Privatizing Social Security The Bush Mistake

[SwimExpert]

GenXers and Millennials won't pay the cost of the system under the current plan?

If I understood the OP correctly, I think he is suggesting that what would have happened is that the Boomers would have enjoyed a reduction in SS contributions leading up to retirement, along with an increase or at least maintaining of generous benefits upon retirement, based on a short term artificially inflated SS trust. In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay, and reductions to benefits and pushing back of retirement age such that the substantially negative effects would fall on us and pass the Boomers by.

I've heard this before about Bush's plan, but have never had the details laid out to evaluate for my own self.

Thanks, maybe that's what he meant.

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.

• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts

• Create a guarantee for those people born before 1950 for the benefits promised by the system

• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

This sounds like those 55 and older at the time (2005) would continue as is.
Those younger would put some percentage, say 10%, into their private accounts and their benefit would be reduced by 10%. Adjusted for the time they started contributing, of course.

In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay

My understanding was we'd pay the same SS taxes, just divided between "Trust Fund" and private account.

and reductions to benefits and pushing back of retirement age

Reduction in SS benefits paid, theoretically covered by an even larger increase paid from the private account.

The vague impression I get is that the argument is at least partially based on the idea that the 2008 crash would have left private accounts in shambles. So it's a difficult case to make at best. Nonetheless, I am highly skeptical of anything Boomers suggest when it comes to SS. The bastards are all too eager to rape subsequent generations into debt so they can live high on the hog now and not have to pay for it.

 

[Toddsterpatriot]

And when the system was completely privatized, it wouldn't be needed.

The system wouldn't exist which is a very different thing from wouldn't be needed.

The Bush plan pits promises that it can't fulfill. On one hand it is telling people that our children and grandchildren will not object to paying taxes that are nearly double what we pay. Bush isn't in a position to know who those people will elect.

On the other, it is telling workers that private accounts are theirs. Private accounts were always going to be run by a central administrator. Unless the money is in your name, it is entirely the same as what we have today. The money is invested by a third party in assets that you don't own. Bush can't assure you that the money is yours unless it is in your bank account - and that was never going to happen.

The system wouldn't exist which is a very different thing from wouldn't be needed.

If you saved 12.4% of your lifetime income and invested it in the stock market until age 67, why would you need Social Security?

On one hand it is telling people that our children and grandchildren will not object to paying taxes that are nearly double what we pay

24.8%? Why so high?

Unless the money is in your name, it is entirely the same as what we have today.

A proper fix would require accounts in our own name.

Bush can't assure you that the money is yours unless it is in your bank account - and that was never going to happen.

Yeah, big government doesn't want to give up that much money or control.

 

[ScienceRocks]

I think everything the government is doing should be privatized.

Dumb...Yeah, let corporations that have sold this country to china for the past 40 years handle our policing, science intuitions, etc. What a effin idiot you're.

Some things just shouldn't be for profit...Period.

 

[ScienceRocks]

GenXers and Millennials won't pay the cost of the system under the current plan?

If I understood the OP correctly, I think he is suggesting that what would have happened is that the Boomers would have enjoyed a reduction in SS contributions leading up to retirement, along with an increase or at least maintaining of generous benefits upon retirement, based on a short term artificially inflated SS trust. In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay, and reductions to benefits and pushing back of retirement age such that the substantially negative effects would fall on us and pass the Boomers by.

I've heard this before about Bush's plan, but have never had the details laid out to evaluate for my own self.

Thanks, maybe that's what he meant.

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.

• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts

• Create a guarantee for those people born before 1950 for the benefits promised by the system

• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

This sounds like those 55 and older at the time (2005) would continue as is.
Those younger would put some percentage, say 10%, into their private accounts and their benefit would be reduced by 10%. Adjusted for the time they started contributing, of course.

In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay

My understanding was we'd pay the same SS taxes, just divided between "Trust Fund" and private account.

and reductions to benefits and pushing back of retirement age

Reduction in SS benefits paid, theoretically covered by an even larger increase paid from the private account.

The vague impression I get is that the argument is at least partially based on the idea that the 2008 crash would have left private accounts in shambles. So it's a difficult case to make at best. Nonetheless, I am highly skeptical of anything Boomers suggest when it comes to SS. The bastards are all too eager to rape subsequent generations into debt so they can live high on the hog now and not have to pay for it.

I am assuming all generations want to be able to work and put their money into a safe place. SSI does that and works.

 

[Zander]

Who gives a fuck about a 10 year old plan that never happened? You've got to be a real moron!

Oh, never mind, the OP is an "economist"....

 

[Toddsterpatriot]

GenXers and Millennials won't pay the cost of the system under the current plan?

If I understood the OP correctly, I think he is suggesting that what would have happened is that the Boomers would have enjoyed a reduction in SS contributions leading up to retirement, along with an increase or at least maintaining of generous benefits upon retirement, based on a short term artificially inflated SS trust. In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay, and reductions to benefits and pushing back of retirement age such that the substantially negative effects would fall on us and pass the Boomers by.

