bush BANKING on rightwingnut stupidity; Social Security

[LynnTheDem]

The White House is now putting the first dollar signs on its plan for gradually phasing out Social Security and replacing it with a system of government-regulated private investment accounts. But an odd parity is emerging in the numbers -- even the highly optimistic ones favored by the White House.

The proponents of phasing out Social Security say we have to get rid of it because the program is "unsustainable", as Scott McClellan said today. Just how much extra funds would be needed and whether those funds would come from borrowing or benefit cuts or new taxes is a matter of debate. But precisely those choices which make Social Security "unsustainable" in a few decades are the ones the White House is happy to make now in order to speed the process of phasing out the Social Security program.

Simply financing the 'transition costs' of phasing out Social Security will cost a good trillion or two dollars, maybe more -- by the White House's own informal estimates.And where on earth are we going to get that money? Borrow it, says the White House. Notta problem.

In other words, we have to start phasing out Social Security now because if we don't we're going to face some big borrowing in a few decades. But we can avoid that horror of horrors by doing some big time borrowing now to finance abolishing Social Security we won't have to face that terrible fate a few decades from now.

http://www.talkingpointsmemo.com/archives/week_2004_12_05.php#004168

And of course the rightwingnuttery will be chattering on about how wonderfully brilliant bush's plan is. Good grief, how do they manage to survive past puberty.

[ayeshahaqqiqa]

1. He may have a fight on his hands

Blanche Lincoln, (D) of Arkansas, has called him on it. I got an email from her yesterday where she says she will fight to keep SS as it is, because Bush's way will bankrupt the system and wind up with SS recipients getting less. Blanche didn't cross Bush much in her first term, but apparently her big win against a rw fundy candidate has given her some courage. Besides, there are lots of SS recipients in her home state. And they are watching what happens.

[teryang]

2. This is the biggest con job of all time

The motivation for this is the coming financial crisis in the private financial markets. They hope to use government revenues to prop up intangible values because the plunge protection team is no longer able to keep up the phony valuations.

[Michael_UK]

3. That seems to be the Bush tactic

Fuck up the economy and the government budget, and then declare that it'll have to cut back on funding of social programs, social security etc. It's been the plan all along. Of course, the military eon't get mentioned or the tax cuts for the wealthy

[ThorsHammer]

23. I've heard the same thing as well; 'where there's smoke there's fire' (nt)

[livvy]

4. Did you see the Op-Ed piece in the NYT?

Paul Krugman had a good piece in the Times today on the SS myth. It seems B&Co are using the same scare tactics they've used so often in the past to get what they want.

December 7, 2004
OP-ED COLUMNIST
Inventing a Crisis
By PAUL KRUGMAN

Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won't do anything to strengthen the system's finances. If anything, it will make things worse. Nonetheless, the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it.


http://www.nytimes.com/2004/12/07/opinion/07krugman.html?th

[newyawker99]

10. Hi livvy!!

Welcome to DU!! :toast:

[lakelly]

15. NYT's article

Really good piece in the NYT. The Bush Admin conning us once again. This time that the Social Security system is in eminent threat of collapse. Just like the US was in eminent threat of attack by Iraq. If you say something over and over again it becomes true. Big sigh.:eyes:

[no_hypocrisy]

5. * expects us and a few generations to finance our prospective poverty

in both youth, adulthood, and old age by increasing our deficit to the point where a future administration can't pull it back in. Forget ever balancing the federal budget. We won't be able to keep up with the interest payments alone. The country will essentially be owned and controlled by whomever owns our Treasury Notes; they may even trump corporate interests.

* is the ultimate reverse Midas: everything he touches, crumbles into dust.

[snippy]

7. "reverse Midas" = Bush's fecal Midas touch. n/t

[jimshoes]

6. How long would the Social Security trust fund last

if they simply put that $2 trillion or more into the fund. 2099, 2199?

[From the south]

8. Consider the long term obligations

since any money put in the "lockbox" would simply be spent that would be a shell game really.

