More Sharon Angle brillance: Let's privatize SS because Chile's done it

I was thinking about this too - had this actually occurred in 2006-2007, it's very likely that it would have been the single greatest disaster in the history of contemporary U.S. domestic policy.

 

Two comments:

1 Sharron Angle is a piece of work. She's the only possible Republican who could lose to Harry Reid. He needs to go but it would serve the GOP right to lose an easy pick-up for nominating such a pathetic candidate who has no business being in the Senate.

2 I am very disturbed the Dems are going to rely on scare tactics about SS to hammer the GOP until mid-terms. Something needs to be done now (like gradually raising the age of eligibility) but the Dems would rather demagogue the issue instead of offering solutions. Republicans deserve to be punished over it because of their ludicrous notions of privatizing it in the past. Both sides need to take some heat and actually do something smart instead of just chattering and yattering.

 

The only way an age increase could pass is for it not to affect people over 55. Those are the single-issue voters who would sink the whole thing. What makes me angry is this should have happened 8-10 years ago and we'd be on our way but the Dems just want to use it as a campaign issue. This is one reason I wouldn't mind if the GOP took the House. When both sides of the aisle have a stake in success, it's possible to tackle hard issues.

 

You'd think so, but since 1992, we've had 4 years of all-Dem control, 6 years of all-GOP control, and 8 years of split control (both Dem Congress + GOP Pres and GOP Congress + Dem Pres) and none of the combinations have managed to address the issue.

 

So what are you angry about? Sharon calling for "privatization" which is the exact opposite of "socialized" and therefore you whole argument seems rather pointless. Angle is proposing to reduce the influence of government and not increase it as we would under socialized healthcare. Both are not same. You may argue the Chile example and that is fine but the idea of privatizing SS has been around for decades.

That depends entirely on what investments they would have chosen. Again, it should up to each individual to make informed decisions on what investments they would like to purchase. Same holds to true for all retirement plans, 401Ks, etc...

I guess you are still stuck to the idea that people are too damn dumb to make smart decision so therefore the government has the duty and obligation in all righteousness to ever increasingly tax them for benefits they are now guaranteed to never see since SS will go belly up in a few decades. It's matter of choice, some want it in the hands of the people and some want it in the hands of politicians.

 

Of course it does - we already have IRAs, 401ks, etc. There's no point to having another program that does the exact same thing - if that's the goal, just get rid of it entirely.

The point of Social Security is to provide insurance. Unless you're OK with homeless, starving seniors all over the place, letting people invest their SS money still leaves you with the problem of what to do with the people who inevitably do screw it up, which destroys the whole point of the program.

 

The argument for privatization of SS has always been based on the government failing to manage the funds to the point that it has become bankrupt. If the government is going to fail so miserably at managing the money then the investors (the people) are better off keeping their money and doing whatever they wish to do with it. The so-called SS "Trust Fund" is a complete joke which both parties have pillaged and robbed over decades. The program is near the end of its lifetime with a boatload of liabilities and an ever-shrinking pool of contributors. That is why these phony politicians support illegal immigrants because they pay into SS without receiving a single dime. Every single economist, regulator, budget manager agrees that SS is going belly up and its the single most important liability that could choke our government in the future. Yet, very few people are willing to take stand against government mismanaged and plain theft.

I agree privatization may not be the best solution but looking at the extent of government waste, fraud, and abuse in SS system, there is no real alternative. It's a broken system which cannot be solved by more government intervention and taxation. Self-centered politicians cannot be trusted to do the right thing especially if the short-term effects can be negative and unpopular. Sound policy is never really the concern of political hacks looking for reelection the very day they are sworn into office.

 

I agree with this part, though I don't necessarily think they failed to manage the funds. My understanding is that they just buy government bonds - they basically just lend the money to the government at the market interest rates. Not a great return, but not necessarily mismanagement either.

I disagree with this part. If the goal is to provide a safety net, then letting people is not necessarily better than the government not doing much with it.

I don't think the problems are as deep as you do. It's essentially an issue of an imbalance between how much comes and in and how much goes out that is being caused by an aging population. I agree that increasing taxation is not the solution, but the program can be easily fixed by simply changing the amount that goes out - change benefit levels, change age requirements, etc.

I agree with this. I think the solution is fairly simple, though I have no idea when/if anyone will actually commit to it. We got very close in 1997 before the Lewinsky scandal hit ( http://politics.usnews.com/news/blo.../28/how-monica-killed-a-clinton-gingrich-pact ), but who knows when/if we'll get another opportunity.

 

But that is exactly the problem. The Trust Fund is now a liability of the General Fund. On paper SS is a dedicated program with a dedicated tax but with the government spending the excess revenue and issuing IOUs makes it a general budget crisis in the future. This has greater implications if the revenue continues to shrink and benefit payments increase over time. To me the issue is that at some point the government will have to pay for it other than in bonds, either by increasing payroll taxes or other methods such as dipping into the income tax collections to pay for this liability. Medicare is done under the same shady accounting practices of claiming a dedicated trust fund then combining it into general funding and spending all the money only to issue bonds and hope the country doesn't go bankrupt. The bankruptcy is already underway because of this stuff.

Yes a safety net but at what cost? Increasing payroll taxes especially on the working class will lead to more deprivation and poverty. The other favorite leftist solution as always is to "tax the rich and hope that they are too stupid to notice." Neither of these solve the growing problem. This was already tried in the 80s and look where we are today.

I completely agree with changing benefits and age requirements but then that is political suicide by whoever wishes to go up against the vast number of baby boomers nearing retirement. I just don't see the political willpower by either party.

 

I agree with all of this - I think SS is a total mess of a program that needs fundamental reform. I just don't believe privatization is the solution. The result of privatization negates the purpose of the program (providing a safety net) - so if the option is privatization or no SS at all, I'd just prefer the latter because we already have a private solution in the form of IRAs/etc.

If we're going to have a massive program that collects tax revenues and uses it to provide a retirement savings, I'd much prefer it be a true safety net / emergency fund of some sort, rather than something that people can lose through bad investments because the latter still leaves the government responsible for trying to help those people that do screw up.