The Flat Earthers Come to Washington
By Erick Posted in Democrats — Comments (11) / Email this page » / Leave a comment »
Social Security is to the media and Democrats the opposite of homelessness. When Democrats are in charge, social security needs saving and homelessness does not exist. When Republicans are in charge, social security suddenly becomes solvent and the homeless overflow into the streets. Unfortunately for all of us, the light at the end of the social security tunnel is not the sun, but a fast approaching train.
In 1998, after announcing in his State of the Union address that the government must "save social security first," then President Bill Clinton went on a campaign to promote just that.
On July 27, 1998, speaking to a group in Albuquerque, NM via satellite, the President said,
Read on . . .
I believe strongly that we must set aside every penny of any budget surplus until we have saved Social Security first.
Fiscal responsibility gave us our strong economy. Fiscal irresponsibility would put it at risk. And whether we save Social Security first I will not be moved, but on how we save Social Security -- that will require us to have open minds and generous spirits. It will require listening and learning and looking for the best ideas wherever they may be. We simply must put progress ahead of partisanship.
The stakes couldn't be higher. For 60 years, Social Security has reflected our deepest values -- the duties we owe to our parents, to each other and to our children. Today, 44 million Americans depend upon Social Security. For two-thirds of our seniors it is the main source of income. And nearly one in three beneficiaries are not retirees, for Social Security is also a life insurance policy and a disability policy, along with being a rock-solid guarantee of support in old age.
Today, Social Security is sound, but a demographic crisis is looming. By 2030, there will be twice as many elderly as there are today, with only two people working for every person drawing Social Security. After 2032, contributions from payroll taxes will only cover 75 cents on the dollar of current benefits. So we must act, and act now, to save Social Security.
In his talk the President even explored the option of private accounts and spoke about both pros and cons. He concluded his talk by saying, "I think we have to reform Social Security in a way that makes it viable and available for the baby boom generation when all of us get into retirement age, and it doesn't bankrupt our children or our children's ability to raise our grandchildren."
Two months later, while attacking the Republicans over a tax plan, the President said
My plan also provides tax relief to families while preserving the strength of the Social Security system. That is very important. When all the baby boomers retire there will only be about two people working for every person drawing Social Security. We can make moderate changes now and make sure that those who retire will be able to retire in dignity, without imposing on, burdening or lowering the standard of living of their children and grandchildren.
In November of 1998, the President spoke a day after a November election that saw the Democrats make gains in the House of Representatives. President Clinton, at that time, said
Now that the election is over, it is time to put politics aside and once again focus clearly on the people's business. In yesterday's election I think the message the American people sent was loud and clear: We want progress over partisanship, and unity over division. We should address our country's great challenges. Above all, now we must address the challenge to save Social Security for the 21st century.
So, what happened?
Now the Dems say there is no crisis and
Not only is Social Security not in crisis, it is as financially sound as ever, according to the liberal Center for Economic and Policy Research, run by Mark Weisbrot and Dean Baker, coauthors of "Social Security: The Phony Crisis."
Matthew Yglesias, writing over at thinking peace, wrote
ntil very recently, I believed, as most of my generation still does, that Social Security was facing a crisis. Thanks to a declining birthrate and increasing longevity, at some point during my lifetime the program was going to go bankrupt and people my age were going to wind up with nothing after a lifetime of payroll taxes. I was -- and the bulk of young people still are -- the victim of a massive fraud, perpetrated by Social Security abolition advocates and unfortunately re-enforced from time to time by liberals seeking an argument against Republican tax cuts. This fraud, which is ongoing and in which a lazy media has been complicit, is crucial to understanding the politics of Social Security.. . . .
Social Security is healthy and successful. There is no crisis. The president and the Republicans in Congress are trying to scare the American people in order to destroy the most successful program in American history -- a program that presidents from Franklin Delano Roosevelt to Harry Truman to Richard Nixon to Ronald Reagan to Bill Clinton have been committed to preserving.
I guess this is a liberal finally admitting that Bill Clinton was a liar! How did the Republicans make the problem that Clinton saw so plainly disappear?