There is no account that has all the SS money in it....its been spent

What Bush is trying to do is reduce the long term obligations.

The total SS obligation right now is over $47 trillion.... the bottom line is there is no money in the SS trust fund.

Privatizing SS is the only way to protect it from being spent

[LynnTheDem]

9. Wrong wrong wrong.

Totally and completely incorrect. And you've totally & completely swallowed the bush bullshit.

[tx_dem41]

11. Yes, yes, we know ALL that.....

You used the right word..."Obligation". That means that the government has committed itself to pay these benefits. These benefits are to go to people that have been paying into the system for up to 45-50 years. In fact, we have been paying into a system that has run up huge surpluses and then had those surpluses turned over disproportionately to the rich through tax cuts.

My questions to you: Why do you want to break commitments (you call them obligations, I call them commitments) that have been made to the people? Why are you seemingly complicit in this robbery, by not even suggesting that the SS system should be taken OFF budget? How are you going to pay the transition costs? How high will mortgage rates be when the government has to borrow 2 trillion dollars extra over the next 10 years?

[From the south]

12. Wait a second

Take a deep breath, of course the government has a obligation to everyone who paid into the system.

Partial privatization should only be for younger workers.

SS needs to be taken off budget.... but the truth is, the federal government cant be trusted with all of that money. Look at the past....they spent the whole SS trust fund.

To me the one good thing about the partial privatization of SS is that the federal government cant spend that money.

Should people be held accountable? sure....but who?

Should it be FDR for setting up a ponzi scheme?

Nixon for putting SS on budget?

The congress during the nixon administration for passing the bill?



The bottom line is....while I dont like Bush either...the SS mess isnt his fault....its been coming for 60 years

[tx_dem41]

13. No one backs your solution....

The Administration is talking about cutting benefits, so they sure are talking about reneging on obligations.

I also find your comment about trusting the Government perplexing, since this Government is run on people financing the debt through Treasury bonds. The first step to trust would be to take this OFF the budget.

And lets not bring FDR into this. This is not a Ponzi scheme if the money had truly gone into a trust fund. And even without the trust fund, this crisis is still very far out. My suggestion, take it OFF budget today. And I will hold every politician who is against that accountable.

As for privatization, the Administration is talking about allowing $1,000 maximum to be invested into private funds. My god, the administrative costs on maintaining $1,000 funds is laughable. Why not just go ahead and reduce the SS rates instead? Instead, you are for basically forced privatization. We will differ on this I guess.

[From the south]

16. A ponzi scheme

A Ponzi scheme, named after Charles Ponzi who defrauded people in the 1920s using the method, involves getting people to invest in something for a guaranteed rate of return and using the money of later investors to pay off the earlier ones.

That doesnt sound like SS? Sure the rate of return is 2%.... but that is SS in a nutshell.

Just because it is government sponsered doesnt change what is is

[tx_dem41]

17. Haven't you just described all taxes

Again, put it OFF-BUDGET.

Are you against SS on principle? Or just its implementation?

[From the south]

21. its implementation

the pay as you go system that is in place now is horrible

[Justitia]

18. you are clueless about Soc Sec

a Ponzi scheme does use money of later investors to pay off earlier ones.

Soc Sec is an INSURANCE TRUST. Working taxpayers of TODAY are paying the Soc Sec recipients of TODAY, not putting away funds as an investment with a rate of return to be realized by themselves as an annuity at a later date.

Rate of return 2%? Where did that come from? Maybe you are referencing the administrative cost of the program which is 2% - the most cost effective gov't program EVER.

Do your homework from something other than RW talking points before you play on DU.

[From the south]

22. if its a trust ....

where is the money, the trust is empty, all of the money is spent.

you should get your facts straight, SS is a trust, that has been systematicly robbed over the last 30 years. The balance on the trust is 0, thats what makes it a ponzi scheme

[Justitia]

24. Egads, you really are even more clueless than I originally thought

I don't know why I am bothering to educate you when you are too lazy to learn it on your own, here are some tidbits for you to research.

