Posted by MJ
I must come clean. I did not watch the president’s speech last night. I was too busy watching college basketball. I don’t regret it at all.
Last summer when I was in D.C., I went out for drinks with a friend that I used to work with at a policy think tank. At that time, my friend, who is Republican, was working on Bush’s speech writing staff. He was telling me these hilarious stories about rehearsing with the president. As much as I like to degrade the president for not speaking well, it is common for candidates/officials to go through excruciating practices while preparing for a speech. But, my friend, who had worked with many other politicians, did admit that he had never seen anything like Bush. I don’t think any of us have.
I’m assuming the State of the Union address went fine, and that we are about to invade another Third-World country. Then I read the papers this morning and realized that Bush also spoke about domestic issues. I applaud any attempt at Bush to focus domestically. Also, to a certain degree, I support privatizing Social Security. I think that those who want to invest part of their taxed Social Security withholdings should be allowed to. And I think that those who do so should also lose an equal piece of Social Security benefits that they so chose to forego.
Those who actually know something about politics will also recall that Clinton first introduced this amendment to Social Security. I also think that when Clinton did propose it, he was trying to ward off some Republican witch-hunters who were trying to remove him from office. Nevertheless, privatizing a portion of Social Security is Clinton policy. Then, the Republicans were fiercely opposed to any thing short of dismantling Social Security all together. Today, Bush’s proposal (which is oh so similar to Clinton’s) is treated by Republicans as one of the greatest things they have ever heard. It’s funny how things change.
Even though I support a form of privatization. I am not in favor of the plan Bush has proposed. Or at least I’m not concerned with it because I don’t think it does anything. Social Security is not one of my strong points, I will admit to that. I do International Relations, so I am confused about the savior Bush’s attempt at warding off the “crisis” that is Social Security. In fact, I’m confused at Bush’s foreign policy also, so I think I’m entitled to make some comments about his domestic plan. The Washington Post ran an editorial this morning I think does a fair job of summarizing Bush’s plan. And for those who are like Bush and do not read, it’s worth two minutes of your life to read this. The editorial does not draw any conclusions; it just simply lays out the facts. Sometimes Fox News, or Fat Limbaugh doesn’t do that.
I’m not going to go into detail, because the editorial does a fine job of it. I will say that there is no immediate crisis in Social Security. The figures Bush threw at the public a couple weeks ago were false, go to factcheck.com and read it for yourself. Everything is a crisis to Bush. But, the president has realized that even he has some limits to his blatant lies. The president has since toned down his rhetoric and the “crisis” has now become a “problem.” To me the real crisis are the nearly 50 million people (nearly double the entire population of Canada) in this country without health insurance. To me the real crisis is the 15% (over half are children) of the American population that lives in poverty. But, you will never hear anything about those people from a guy who has never been poor a day in his life.
I think if we are going to talk about Social Security, we must talk about social security.
February 03, 2005
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Think of it like a thesis paper. The 65-plus paper is not due for a few months so you wait and in the meantime spend your time on other, lesser projects and a few beers.Then it's one week before the paper is due. You begin to formulate a plan, look at the sources you are going to need, spend another day reviewing it and analyzing it. Next thing you know it's 5pm the night before and you haven't started composing your thoguts, and have to pull an all-nighter just to do a half-assed C (or D) quality paper.
ReplyDeleteThat's the problem I have with the "it's not a crisis" argument. It seems pointless to argue over whether it is a crisis or not. It should be obvious to all that it will not be able to sustain itself soon after the 20-year old retires.
I am not committed one way or the other on the president's program but like you I do believe our president has not offered us the kinds of financial sacrifices we will have to make in order to buffer the program up.
Bush may have the right idea about some privatization but we may ultimately have to save a little more or use an increased payroll tax as a kind of investment to fund for that effort.
The transitional costs may be huge, as the Washington Post editorial indicates, and that makes my comments regarding the other spending programs particularly important. The president must cut spending on other domestic programs in order to help off-shoot those costs, and he will for sure have to give up on making the tax cuts permanent, and in fact probably increase them for the more affluent citizens who could afford it.
I am sorry that the Democrats have not yet offered an alternative plan yet. It does this country no good if the debate is between a challenged and weak plan and no plan or between an unchallenged plan and no plan. Something should be done and within the next four years I hope the two sides could reach an agreement on a good one.
Heretic, I agree with you on some parts, but not all.
ReplyDeleteI've written a thesis. It was 130 pages. I didn't really look at it as a crisis, even though I did keep putting it off. I looked at it as more of a way to further my education, and thus enhance my lifestyle by presenting myself with better job opportunities. So far it was a good investment, just like Social Security.
I absolutely disagree that SS is in an immediate crisis situation. That is exactly what Bush would have us believe. Even if we do nothing to SS, it will suffice until at least 2040. I say instead of trying to scare everyone into thinking that the world is going to end, let's have a national discussion about Social Security. What's wrong with doing that? Let's not rush into this, this isn't a foreign country we are invading here. Let's do some math, some planning and do it right. I'm tired of the "half-assed" planning by the Bush administration. So far Bush's rush has only led us into worse situations.
The Neocons have to realize that this country cannot live in fear at all times. I'm so tired of the scare tactics.