The fact is there is no crisis. That is the point. The Republicans, and Clinton at the time, are trying to prevent a crisis everyone sees on the horizon, except the flat earth types who deny the existence of the problem, not to mention the horizon.
The problems social security has are not going away. Democrats, when they were in the White House, sounded serious about solving the problem before it became a crisis. President Clinton was even willing to consider private accounts.
The Democrats have ceded responsible leadership to the party in power. In addition to being overly shrill on the war, they have now decided to cry "flat earth" at social security too. As the world spins around and the horizon draws closer, the Dems are willing to stake political ground on denying the existence of reality and, if they are successful, will within about forty years send this country into an unimaginable crisis.
« Corrupt Democrat Watch, July 10 Edition, Part One — Comments (20) | The sincerest form of flattery — Comments (5) »
The Flat Earthers Come to Washington 11 Comments (0 topical, 11 editorial, 0 hidden) Post a comment »
The libs have really abdicated having any say in this fight by harping on supposed lies and misrepresentations rather than on the merits of the plan itself. This is not true of course of all the lefties, but for the most part their insistence on impugning the integrity of their opponents instead of having a rational discussion of the issues - a la Iraq - is shameful and leaves them stranded outside the public policy debate.
First, note that Clinton said the trust fund would (according to the projections of the time) run out in 2032, but the current pessimistic projection says the trust fund is fine until 2042. It's hard to see a crisis if we never get any closer to the time when the trust fund runs out.
Second, making the trust fund work as a trust fund means setting aside the money as a budget surplus so the country has the debt capacity to cover the baby boomer bulge. Bush's plan reduces our debt capacity by making the budget deficits greater.
Third, according to the CBO, Bush's plan makes Social Security less solvent for the next 45 years since the transition costs would be $15 trillion ($2 trillion is just the first decade). Thus, his plan is not one to deal with a crisis - it's just a plan to change the system.
In 2001, because Social Security receipts were running (as planned in the 80s under Reagan) way ahead of receipts, to meet the planned retirement of baby boomers, we were running massive budget surpluses. As a conservative Republican, I voted for the man who seemed to be most likely to use those surpluses to pay down the national debt and restore our finances to some semblance of sanity.
Is there a crisis in 2005? You bet your sweet patooty. Is it because of some feckless Democrats? Is it driven by some flaw in Social Security. No.
Here, I have to depart from many RS posters and suggest that, regrettably, if there is a crisis it's because of the party which has controlled the Congress and the White House for the last few years. I'm still a member of that party. But increasingly it's becoming more inexplicable why.
Oh, plus, I live in Oregon, where Enron is not just a fightin' word, it's a good word to use if you want some newly-impoverished PGE line worker to delay trimming the trees near your powerline. Anybody here remember the connection between Kenny Boy Lay and the President? Anyone?
I'm 27 years old, and I'm paying into a system that might not even be there when I retire. I'm told that I'm unnecessarily concerned because the system should be OK until 2042 or 2052.
Am I missing something? When I do addition, I figure that I'm only going to be about 65 in 2042 and 75 in 2052. So, yeah, it's a problem.
And folks who quibble over whether we should use "crisis" or "problem" are demonstrating their inability to view this as anything other than merely a political issue.
If the Social Security program is not there, it will be because it was abolished. When the program uses up its surplus in about 40 years, the current law would require it to cut benefits in order to pay them at a continuously sustainable rate. This benefit cut would be roughly one-third from the wage-adjusted rate in effect at the time. Based on current projections that wage-adjusted rates will continue to increase at roughly one percent per year faster than inflation, so the cut in benefits would leave Social Security payments at today's level, adjusted for inflation.
Now, I don't think it is wise to set up a system that will give us a cut of that magnitude, so I support modest changes in benefits and retirement age that will affect boomers like me, so no cut will have to happen.
Until we have an actual proposal about PRAs, we cannot assume that they will solve this problem or make it worse. Nothing about PRAs will inherently help or hinder Social Security. It will all come down to the implementation.
Is that the people throwing that around will be dead and don't care much about your life thereafter.
In reverse order:
- (and as a quick answer to Amos' question, above) There is, as yet, no plan for CBO to score. Their numbers are therefore, at best, suspect.