YES - SS is an INSURANCE TRUST - look it up
SSA pays out all CURRENT recipients first, from CURRENT revenues

THEN

It invests the remaining revenues into non-transferable gov't securities, from which it pays the dividends to itself. This effectively brings the "surplus" down to ZERO each yr. This is like you paying all your monthly bills first, then using whatever was left to put into savings, leaving your checking account at zero balance.

Once again your "ponzi" RIGHT WING TALKING POINT is completely off the mark and a ridiculous comparison. SS is NOT an investment that pays off as an annuity!!!!!! Why don't you get that? It must be because you don't understand what either a ponzi scheme or an insurance trust is.

I'm begging you - at least google some quick info and educate yourself before you continue to parrot RW lines that make you look ignorant of the subject matter.

[LynnTheDem]

26. Read prior posts by this poster...

A lot of rightwing talking points crop up.

[Justitia]

27. Ah yes, now I see....

Should have done that before.
Before turning blue in the face.
Why won't these people at least google or go to reputable (non-partisan gov't) resources to read up a bit before buying the RW spin hook, line & sinker?

Guess that takes way too much thinking and that can make a person's head hurt huh?

Who knew that simple math and financial accounting could become so political? The politicization of nuts and bolts information makes me sick - it creates so much ignorance and disinformation - but I guess that is the whole point to propaganda....

[livvy]

14. According to the info I've seen there is no crisis

The system is not currently in crisis. Why fix something that isn't broken? I just haven't seen any data that suggests the system needs immediate attention of such a radical nature, especially considering the cost of implementation.

"...The grain of truth in claims of a Social Security crisis is that this tax increase wasn't quite big enough. Projections in a recent report by the Congressional Budget Office (which are probably more realistic than the very cautious projections of the Social Security Administration) say that the trust fund will run out in 2052. The system won't become "bankrupt" at that point; even after the trust fund is gone, Social Security revenues will cover 81 percent of the promised benefits. Still, there is a long-run financing problem..."

From the link in my earlier post.

Thanks for the welcome! I do much more reading than posting, but enjoy the postings very much!

[Justitia]

19. THIS is correct information! -eom

[yankeedem]

20. Simple solution for this manufacturered "crisis"

Repeal the tax cuts for the rich. Oh, * won't consider that? I wonder why.

I am in the middle of reading the book "Perfectly Legal". This is modus operandi to destroy the middle class.

[buddysmellgood]

25. Remember to stay on message. Red Ink Republicans. Always say it. Eom

[Samurai_Writer]

28. I think Bush is blowing this big time

All the conservatives at my work are definitely AGAINST this privatization plan of his. Even the ones who voted for him and even the ones who are the worst type of neo-cons. I have a 65 year old employee who was planning on retiring this year but cannot since his 401Ks are all down the tubes and will have to work several more years. Now with that wonderful Medicare prescription plan and privatizing Social Security, he is complaining he will never be able to retire. Of course, he voted for the idiot.

[LynnTheDem]

29. Inventing A Crisis

Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won't do anything to strengthen the system's finances. If anything, it will make things worse. Nonetheless, the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it.

The report finds that extending the life of the trust fund into the 22nd century, with no change in benefits, would require additional revenues equal to only 0.54 percent of G.D.P. That's less than 3 percent of federal spending - less than we're currently spending in Iraq. And it's only about one-quarter of the revenue lost each year because of President Bush's tax cuts - roughly equal to the fraction of those cuts that goes to people with incomes over $500,000 a year.

http://www.nytimes.com/2004/12/07/opinion/07krugman.html?oref=login

But hey, bush says hell with that; let's enrich the investor companies, screw the poor & middle class (again...some more...) and put the US another $1-4 TRILLION dollars in debt.

WAKE UP AMERICA, YOU'RE BEING CONNED.