I have a quick question that maybe someone can answer. These so called personal investment accounts, according to Bush are voluntary. And according to estimates, someone's SS benefits will be cut up to 40% in order to enact these voluntary accounts. So does that mean if I decide not to have one of these personal accounts and just keep my SS, will I still have my benefits cut by 40%? In other words, they're not really voluntary if you want to recoup the lost 40%. right?
National debt is not the same as SS, having some national debt is not a bad thing (of course, hugh amount of debt is not good). But again, it does not need to be net positive.
Details at this level are TBD. Other quality questions: Person A invests his SS personal account monies in treasuries. Person B invests his SS personal account monies in Enron.com. What will be the benefits each will receive? Does the government make up for Person B's bad investment decisions? Will more retirees be forced into getting Welfare assistance (they still get their retirement monies from the government just different sources)? and finally Will there be an honest and in-depth discussion about the proposed SS fixes with the general public before Congress votes?
The SS surplus, Saddam's WMD, and OBL are reportly hiding out in Afghani caves. The SS surplus is a HUGE lie, along with calling SS "an insurance" program, for which the Democrats ar primarily responsible.
According to Krugman, who is seldom rebutted, though they love to cry about him, the whole government now takes in 68% of what it is now spending. When Bush tried to claim the ss system is "bankrupt" it will be taking in 75% of what it would be spending if it paid IN FULL. Also according to Krugman, 45 billion a year would make Social Security solovent for at least 75 years. That is approximately 1/4 of the money Bush just gave back in tax breaks primarily to the wealthy. (Never forget that Bush himself admitted this, according to Secretary O'Neal his own tTreasury Secretary). Of course he just asked for $80 billin ore for Iraq. Bush wants the system to fail, so he can have an argument for privatizing it. It is just that simple. The Repubs voted against the system when it was first approved in approx 1935, they have always been against it, and when they get cocky they try to get rid of it.
The whole Opraesque little scene with Laura Bush, the poor US women whose son Bush sent to Iraq to die, and the Iraqi woman, engaging in a group hug was propaganda. Not worthy of the State of the Union. Makes us look like fools who are into cheap media thrills.
Yeah, what the hell was that fool thinking? I mean, just because she just voted in an election for the first time in over 50 years, that doesn't give her the right to actually be HAPPY. Even though she's from there, she clearly doesn't "get it" as far as what's really going on in Iraq. She is supposed to hate us and view us as occupiers. Hasn't she been reading the blogs? What a "childish idiot"...
He's the glynch who stole Groundhog's day! sort of. Come to think of it, the movie Groundhog's Day is an apt metaphor for trumped up crises and misleading facts are spun to the public by the bush administration...happens again and again.
Maybe there should be a SS thread. But this article in the WaPo is very interesting... The Plan Participants Would Forfeit Part of Accounts' Profits By Jonathan Weisman Washington Post Staff Writer Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system. The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement. "You'll be able to pass along the money that accumulates in your personal account, if you wish, to your children . . . or grandchildren," Bush said last night. "And best of all, the money in the account is yours, and the government can never take it away." The plan is more complicated. Under the proposal, workers could invest as much as 4 percent of their wages subject to Social Security taxation in a limited assortment of stock, bond and mixed-investment funds. But the government would keep and administer that money. Upon retirement, workers would then be given any money that exceeded inflation-adjusted gains over 3 percent. That money would augment a guaranteed Social Security benefit that would be reduced by a still-undetermined amount from the currently promised benefit. In effect, the accounts would work more like a loan from the government, to be paid back upon retirement at an inflation-adjusted 3 percent interest rate -- the interest the money would have earned if it had been invested in Treasury bonds, said Peter R. Orszag, a Social Security analyst at the Brookings Institution and a former Clinton White House economist. "I believe you should be able to set aside part of that money in your own retirement account so you can build a nest egg for your own future," Bush said in his speech. Orszag retorted: "It's not a nest egg. It's a loan." Under the system, the gains may be minimal. The Social Security Administration, in projecting benefits under a partially privatized system, assumes a 4.6 percent rate of return above inflation. The Congressional Budget Office, Capitol Hill's official scorekeeper, assumes 3.3 percent gains. If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's. With a 4.6 percent average gain over inflation, the government keeps more than 70 percent. With the CBO's 3.3 percent rate, the worker is left with nothing but the guaranteed benefit. If instead, workers decide to stay in the traditional system, they would receive the benefit that Social Security could