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Social Security

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  • Vyrle Owens
    Anybody following the Social Security discourse? Vyrle Privatizing Social Security by Harry C. Kiely How many times can President Bush get away with crying
    Message 1 of 2 , Mar 3, 2005
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      Anybody following the Social Security discourse?

       

      Vyrle

       

       

      Privatizing Social Security

      by Harry C. Kiely

      How many times can President Bush get away with crying wolf? First came the "weapons of mass destruction." Congress believed him and committed our nation to a tragic war in Iraq , based on lies and deception. Then there were the massive tax cuts for the rich, guaranteed to get the economy going again. The result? The budget surplus was traded in for a giant deficit to be passed on to our grandchildren.

      With Social Security, the president is at it again. The whole system is moving into crash mode, he says, so we need to take radical steps to rescue it. (Question: Why did the president wait until after the big tax cuts to go into panic about Social Security?)

      If we pay attention to our common life, we know that if a lie is repeated often enough, it becomes the accepted wisdom. Such has been the case with Social Security. For 20 years, the Wall Street investment industry has been disseminating reports about the imminent shortfall of Social Security when the baby boomers start retiring. So pervasive has been this disinformation campaign that reporters for the mainstream media treat it as common knowledge. Today, many workers under age 40 believe Social Security will not be there for them when they retire.

      Why Wall Street's sudden interest in ordinary people, including the millions who have been kept out of poverty through Social Security support for seven decades? The answer is simple: profit. Servicing the accounts made possible by partial privatization would net the investment firms many billions of dollars.

      + Read the full article

       

    • Eric Bone
      I ve been following it fairly closely. It seems to me that this is a great example of creating as much confusion as possible in order to realize an
      Message 2 of 2 , Mar 5, 2005
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        I've been following it fairly closely.  It seems to me that this is a great example of creating as much confusion as possible in order to realize an ideological goal.   This is how I understand the issues:
         
        1. Sometime around 2018 the incoming Soc Sec taxes will not pay for the recipients.  Then money will have to be drawn out of the the SS trust fund.  I believe it was 1983 when Congress and President Reagan purposely raised the SS taxes so that a supply of money could be built up to pay for the Baby Boomer's retirement.  Under Reagan, Bush 1, Clinton, and Bush 2, that money was put into US Treasury Bills and used for government expenses.  It's going to get very interesting when that extra SS tax gradually decreases to zero and makes it harder to find revenue for the federal govt.  It will be even more interesting when it's time to use other revenues to pay off the T-Bills that the SS fund is invested in.
         
        2. Around 2042 that SS fund in T-Bills is likely to be exhausted.  Then other federal revenues would have to be put directly into SS, no longer paying off any T-Bills that SS had invested in.
         
        3. My understanding is that fairly minor adjustments to revenues and benefits can be made so that SS never gets to the point where it has to draw money from anyplace other than (a) SS taxes and (b) the SS trust fund.  However, even minor adjustments will probably be hard to agree on.
         
        4. Creating private accounts will not address the problems in 1 and 2.  Whether they are created or not, the steps described in 3 will have to be taken.
         
        5. It appears that the real reason that people want to move towards private accounts is they want to make further changes later, where they eventually want to get rid of SS taxes.  They don't like this idea of a social insurance program, and they want everyone to be responsibile for their own retirement.  This is a legitimate debate to have, but it has little relation to the issues in 1-3.  It is another example of pretending two issues are connected more closely than they really are.  How long before we hear that the state of social security has "changed the equation" with regards to private accounts?
         
        -Eric

        Vyrle Owens <vyrle@...> wrote:

        Anybody following the Social Security discourse?

         

        Vyrle

         


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