I've heard this before about Bush's plan, but have never had the details laid out to evaluate for my own self.

Thanks, maybe that's what he meant.

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.

• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts

• Create a guarantee for those people born before 1950 for the benefits promised by the system

• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

This sounds like those 55 and older at the time (2005) would continue as is.
Those younger would put some percentage, say 10%, into their private accounts and their benefit would be reduced by 10%. Adjusted for the time they started contributing, of course.

In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay

My understanding was we'd pay the same SS taxes, just divided between "Trust Fund" and private account.

and reductions to benefits and pushing back of retirement age

Reduction in SS benefits paid, theoretically covered by an even larger increase paid from the private account.

The vague impression I get is that the argument is at least partially based on the idea that the 2008 crash would have left private accounts in shambles. So it's a difficult case to make at best. Nonetheless, I am highly skeptical of anything Boomers suggest when it comes to SS. The bastards are all too eager to rape subsequent generations into debt so they can live high on the hog now and not have to pay for it.

The vague impression I get is that the argument is at least partially based on the idea that the 2008 crash would have left private accounts in shambles.

Even assuming that 100% of all Social Security "contributions" were invested in the market between 2005 and 2008, that crash on such a small part of lifetime "contributions" would have been quickly recouped, considering a 40 year career.

 

[ScienceRocks]

With what a know of unregulated corporations from history this thread is not only unmoral but evil.

Corporations do NOT care about you and you don't get a vote unlike with your government.

 

[Toro]

Trump will save Social Security!

 

[SwimExpert]

I am assuming all generations want to be able to work and put their money into a safe place. SSI does that and works.

Are you retarded? Do you have any idea how much retirement money the average American loses because SS taxes are taken away from them, when they could have instead invested them in a meaningful retirement plan?

 

[ScienceRocks]

Government makes it fair for the little guy!
They make it so all people can have police
Can have roads
Can in many cases fire fighters to put the fire out
Can get the latest storm warnings
And of course can save money back in a safe and protected way called ssi.
We have the best science institutions on earth and guess what! The data is ours! Something to be truly proud of!

Anyone that tells me that we should give this all to corporations is a fucking loon. Sorry Darkwing but this is the kind of idiot that I really do have a problem with.

 

[ScienceRocks]

In a corporate ran country why vote? It will be only for the rich man as everyone else lives in a cardboard box.

 

[Blackrook]

Matthew, you are a barely literate lunatic. Your extremist positions, combined with your low IQ, make you what's called a "No Information Voters."

In other words, you don't have a clue what's going on.

 

[JoeTheEconomist]

10 years ago, GWB tried to introduce personal accounts into Social Security with a plan that remains a strawman for democrats to this day. This plan was dumb, not in the way that the critics suggest. The greed of Wall Street was the least of its problems. It was just a dumb idea.

His plan in total did little more than change the pocket which pays for Social Security. It was a shifty plan to push the cost of the system from Boomers to GenXers and Millennials (who really didn't even have a vote). The Trust Fund would have been exhausted more quickly, and our children would have been left to pay for his promise of benefits to anyone born before 1950. It was a bad idea.

I write on the issue of Social Security reform, and welcome a discussion on the 2005 plan. The longer piece can be found here : Bush’s plan would not have fixed Social Security

In short, there is no new investment capital created. No we weren't going to get 7% returns. No this plan isn't good for the poor. In total, his plan doesn't fix Social Security. It replaces Social Security with something that is entirely different. He wanted the system to be bigger. No bigger will not work.

Why don't you give a 10 bullet point description of the plan so we know what you are referencing.

Most don't understand details.

All they know is that Bush said Social Security and reform in the same world and the left wing apes started flinging all kinds of s@@t all over the place. It never got beyond that.

The president laid out his framework for broad based reforms for Social Security in the State Of The Union in 2005. That proposal would:

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.
• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts
• Create a guarantee for those people born before 1950 for the benefits promised by the system
• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

 

[Sun Devil 92]

I think everything the government is doing should be privatized.

Dumb...Yeah, let corporations that have sold this country to china for the past 40 years handle our policing, science intuitions, etc. What a effin idiot you're.

Some things just shouldn't be for profit...Period.

Can you get someone to press the stop button.

Your recordings are getting old and garbled.

 

[Sun Devil 92]

10 years ago, GWB tried to introduce personal accounts into Social Security with a plan that remains a strawman for democrats to this day. This plan was dumb, not in the way that the critics suggest. The greed of Wall Street was the least of its problems. It was just a dumb idea.

His plan in total did little more than change the pocket which pays for Social Security. It was a shifty plan to push the cost of the system from Boomers to GenXers and Millennials (who really didn't even have a vote). The Trust Fund would have been exhausted more quickly, and our children would have been left to pay for his promise of benefits to anyone born before 1950. It was a bad idea.

