Down Market Casts a Pall on Social Security Plan

[Gunit_Sangh]

By RICHARD W. STEVENSON
Published: April 21, 2005

WASHINGTON, April 20 - Markets go up and markets go down. But the slide over the last month on Wall Street is hardly good timing for President Bush, who now finds himself with another issue to explain as he struggles to win over public opinion - and the votes he needs in Congress - for his proposal to add investment accounts to Social Security.

After running up gains early in the year, the Dow Jones industrial average has fallen more than 9 percent in the last six weeks, including a drop of 115 points, or 1.1 percent, on Wednesday.

The decline could prove temporary. But it occurs just as the White House is preparing to begin discussing the politically painful benefits cuts that would be part of any legislation to put the retirement system on sound footing, and the decline could make it that much harder for Mr. Bush to convince workers that the sweetener he has offered them, a chance to divert part of their payroll taxes to stocks and bonds, is a winning proposition.

"The times are not on his side," said Irwin M. Stelzer, a conservative commentator and the director of economic studies at the Hudson Institute, a research organization. "You are seeing a Republican Congress saying to itself, 'He doesn't have to run again.' And the market is working against him."

Rest of article

http://www.nytimes.com/2005/04/21/politics/21memo.html?hp&ex=1114142400&en=6a16960e49554ab9&ei=5094&partner=homepage

[miss_kitty]

1. "Down Market Casts a Pall on Social Security Plan"

good.

[SnowGoose]

2. REALITY Casts a Pall on Social Security Plan

Another, equally true, way of expressing the headline.

[leveymg]

3. I wonder how much of this is cause and effect?

Reality set it. No two trillion dollar injection of SS funds this year, so the party poops.

The economists call it Moral Hazard. It's what happens when the adults enter the room and take away the punchbowl.


:bounce: