What liberals think we should know about SS privatization

Discussion in 'Economy' started by ScreamingEagle, Mar 2, 2005.

  1. ScreamingEagle
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    ScreamingEagle Gold Member

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    Last night a guy knocked on my door to get my signature on a referendum against Social Security privatization. More or less the way he stated the issue was that "Bush was out to destroy our Social Security by putting it in the stock market". When I stated that I thought the stock market would probably get us better returns he gave me an evil look and immediately left, handing me a flyer which said:

     
  2. Merlin1047
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    Merlin1047 Senior Member

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    Frankly I'm not sure what to think about GW's plan to privatize social security. I'm beginning to have some serious questions about whether or not it's set up to benefit the taxpayer, but I need to do some more reading. The problem is that it's hard to separate the hype and propoganda from the facts.

    But I loved this passage from the flyer you received. It's typical lib pablum:
    "rather than slashing guaranteed retirement benefits. First, we must require Congress to pay back the money borrowed from the trust fund."

    The trust fund exists in name only. There is nothing actually IN the trust fund, because government spends the money before it even gets there. Note that they want "Congress" to pay back money stolen from the mythical trust fund. Well now, I'm all for that!!! Let's line up those Congressmen and Senators and freeze their bank accounts, seize their assets and sell their wives and children into indentured servitude until "Congress" repays all that money they stole.

    But the truth is that having "Congress pay back the money . . ." is actually code for "let's raise taxes on working suckers until they squeal". Make "Congress pay it back", my eye. If that ever actually happened, I'd pay to watch it.
     
  3. Huckleburry
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    Huckleburry Member

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    The think tank that the flyer cited is one that represents the interests of poor and working class families. It is a big group that has been around the block for a while. I am usually a little skeptical of economic reports publish by think tanks because they are rarely objective. This is not to say that the economists are purposely deciveing us. There methods are consistent and their research sound. Unfortunately, economics is an inexact science and the assumptions we make about the market often dictates the outcome.

    SS privatization could be a good thing in the very long run (30+ years). It depends on how we structure it and how the funds are run and managed. For instance, spider accounts would be much less costly then managed accounts but they could expose the markets to unusual risk levels created by the weight of that much money moving around the market. In addition, the current privatization plan requires retirees to use "their" money to purchase annuities upon retirement. These are not transferable and disappear when the holder dies (so much for "your" money). In addition, the government takes back the amount that performed along with SS fund. Thus, the first 3 percent of your account is taken right off the top. Such a hit means that your portfolio will have to take on much more risk to ensure that you have the needed funds when you retire (think 7-10 percent gains). I am going into finance and would love to stop paying SS and saving it myself. However, if and only if that money were truly mine upon my retirement. No taxes, no forced annuities, no regulations. Also I know what I am doing and have a financial manger who really knows what he is doing. I would worry about folks who don not understand the market because they could potentially loose their lives savings. Moreover, even a properly managed portfolio is not immune to sudden downturns in the market as we saw in the 30's 70's and 90's. That is almost a major down turn a generation.

    To fix SS we need to raise the retirement age. Allow the trust fund to operate freely, and peg it to the CPI rather than raw inflation or wage rates.
     
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  4. ScreamingEagle
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    ScreamingEagle Gold Member

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    Good point. It seems that there is always some group that can support a particular outlook. During the election campaign both parties were quoting Nobel Prize economists which supported opposing outlooks. It makes one wonder what is really true anymore. I guess the facts can be twisted anyway you want to fit whatever the given premise happens to be.

    How high should we raise the retirement age?

    I'm beginning to have doubts about this new "privatization of funds" like both you and Merlin. It doesn't seem very "private" when the government still gets to slice and dice the funds anyway they choose. :cuckoo:

    Why don't we just phase away SS altogether?
     
  5. archangel
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    Even President GW Bush is having second thoughts on SSA Privatization..I truly believe as I have stated in past posts that it is a bad idea..It now appears as if the President sees the light..Maybe he should stop listening to Allan Greenspan, the political hack of the century..Senator Harry Reid of Nevada said today on CNN(I know they suck!) that the SSA is solvent for the next fifty years if nothing is done at all...well he went on to say it could be worked on minus the privitization clause..I rarely agree with Harry,however I agree with him on this one... :scratch:
     
  6. ScreamingEagle
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    ScreamingEagle Gold Member

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    :lalala: <----Harry Reid


    http://www.seniorjournal.com/NEWS/SocialSecurity/4-03-23SSbroke2042.htm

     
  7. Deornwulf
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    Deornwulf Member

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    I have a simple solution to the whole SS problem. Just let me keep my damn money and decide what to do with it myself. I have grave doubts with the government's ability to guarantee me an income when I retire anyway so I might as well take the responsibility on myself.
     
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  8. Huckleburry
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    Huckleburry Member

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    Greenspan is the most dedicated public servent in the world today. Calling him a political hack because he dares dissagree with your favored politicians is, frankly, bullshit. The man could be making millions in the private sector but instead chooses to take a salary of a measly couple hundred grand a year and subject himself to half wit polticiancs who failed econ 101. He told the gov't to get the deficit undercontrol because it was starting to crowd out other investment. He is right. He has been doing war with the other central bankers (without help from home) and has been largley winning. Calling Greenspan a hack is discrediting akin to calling a guy who lost his leg in Iraq a traitor.

    The reason we should not scrap SS is because it provides confidence in the market. In addition it is human. The richest country in the history of the world should not leave its elderly to starve on the street, regardless of past decions, yes this means that as a society we shoulder a weighty burden however it is a weight we should be willing to bear. SS can be reformed. Privitization can work. Like most things in ecnomics timing is everything and now is not the right time in regards to SS. We need to bring the deficit under control and then propose a privitizaiton scheme that truely privitizes the system, strengthens the market, and insures a brighter not bleaker future for todays young workers.
    Cheers
    Huck
     
  9. rtwngAvngr
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    rtwngAvngr Guest

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    Ok. So there IS a problem. Privatization CAN work. Now, it' just not the right time.

    You're a funny, happy, smiling clown.
     
  10. Huckleburry
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    Right Wing,
    If you read my posts you would know a few things. First, I know there is a problem with SS. Second I am opposed to this Privitization because it does not solve the problem and because it is not really private. Third; I have not made an argument about SS because I am waiting for one of the folks from the right to make an ECONOMIC argument on SS. This would involve real economics and real argument rather than just sputtering buzz words like Ponzi Scheme and GDP. I know what those things mean. So parrot the ball is in your court. Convince me.
     

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