Did I say that I supported Bush's plan? NO. Did I say I was against Defense cuts? NO. Did I say I was against tax hikes? NO. I ask a few questions and I get bashed for being a "neocon". Nice. Since the article states that recipients get 15% of the highest 35 years over some low nominal amount - I was merely asking for some clarification. I'm sorry that English isn't my primary language. I supppose I'm a YOF too since I'm Chinese. I don't think you should place any labels on me since you don't know a damn thing about me.
I realize it is a bit tense in the D&D (it has been that way for quite some time), but try not to take it to heart. I agree that too much of the time, the "neo-con" and "commie liberal" tags get thrown around WAY too much around here, but try not to take it too personally. I didn't see your statement as one from a "neo-con," I interpreted it as someone asking for information. We could all take the advice "lighten up Francis" here in the D&D.
langal, I appologize for jumping on you. However, in my defense, you did call yourself a conservative and these days the leap to neocon isn't very far. Plus you did say you like the idea of a personal saving plan...in theory. (it's the practical part of this plan that gets you, however) You also said that you saw you get 15% of your income back. That is partly correct...you get 15% if you earn more than $3,689/month. If you earn less than that, you get more than 15% depending what bracket your in. So I did respond too harshly. Sorry. Can you tell I strongly oppose this plan? BTW, similar to the term liberal...the term "neocon" is not a bad word. Didn't neocon's coin that phrase themselves?
sorry for getting peeved. I have a thin skin since I do consider myself a "conservative" but I'm not really happy with where the Republicans seem to be going. I don't know when it was that conservatives decided to start nation-building. I read that wrong. those dollar figures were per month - i thought they were per YEAR. my bad. That does change the situation a lot. 24-75 percent seems attainable now. I guess that's why I thought non-contributors might also get benefits since I mistakenly thought the benefits were so small. All in all - i do think the SS "scare" is a somewhat phony political issue drudged up by Rove to score votes. I do think there may be a longer term issue with age demographics. in THEORY - I just think it would be cool if SS was a lot simpler and just a mandatory retirement account (3 percent T-bills would be fine).
That's good to hear. I somewhat respect a true conservative perspective. In many ways, I am fiscally conservative myself. But this administration is wayyyyyy of base from that angle. And I hear more and more how he is upsetting his own supporters. I can't disagree with that. Like the tax code in general, simple should be better. But from that end, I don't see how this plan is more simple. SS will still exist, hopefully, so now you would have two accounts to keep up with. You'd still have SS payments after retirement as well as the (quasi)personal acounts. I don't see how that simplifies things. In fact this plan will cost additional billions of dollars in administrative fees...so much so they can't even implement the whole thing in one year. They plan to spread out enrollment over several years so the fees don't overwhelm the system. With the limited info we have received about this, that sounds more complicated...not less.
Greenspan wants to proceed "slowly and test the waters". Is that like a "do over"? Fed: Go Slow on Social Security Accounts Feb 16, 5:08 PM (ET) By MARTIN CRUTSINGER WASHINGTON (AP) - Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to take a go-slow approach in setting up the private Social Security accounts favored by President Bush. The president said he wasn't ruling out taxing high-income workers more to help the retirement program. Bush, who has been stumping across the country for the personal accounts, kept up that effort in New Hampshire. But his comments about levying Social Security taxes on more of big wage-earners' income got the attention. He was asked in an interview whether he would oppose raising the current $90,000 cap on income subject to the Social Security payroll tax. Bush said he remained opposed to boosting the tax rate but left the door open to a possible increase in the amount covered. "The only thing I'm not opened-minded about is raising the payroll tax rate. And all other issues are on the table," Bush said in interview published in the New Haven (Conn.) Register. In Washington, Greenspan lent a respected economic voice to the political debate, saying Congress would be wise to take a cautious approach to setting up personal accounts. He said increased government borrowing would be needed to cover Social Security obligations to current retirees because a portion of the payroll tax would be diverted to the private accounts. "If you're going to move to private accounts, which I approve of, I think you have to do it in a cautious, gradual way," Greenspan, 78, told the Senate Banking Committee, where he was delivering the Fed's semi-annual monetary report to Congress. Bush is proposing allowing workers born after 1949 to covert up to 4 percentage points of their Social Security taxes to personal stock and bond investments. The administration has estimated that the transition costs for the next 10 years would be $754 billion. But critics of the plan have said that vastly understates the true costs, which some estimate in the trillions of dollars. Greenspan said the problem was determining whether the government's increased borrowing needs would push up interest rates, and for that reason he said any changes should proceed "slowly and test the waters." The two sides in the Social Security debate saw different aspects of Greenspan's testimony before the Senate Banking Committee as supporting their approach. Republicans noted that Greenspan said he had long been in favor of setting up private accounts as a way to address Social Security's long-run financing problems. But Democrats said his insistence on a go-slow approach represented a lukewarm endorsement at best for Bush's overhaul effort. "There were lots of caveats," said Sen. Charles Schumer, D-N.Y. "This was not like the ringing endorsement of the tax cuts in 2001." Because of the respect Greenspan commands on Wall Street, his endorsement of an economic proposal is sought by members of both parties. Bush cleared a major hurdle in his drive to enact tax cuts in 2001 when Greenspan endorsed the idea of cutting taxes, arguing at the time that the government's projected budget surpluses were so large that tax cuts were a good idea. Those surpluses never materialized. In his appearance Wednesday, Greenspan did endorse making a major switch in how benefits are calculated for workers when they reach retirement age. Under one of the proposals put forward by Bush's Social Security advisory panel, the level of benefits would be tied to increases in inflation, rather than increases in wages. Currently, retiring workers get about 40 percent of their wages replaced by Social Security. However, switching to an inflation index could cut that amount roughly in half. Greenspan, who in the past has said benefit cuts will have to be part of the solution to Social Security's problems, called the switch in indexing "one of the most effective ways to come to grips with closing the ... gap between expected revenues and expected benefits." All last year, Greenspan used various appearances before Congress to push for action to deal with the impending retirement of 78 million baby boomers, saying the government had promised more than it could deliver not only in Social Security but also in Medicare, where the funding shortfall is even more severe. In 1983, Greenspan chaired a Social Security commission that came up with a compromise plan that raised payroll taxes and trimmed benefits to deal with a funding shortfall the system faced at that time. He said Wednesday that his commission had been successful because he and other panel members had worked closely with then-President Reagan and Democrats in Congress to make sure that whatever was adopted would be acceptable to both parties.
Do you ever wonder why GWB decided just out of the blue to jump on the third rail? right after the last election of his lifetime? If even a small percentage of SS money gets diverted into the private sector it will have a huge impact on the supply and demand balance for equities, more money chasing a limited supply. That would run up prices and exponentially increase the wealth of those who are currently holding the equity issues. Gee who would that be?......I dunno, ah Maybe Satan? (too young to rmember the church lady?) No, it would be the rich people, the brokerages and the financial institutions AKA The power brokers behind the Republican party. What a shock!
Social Security: something's gotta give Social Security reform will involve sacrifice, with or without individual investment accounts. February 17, 2005: 9:36 AM EST By Jeanne Sahadi, CNN/Money senior writer NEW YORK (CNN/Money) – Amid the rancorous debates over adding individual investment accounts to Social Security, a basic fact is often overshadowed. Accounts or no, to make the system solvent long-term, you'll either end up paying more for the benefits promised or you'll receive less of them, or, possibly, both. That is, something's gotta give if the system is to meet the needs of future retirees based on the number of workers there will be to support them. With any proposal for Social Security reform, expect to see measures that reduce the promised benefit payout, either directly or indirectly. Here are some of the options that may be considered: Change the formula for starting benefits: Starting benefits might be reduced if the formula by which they're calculated is changed. One frequently discussed option: Instead of linking -- or indexing, as it is known -- initial Social Security benefits to wage growth, the starting benefits would be indexed to inflation. Since inflation tends to rise less quickly than wages, it's a reduced measure by which to set starting benefits. Provide incentives to work longer: Currently, retirement benefits are calculated based on your 35 highest earning years. That formula may be changed to cover the 40 highest earning years. According to the American Academy of Actuaries, doing