanny government is the parental figure that helps you choose them. Remember ENRON? That was your president’s close personal pal Kenny Boy that created that disaster. ‘nuf said. You CAN lose EVERYTHING in this venture. Past performance does NOT guarantee future results.
Fourth, if you’re STILL convinced that big government is the answer to all of your ills, take a peek at what happened in Great Britain and Chile when they did this very thing. Ironically, Great Britain is RIGHT NOW considering scrapping their failed privatized system and replacing with a system modeled after OURS. Go figure.
Social security is NOT broken, and, even if it WERE, Bush himself has admitted that his proposal will NOT make it any more solvent. In fact, it will excacerbate the fiscal problems considerably, by dramatically moving the time period at which SS will have no further trust funds available, from a projected date of 2052 to a projected date of 2018. Hardly what anyone with a working brain would call a “solution” to the fiscal solvency of the program.
Bush’s plan is bogus, top to bottom, and it should be a non-starter. In fact, it SHOULD become a political liability for him and any republicans foolish enough to latch onto it. Had they started from a point of honest discussion, and had they not presented a plan that very clearly does not do what they proposed it would do, they may have had some area for discussion. As it is, they’ve opened things up with deception and fraud, and, coming from an already discredited, fraudulant, dishonest administration, they’ve got a VERY steep climb to even come CLOSE to the realm of what one might call “credibility.”
Peace out, folks. Have a nice weekend. Don’t let the rightwing talking heads rot your brains too much. Read a book. Kill your TV. Play with your kids. But don’t keep swallowing the tripe that these snakeoil salesmen are pitching.
February 11th, 2005 at 6:34 pmAlso, how can you justify the discussion of this bogus plan knowing that the government will pilfer any amount that’s earned over 3.3%, and that even if you reach that goal, you won’t be earning any more than you would be without the nanny government/fascist money transfer/ponzi scheme that they’re pushing for?
Comment by Jeff  February 11th, 2005 @ 6:09 pm
The specifics will come from congrees. Bush has only painted the broad strokes. I think this 3.3% claim is bogus.
But, yes, the point is to have recipients get benefits from the growth of their personal accounts rather than from the taxes of their grand children. In that respect, the goal is to cut government supplied benefits understanding that they will be replaced plus with personal account earnings.
February 11th, 2005 at 6:36 pmSo, America means nothing special to you at all then?
Comment by Jeff  February 11th, 2005 @ 6:34 pm
America means opportunity. It means personal responsibility. It means sacrifice to ensure that YOUR CHILDREN have a better life than you. It means FREEDOM and INDEPENDENCE.
America was formed over revolt of a 1 cent tax on tea. What do you think our forefathers would say about a 12.4% tax on every dollar most workers earn for their entire life.
What do you suppose the folks who settled the west would think about today’s welfare queen/farmers? What do you suppose the immigrants that left distance lands and risked death and disease just to get here for a chance to work would think of today’s workers?
February 11th, 2005 at 6:45 pm“I’ve got mine, screw you.� That is a patently republican ideal, but NOT an American ideal.
Comment by Jeff  February 11th, 2005 @ 6:34 pm
You’ve got yours and you want mine?!
What does retirement planning have to do with welfare? You can provide for the elderly poor AND allow young workers to benefit from the time value of money.
The only way that SS survives to 2042 is if the AVERAGE worker is forced to pay $480 a month for the retirement portion of FICA. You see no problem with that?
February 11th, 2005 at 6:52 pmSo, America means nothing special to you at all then? You don’t see any reason why America is held up as a shining example for the rest of the world, other than that our leaders are beholden to their corporate masters, they make great bombs, and they can’t seem to keep any other kind of manufacturing base.
Comment by Jeff  February 11th, 2005 @ 6:34 pm
America was a “shining example” long before the explosion of the federal government?
I guess you would say that mexican immigrants are coming to the U.S. for our welfare benefits not our work opportunities?
February 11th, 2005 at 6:58 pmThe Swift Report has a great online quiz for kids that explains Bush’s social security plan quite well.
February 11th, 2005 at 7:15 pm#49 Comment by Louis Varnson  February 11th, 2005 @ 1:00 pm
Disparate Impact: Social Security and African Americans
Executive Summary
by Michael Tanner
THIS IS A LIE!
Editorial: Social Security/Blacks get more, not less, from it
January 17, 2005 ED0117
http://www.startribune.com/stories/561/5187689.html
Bush repeated last Tuesday “African-American males die sooner than other males do, which means the [Social Security] system is inherently unfair to a certain group of people. And that needs to be fixed.” That is an entirely phony assertion; it has been debunked by the Social Security Administration, by the Government Accountability Office and by other experts. Bush and those around him know that. For them to repeat what they know to be a blatant lie is despicable fear-mongering.
Bush didn’t make up this phony line on his own; it comes from the Heritage Foundation, which a number of years ago did a study purporting to show that because African-Americans have a shorter life expectancy than whites, they get less in return for the taxes they pay into the Social Security system.
Heritage failed to factor in the progressivity of Social Security benefits; on a taxes-paid to benefits-received ratio, those with lower incomes get more back. Blacks tend to earn less than whites, and thus their Social Security benefits are larger in comparison to taxes they pay.
• Social Security is more than retirement benefits. It also includes survivor and disability benefits. Blacks benefit disproportionately from those programs. While blacks are 11 percent of the workforce, for example, they are 18 percent of those receiving disability benefits. Almost half the blacks receiving Social Security — 47 percent — are getting disability benefits or survivor benefits.
The Social Security actuaries found that Heritage had exaggerated substantially the amount blacks pay in Social Security taxes and low-balled the benefits they receive. “In fact,” the actuaries said, “results from more careful research reflecting actual work histories for workers by race indicate that the non-white population actually enjoys the same or better expected rates of return from Social Security than for the white population.”
The GA