In fact, the way in which you describe Bush's future plans and all the ways he has NOT prepared the country for its financial sacrifices necessary to fund it, would create more of a crisis, and much sooner, than if SS was left alone. So which is it? Work on a solution that solves the problem or rush into it and create a more grave future crisis like you are suggesting.
You don't have to apologize for Democrats not offering alternatives to anything. If anything, Democrats spend half their time trying to figure out what day of the week it is and the other half trying to get people to realize that all Bush knows how to do is scare.
I think you and I both agree that this has to be a bi-partisan solution. And it's not something that needs to be refined by June either. Getting a bi-partisan solution from Republicans will be much harder than getting it from Democrat, however.
Thanks for your post.
Actually I think the Democrats are doing much worse because they aren't merely telling us we should take our time and deliberate on how we are going to fix social security but are instead suggesting that we put it on the back burner.
ReplyDeleteAs someone in my mid-twenties I am quite worried about social security and I think anyone in my position should worry about it being there in the future. I don't know how it should be fixed as of yet.
Expenses go up, not down and given how much our government spends I could not help but wonder if this administration and future ones will take money from social security to pay for new and old government programs.
I have a lot of confidence in the government's willingness to run up a credit card debt and leave the bill for the future generation.
It is just not fair to have those of us who are working to make ends meet just for ourselves to have to pay for the debts from the previous generations and then have that future generation and then change the rules so that the generations that follow don't have to do anything for you.
I think it will be harder to start the deliberations on social security two, even three years from now. By that time we will have entered a new election cycle. When the new president comes in, he or she will fear for his or her own re-election and probably put off the difficult decisions again until re-elected. So now we are talking six, maybe seven years from now and nothing is done.
And so far I've seen only one person put a plan on the table. I'm not suggesting it is the right plan but it is a plan. I'd like the minority party, instead of being just nay-sayers, get out there in front and put their credibility on the line as well. In fact, I think it is their obligation to come up with a vision for the future. They are paid to govern, not sit there and just say "no, no, no, everything's fine the way it is." If everything is just so fine and dandy why do we even need a legislature?
Democrats should go to their own set of experts and offer an alternative very soon. Let the debates begin now and then, within the next two years they could debate on that and the president's proposal but something should be done soon before all of us are stuck holding two jobs at age 78 trying to make ends meet, let alone leave something to our kids.
If you don't mind, I would like to chime in here. As an economist, I ty to eliminate emotions, and decide with logic. That being said, I reject Bush's claim about a "crisis". I do however, throw my full support behind his privitization ideas. Being in my mid-twenties as well, I would like to have a full life-time of income generating time to prepare for retirement. Yes this could be done later, but why wait until we are on the threshold of bankruptcy to prepare against it?
ReplyDeleteThe transition costs that Herectic mentioned will be the citizens ahead of us that will not have as much time to gather income. I don't know if this is what he has planned, but it is obvious that we will never be able to do away with SS, since there are many Americans that do not earn enough income to live after retirement, or those that don't work at all.
One last statement. Over the life of SS, take a 15-20 year period of time, and the most Rate of Investment(or Return) is 1.5%. Take the same numbers for the stock market, and you get anywhere from 7-8% ROI. Statistically speaking, one can see that trusting our economy yields much higher results.
Heretic, I completely agree with you.
ReplyDeleteThe Democrats, right now, are not offering any alternatives. But I don't think they are wanting it put on the back burner, though. They are just wanting Bush to calm down with his rhetoric and work on it as a legislature and not as a partisan dream. In order for that to happen, it will take some concessions by the Republicans, who right now think they are being guided by the hand of God and won't negiotiate with anything.
CraigMc, I've been wondering where you were in this topic. This is your backyard.
But, how can you throw your full support behind Bush's privitization plans when you admit that you don't know what he's planning?
You use the stock market projections for your support. That, however, is not what Bush is proposing. From the Washington Post, Friday Feb. 4, 2005, Benefit Cuts Would Offset Contributions:
"Here is how the personal account system would work under the Bush plan:
If a worker set aside $1,000 a year for 43 years, and earned 4.6 percent annually on investments, the account would grow to $221,552 in today's dollars. That money would be the worker's upon retirement and would probably be paid out in increments of $15,952 a year, according to calculations by the Center for Budget and Policy Priorities, a liberal advocacy group. A White House calculation showed a smaller payout.
But guaranteed benefits over the worker's lifetime would be reduced by approximately $151,990 -- the amount the worker would have contributed to Social Security but instead contributed to his personal account, plus 3 percent interest above inflation. The remainder, $69,562, would be the increase in benefit the worker would receive over his lifetime above the level he would have received if he stayed in the traditional system. That sum -- expressed as an annual payout -- would total $5,008.
But that benefit gain could be substantially smaller. The Congressional Budget Office, Capitol Hill's official scorekeeper, factors out stock market risks to assume a 3.3 percent rate of return and then subtracts 0.3 percent for expected administrative costs on the account. Under that scenario, 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."
And probably on Monday, the administration will come out with new figures because they have been changing it daily since the State of the Union.
Like I said, maybe not very well, I'm in favor of a form of privitization. But until Bush can lay out the his plan fully, I cannot support it. And from what I have read so far about his plan, I don't support it. I would never just blindly throw support behind something as serious as this topic.
Thanks guys.