Stop worrying about fuel prices, the economy, and politics for a second...

We can print monopoly money for wars and failing banks but not for Social Security and Medicare.

Don't forget that the Dems plans cost trillions! Trillions!!!!111

 

This is an annual event from the Bush administration designed to scare folks into going along with the privatization of SS. It hasn't worked so far and it is to be hoped that it will not work in the future. Not to say there aren't some issues with SS, but considering everything else in your title, it's in good shape.

 

If we put three trillion dollars into SS and Medicare, what would happen?

 

Please get your head out of the sand. According to David Walker, former Comptroller General, Medicare will be bankrupt in 2019 and Social Security will be bankrupt in 2041. If that's "in good shape", I'd hate to see what you call a problem.

The most important issue facing the country is debt and deficit, and this is one of its effects. Too bad that the remaining Presidential candidates all want to make it worse. Conservatism will win out in the end. Whether by choice or by necessity, it will win.

 

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The reality is that no politician has the guts to do what is necessary. Either party's solution is a patch solution at best. You really have to do 3 things in combination to make it more palatable - raise taxes, raise retirement age, lower benefits.

While private accounts may seem scary to people that have limited experience with the market, at the end of the day, nothing has been better over the long term than being invested in the market. The scary part is that most people are inexperienced, not too financially savvy (see this board most of the time! zing!), or may try to take excess risks. I think if the program was properly designed to account for these issues, it would be a good thing.

Currently, social security is effectively invested in US treasuries. Maybe instead of having individuals invested, the private investment should be at the US govt level. Again, not something that can be exploited (ie, someone in the government deciding to invest in Company X or Sector Y), but maybe the government just holds S&P 500 shares for 5% of its holdings, etc.

 

One more thing: Having the government invest would be no different than say how CalPERS (California Public Employees Retirement System or something like that) or any other private pension fund does, so its not uncharted waters.

 

The goverment has never ending printing press and army so why worry about that.

 

My head's out of the sand, thanks.

Medicaid is a different animal... because it's being driven by health care costs.

The 2041 number is the most pessimistic number assuming absolutely nothing is done.

Krugman last November:

Krugman today:

 

Raise taxes - Are you insane? At what level of taxation (especially the middle class) is it finally enough? A significant raise in taxes right now would crush whatever is left of the economy.

Raise retirement age - OK. I would prefer not to, but if it needs to be done, it's ok.

Lower benefits - This assumes that benefits are too high. I have clients who depend on SS for their income. They bring in a whopping $1200 per month. If you lower the benefits, you are going to have to increase wellfare.

One thing that I believe needs to be done is to actually police applications for SS disability. I have had several clients who are approved for 100% disability in their early 40s for diabetes. I can tell you that, while they were morbidly obese, they were far from being unable to work.

If you cut out those who can physically work out of SSI, you can start to address the problem in a meaningful way.

 

rimrocker,

Krugman's being purposefully obtuse. He knows better and is ignoring it. His economic knowledge is getting back-burnered for his Progressive ideology. Congress can cut an awful lot of the Federal Budget at will. We can cut military spending, education spending, transportation spending, National Park spending, most foreign aid, and just about anything else. Three things that are much, much harder to cut are Social Security, Medicare, and interest on the National Debt. If you'll read David Walker's entire summary, you'll see that without major overhaul of government, we will get dangerously close to those being our entire government expense, and after that, it'll just be interest on the national debt.

 

We should invest our Social Security and Medicare in the market. Who is more stable than the US government? Why, none other than the markets, of course!

 

You confuse the issues... again, Medicare and SS are different. SS is solvent until under the worst case with nothing done, 2041. Medicare is crumbling before our eyes due to health care costs. The priority should be (and I think we both agree on this, even though we're arguing): Budgetary discipline and health care costs. As long as we keep spending like the current administration has, we'll be in trouble and as long as we have a health care system funded the way it currently is, we'll be in trouble. Once you get those things fixed, you go and see what effect that has on SS and other issues, and then fix them if it is needed. Again, I'm not arguing SS is perfect. But it's a heck of a lot better than what anyone's come up with to replace it and it's in good shape given the scope of our immediate problems.

 

That's a joke, right?

 

Yeah its not Bush thats spending cash, its that darn 2006 Democratic congress.

Signed,
Medicare Prescription Drug, Improvement, and Modernization Act of 2003

 

Over the long term, the markets are the ideal way to go. In fact, you could argue that the Soc Sec Trust fund has a longer investment horizon than anyone as they are basically can hold a portion of their portfolio in the S&P 500 forever and not have to worry about year over year market fluctuations.

Is the market volatile in the short term? Obviously. But look at a 10 year period or 20 year period. Now imagine that the US was to invest for a 30 year period, say to 2038. Surely the S&P 500 in 30 years from now will see growth of over the 30 year bond.

And if investments are for only the long term, to say that its too volatile for the Soc Sec Fund is basically saying no one should own stocks.

 

Maybe we should stop Borrowing from the Social Security . . . and then it woudl be ok.

http://www.cnn.com/2004/ALLPOLITICS/12/06/social.security.reform/
http://www.washingtonpost.com/wp-dyn/articles/A5525-2004Nov22.html

Rocket River

 

We've already borrowed almost 2 trillion from the SS funds.

We will continue to raid the SS fund and this is the real dagger in the heart.

The trust funds hold about 1.7 trillion in treasury bonds. Guess that is only going up. The more we borrow from these funds the sooner we all start planting gardens.

If you are borrowing money to run the govt., fight a war, and fund SS and Medicare then you probably aren't going to be economically solvent for the long term.

It's sad to me that not one presidential candidate cares enough about America to have a plan to stop the borrowing and spending. Every candidate wants to tell everyone how they are going to spend more money and save the world; but they don't mention that they are going to have to borrow money to do it.

We are a dumbed down people. Myself included.