I write on the issue of Social Security reform, and welcome a discussion on the 2005 plan. The longer piece can be found here : Bush’s plan would not have fixed Social Security

In short, there is no new investment capital created. No we weren't going to get 7% returns. No this plan isn't good for the poor. In total, his plan doesn't fix Social Security. It replaces Social Security with something that is entirely different. He wanted the system to be bigger. No bigger will not work.

Why don't you give a 10 bullet point description of the plan so we know what you are referencing.

Most don't understand details.

All they know is that Bush said Social Security and reform in the same world and the left wing apes started flinging all kinds of s@@t all over the place. It never got beyond that.

The president laid out his framework for broad based reforms for Social Security in the State Of The Union in 2005. That proposal would:

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.
• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts
• Create a guarantee for those people born before 1950 for the benefits promised by the system
• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

Thanks.

Now I know what you are referencing.

 

[Toddsterpatriot]

10 years ago, GWB tried to introduce personal accounts into Social Security with a plan that remains a strawman for democrats to this day. This plan was dumb, not in the way that the critics suggest. The greed of Wall Street was the least of its problems. It was just a dumb idea.

His plan in total did little more than change the pocket which pays for Social Security. It was a shifty plan to push the cost of the system from Boomers to GenXers and Millennials (who really didn't even have a vote). The Trust Fund would have been exhausted more quickly, and our children would have been left to pay for his promise of benefits to anyone born before 1950. It was a bad idea.

I write on the issue of Social Security reform, and welcome a discussion on the 2005 plan. The longer piece can be found here : Bush’s plan would not have fixed Social Security

In short, there is no new investment capital created. No we weren't going to get 7% returns. No this plan isn't good for the poor. In total, his plan doesn't fix Social Security. It replaces Social Security with something that is entirely different. He wanted the system to be bigger. No bigger will not work.

Why don't you give a 10 bullet point description of the plan so we know what you are referencing.

Most don't understand details.

All they know is that Bush said Social Security and reform in the same world and the left wing apes started flinging all kinds of s@@t all over the place. It never got beyond that.

The president laid out his framework for broad based reforms for Social Security in the State Of The Union in 2005. That proposal would:

• Allow workers to invest a small portion of their Social Security taxes in individual accounts.
• Reduce the benefit formulas to factor in Social Security to reflect earnings from individual accounts
• Create a guarantee for those people born before 1950 for the benefits promised by the system
• Provide direct subsidies from the general fund to the system to fulfill the promises made by the system.

Where is the need for the doubled payroll tax?

 

[JoeTheEconomist]

In the long term, we GenX folks and the Millenials behind us would have ended up faced with a more dire reality check, demanding an increase in SS taxes we pay

My understanding was we'd pay the same SS taxes, just divided between "Trust Fund" and private account.

This is a common misperception because the Bush press team did not explain the transition costs well. Today, any dollar of revenue shortfall results in lower benefits. Under Bush's plan, any revenue shortfall is made up by higher taxes.

What you heard was that there are no higher taxes. We will pay for the Social Security changes with reductions of 'government waste'. Ultimately, government waste needs to be eliminated, but those savings go to lowering the deficit not to Social Security. Cutting someone else's government service isn't paying for Social Security. It is essentially a tax increase on that someone else.

and reductions to benefits and pushing back of retirement age

Reduction in SS benefits paid, theoretically covered by an even larger increase paid from the private account.

You have to be careful here because there is no single Bush plan. There must have been 3 or 4 different versions. My article looks at the pure play privatization plan. In a pure play privatization plan, the cost is $10.4 trillion (likely higher). Other plans cut benefits. If we agree to cut the benefits of those people in GenX then the cost will be less. Tell me what is the difference to someone in GenX who pays an extra dollar for the same benefits or the same amount for a dollar of less benefit.

 

[Toro]

Hello!

Would someone please tell Joe that Bush isn't the President!

 

[JoeTheEconomist]

Where is the need for the doubled payroll tax?

The need is created by diverting cash away from Social Security. Let's say I make $100,000, and pay 10% payroll taxes. At the end of the year, $10,000 goes to Social Security. In the Bush plan, 4% goes to my private account and 6% goes to SS. $4,000 is going to my private account. Where does the system get $4,000 to pay retiree benefits? It gets the money from the general fund. Guess who pays the taxes that provide for the subsidy from the general fund - it is the guy who put $4,000 into his personal account.

 

[JoeTheEconomist]

Hello!

Would someone please tell Joe that Bush isn't the President!

If you had read the piece.... it is a retrospective piece that looks at the people who are saying that we missed-out on GWB's visionary plan.

"Given that it has been ten years since George W Bush proposed to save Social Security, someone will reflect on what might have been even though none of his ideas on reform created any traction in Congress. But what if they had?

High school reunions have taught me one thing: The older we get the faster we were. Someone is going to tell you that it was an opportunity missed, and every year the genius lost will get bigger."