- To suggest that Congress (any Congress) or the President (any President) is going to keep trillions of $$ sitting around unspent so that, long after they are all dead, you and I may get our money back from SS plus maybe 1.5% is fantasy.
- These people can't even predict with any certainty (to within 5%) what next years' revenue numbers will look like - so either number (2032 or 2042) is pure nonsense.
The fundamental problem with all the "everything's fine" arguments of the opponents of SS reform is that, precisely, everything is not fine. The program, as designed, will go broke - it's only a matter of when. I somehow doubt that any regulator would let a private pension system be so designed (it's likely that the managers of such a private system would have been "perp-walked" out of their fancy Wall Street offices by now).
So why are we willing to live with such a system that extracts 12.4% of our pay every week without our consent? Because changing a program that hasn't seen a substantial revision since 1939 (other than the twice-generational tax increases) is too hard? Because people are afraid that Heaven Forbid! a Republican fix this problem?
I don't know that the partial privatization of the SS system is the right way to go. Personally, I think that privatization is like circumcision (either do it all the way, or don't do it at all) - and would advocate a more-or-less full privatization (a la Chile). It cannot be worse than the current system - and we should be willing to pay for the transition costs from current revenues because we've all shared in the "benefit" from the theft of the so-called "trust fund" over the years.
But to pass this off with happy-talk that "everything is fine" is crazy. Sure, Medicare is going to bankrupt us first (thanks for the free drugs, GWB). But there are things outside the program (such as malpractice reform) that could make the Medicare/caid problems nearly manageable. SS has no such external impactor because it is designed to run out of money.
In regard to #3, the analysis was based on "Plan 2" IIRC, which is what Bush was expected to propose. We might be in the middle of some trial ballooning, which is not going well for Bush, so maybe he will propose something completely different.
For #2, Congress and the President were saving the surplus before Bush came along.
As for the projections, it's the best information we have, and although the date when the surplus is drained (or even if it drains at all) is definitely moving back. The length of time until there is a problem and the inaccuracy of projections is a good reason to wait and make minor corrections later.
So why are we willing to live with such a system that extracts 12.4% of our pay every week without our consent?
The people do consent through their votes, as I'm sure the GOP would find out if they tried to do away with Social Security. People consent because they don't want to have to worry about living too long and running out of money. People also see moral value in not letting the elderly die in poverty.
It cannot be worse than the current system - and we should be willing to pay for the transition costs from current revenues because we've all shared in the "benefit" from the theft of the so-called "trust fund" over the years.
Paying for the transition costs would be a good idea, but I wouldn't look to Chile as a shining example of the benefits of privatization:
For all the program's success in economic terms, the government continues to direct billions of dollars to a safety net for those whose contributions were not large enough to ensure even a minimum pension approaching $140 a month. Many others - because they earned much of their income in the underground economy, are self-employed, or work only seasonally - remain outside the system altogether. Combined, those groups constitute roughly half the Chilean labor force. Only half of workers are captured by the system.
Even many middle-class workers who contributed regularly are finding that their private accounts - burdened with hidden fees that may have soaked up as much as a third of their original investment - are failing to deliver as much in benefits as they would have received if they had stayed in the old system.
IIRC Plan 2 is still not a plan - it is an outline. As we all know, the devil is in the details.
For #2, Congress and the President were saving the surplus before Bush came along.
Hogwash. The surplus money was invested in US Treasures (adding to the national debt) - in essence, "loaned" to the government - and promptly spent (or used to make the actual deficit look like a surplus). These "surpluses" went away with the recession, 9/11 and GWB's spending orgy.
...as I'm sure the GOP would find out if they tried to do away with Social Security.
Who in Hell's Name is proposing that Social Security be done away with?
Chile is a 3rd- (or 4th-) world country. The opinions of Pravda on the Hudson notwithstanding, I believe the fact that they can cover the majority of their people with a predominantly private national pension system (while every socialized pension system in the world is either going broke or already there) speaks well for privatization in general. You're welcome to believe we would be unable to improve on their experience - I'm a tad more optimistic than that.
Cheers.
I'm at a loss for how the pay as you go regime continues to work when there are fewer workers supporting more, better-subsidized, freaking undying retirees. Unless we raise taxes. Yup. That always works.