so would reduce benefits an average of 3 percent. In general, the shorter your work history, the less advantageous such a change would be. That's because your average earnings over a 35-year period would be higher than if they're measured over a 40-year period. Reduce cost-of-living adjustments: Currently, recipients' benefits are increased every year by a cost of living adjustment (COLA). Under reform, the COLA may be measured differently and adjusted downward. So, for instance, in 2005, retirees received a 2.7 percent bump in their benefits. A retiree receiving a $1,000 monthly benefit in 2004 would have seen an increase in monthly payments of $27. But if the COLA was reduced by, say, half a percentage point, to 2.2 percent, the increase would be $22. Raise the cap on wages subject to the payroll tax: Currently, you and your employer each pay 6.2 percent of your wages into Social Security on the first $90,000 of your wages. Lawmakers may choose to raise that cap or eliminate it entirely. Say they raise the cap to $200,000. Earners at that level or above would pay nearly $7,000 more into the system than they do now. At the $90,000 level, they'd pay in $5,580. At the $200,000 level, they'd pay in $12,400. Raise the payroll tax rate: Instead of the12.4 percent of your wages -- half paid by you, half by your employer -- that goes into Social Security now, Congress could increase that by, say, 1 percentage point. That means you and your employer would each pay in 6.7 percent. So if you make $75,000, you'd pay an additional $375 a year in Social Security tax. The president has said he is opposed to this option. President Bush has said repeatedly this is the one option he would not consider. Raise the retirement age: Congress may choose to increase the retirement age to, say, 70 by a certain year. So if you're going to retire in that year, and you're currently scheduled to be eligible for full retirement benefits at 67, you would be paying the same amount into the system, but receive three years' fewer benefits. Reduce benefits for future retirees: Lawmakers could opt for an across-the-board reduction of promised benefits – say, by 5 percent – for all but current retirees. So, for example, if you're currently promised a benefit of $1,500 a month, you'd get a benefit of $1,425 instead. Tax more of your Social Security benefits in retirement: Right now, a portion of your Social Security benefits are taxed as income if your total income exceeds certain thresholds. For example, if you're married and your income exceeds $32.000, you pay tax on 50 percent of your benefits. If it exceeds $54,000, you pay tax on 85 percent of them. One reform measure might be to eliminate those thresholds so that 85 percent of all benefits would be taxable. Low-income retirees probably would not feel the effect, however, since they would qualify for deductions and exemptions that would negate the tax. And since 85 percent of higher income people's benefits are already subject to income tax, "this will fall mainly on the middle-income area," said Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries.
Nice article. This is the kind of information that we as Americans should be getting. If I hear W give us the same tired rhetoric line about "Americans should be able to have their "nest egg" one more time, then I'm gonna vommit. W's whitehouse website says that his plan is a "Net Zero" plan. In other words, his plan doesn't offer us any financial advantages over the current plan. It only serves to maintain it. If that is the case, why don't we just fix the current plan instead of wasting billions of dollars implementing this new one? If you simply take the billions of he plans on spending to implement this plan and dump it into SS, then the problem is probably solved right there. I know it isn't that easy...I'm just illustrating the point.
GWB has also stopped using the word "crisis" ... Social Security, Medicare not in crisis-Greenspan Thu Feb 17, 2005 12:30 PM ET WASHINGTON, Feb 17 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Thursday he deliberately avoids using the term "crisis" to describe the problems facing Social Security and Medicare because their issues are not imminent. "(Medicare) is a very serious problem. Again, it's got the same characteristics (as Social Security) and I would not use the word crisis because I don't think that that properly identifies what the nature of the problem is," Greenspan said in response to a question from the House of Representatives Financial Services Committee. "Crisis to me usually refers to something which is going to happen tomorrow or is on the edge of going into a very serious change. That is not going to happen in either Social Security or Medicare over the next several years," he said. The Fed chief said a flexible U.S. economic system was vital to foster adjustments in trade imbalances. He also said that while a consumption tax would likely increase savings in America, he doubted such a tax has much support in Congress. © Reuters 2005. All Rights Reserved.
Just quoting myself to illustrate that not all "neocons" or "conservatives" blindly follow the GOP. And now W's admitting it's not as desperate as he painted it.