pay out of payroll taxes still flowing into the system, the official said. Which option would be best is still unclear because the White House has yet to propose how severely guaranteed benefits would be cut for those with individual accounts. The administration official explained that the "benefit offset" merely ensures that those who choose personal accounts are not given an unfair advantage over the traditional system. "In return for the opportunity to get the benefits from the personal account, the person forgoes a certain amount of benefits from the traditional system," the official told reporters. "Basically, the net effect on an individual's benefits would be zero if his personal account earned a 3 percent real rate of return. To the extent that his personal account gets a higher rate of return, his net benefit would increase." Robert Pozen, a Massachusetts investment executive who served on the president's Social Security Commission, said the mechanism makes sense. Workers who draw money out of the Social Security system for their accounts should have to pay that money back with interest. But critics of the Bush plan said the proposed "claw back" renders the whole idea of "personal retirement accounts" virtually meaningless. Indeed, the system would ultimately look something like a proposal made by President Bill Clinton, in which the government would have invested Social Security taxes in the stock market. That idea was criticized by conservatives because the federal government could end up choosing winners and losers in the financial markets. But under the Bush system, the government is still choosing the stocks and bonds to be bought with Social Security money, said Jason Furman, a former Clinton administration economist. Individuals would get a limited choice, and the government would still keep most of the returns. "They hope people will think they will take on these accounts and after 40 years, they'll have this huge windfall, but that won't happen," said Dean Baker, co-director of the liberal Center for Economic and Policy Research. "I think they're trying to confuse people." Stephen Moore, a conservative supporter of Bush's Social Security effort, said the mechanism would undermine the president's notion of an "ownership society." In a nod to lawmakers worried about the budget deficit, the White House will also hold down the initial cost of the Social Security plan by phasing it in over three years, beginning in 2009. The administration official said funding the individual accounts would cost $754 billion through 2015. But because of the phase-in, the personal-accounts system would not be fully effective until 2011. In its first 10 years, 2009 to 2018, the system would cost more than $1 trillion, Furman said. Between 2019 and 2028, the cost would jump to about $3.5 trillion, he said. http://www.washingtonpost.com/wp-dyn/articles/A59136-2005Feb2.html
When in doubt, scream Enron. Or maybe Halliburton! Weak analysis. by the way... "Enron.com"? 'nuff said.
That idea was criticized by conservatives because the federal government could end up choosing winners and losers in the financial markets. But under the Bush system, the government is still choosing the stocks and bonds to be bought with Social Security money, said Jason Furman, a former Clinton administration economist. Individuals would get a limited choice, and the government would still keep most of the returns. There is investment risk in stocks and bonds. As an example, five years before you retire you could shift all of SS monies into bonds which are "safer" than stocks. If there is a steep rise in interest rates, you could lose serious money, which would reduce your project SS benefit. The way SS currently works is like a pension plan, at least on the payout side since SS is currently pay-as-you-go on the payin side. Traditional pension plans provide a "defined benefit" based on some multi-year compensation formula. Sound familiar? SS currently pays such a defined benefit. The investment risk in a pension plan is borne by the employer. The other type of qualified retirement plans offered by employers is a "defined compensation" plans, which are the 401K and profit sharing plans. The employee here bears all of the investment risk. What GWB is trying to do is to morph a pension plan into a contribution plan. The first step of the change leaves SS on the fence as part pension, part defined contribution. The prez's plan is to reduce the pension benefits while allowing the personal accounts to offset the difference. But what if the individual invests poorly and does not make up the difference? bigtexxx, there is the analysis you craved and the question I originally asked.
?!? I take it you believe that Fox news is the only one with the straight goods and the rest of the world has all succumbed to some kind of pinko, commie conspiracy? Trying to suggest that the Guardian some kind of extreme left publication is not a great way to enhance your own credibility, to say the least.
It's a fact that the Guardian is an extreme left-leaning, Bush-hating publication. This has been discussed and proven on this very board in several discussion threads. Go look them up and educate yourself. Thanks in advance!
According to Krugman, ... The problem that needs to be addressed is that the ratio of workers to retirees is changing. In the next 50 years or so there will less workers per each retiree. How does the president's plan address this fundamental problem? It does not. The solution is to end the pay-as-you-go nonsense.
