I personlly don't mind the idea of allowing workers to voluntarily divert some of their SS withholdings into private investment accounts. I'm much more concerned with the way both parties have plundered the SS trust fund, essentially merging it with the general fund in order to mask the true size of the budget deficit. Then Greenspan comes along and says, "Ya know, Social Security has become unaffordable, so we better start paring it down." It would have ample funds for at least the next 50 years if we left the current SS surplus in place to weather the coming baby boomer retirement era. Of course, that would force us to make painful decisions about taxes and spending to bring the general budget under control, and few (if any) politicians are willing to do this.
Oh great, now Bush is going to put senior citizens out on the streets. I guess that's compassionate conservatism.
Last I checked, there was a HUGE surplus during the Clinton administration, more than capable of covering the costs associated with Social Security. Instead of riding that wave and continuing taxes at those rates and using the surplus to create jobs and hence more tax income to restore losses, what does dubya do? Initiates a reckless tax cut that did very little to stimulate the economy in the short term, as well as create the largest deficit in the nations history whereby all 50 states were bankrupt at the same time in US history. Throw-in an ill-planned and reckless war at an additional enormous cost and you've got an even greater problem. Let's see what else, giving tax breaks to corporations that outsource jobs oversees causing the loss of 2.1 million manufacturing jobs that will not come back very quickly if ever, at the same time further increasing our ridiculous ratio of 3 to 1 importing to exporting of consumer goods. This isn't rocket science people!!!
Actually, there was never a true budget surplus. Social Security and Medicare are supposed to be self-funding programs, independent of the general budget. By themselves, these programs are running surpluses, which have been siphoned off into the general fund to disguise the massive budget deficit.
There was a massive budget surplus in terms of an anual basis, which should've been used to create jobs and pay down the general fund's deficit. Instead that surplus partly returned to the people under the guise of low interest rates, assuming that all this money would be spent and the rest of it spent on a far too costly war. Lower income citizens did spend, but the wealthy (where the largest amount of dollars went) did not, they've been weathering the storm until the interest rates started to come back up in recent months. Assuming that this would change, the current administration has continued to syphon off additional money from these social programs into the general fund - not smart. Bush's plan hasn't been that different than Reagan's. I would have figured that the people would recognize that trickle down economics (the republican business model) does not work following the debacle of the 80's. If something isn't done immediately to right this wrong before the baby boomers do retire, this country will experience major economic disaster. Some would argue that we alreayd are experiencing it. I won't go this far, but I'm not blind to the fact that we are on the wrong track.
I'm not defending Bush's tax policy. The budget was in much better shape under Clinton, but there was no real surplus in the general fund. A "surplus" was only achieved by merging funds collected through payroll and income taxes into one pot of money.
I hope America privatizes Bush. http://www.brillig.com/debt_clock/ http://www.cnn.com/2000/ALLPOLITICS/stories/05/01/clinton.debt/ Clinton announces record payment on national debt By John King/CNN May 1, 2000 Web posted at: 5:13 p.m. EDT (2113 GMT) WASHINGTON (CNN) - President Bill Clinton said Monday that the United States would pay off $216 billion in debt this year, bringing to $355 billion the amount of the nation's debt paid down in the three years since the government balanced the budget and began running surpluses. $216 billion payment represented the largest debt paydown in American history, and he said that the federal government's long-term debt is now $2.4 trillion lower than projected to be when he first took office. However, the U.S. government still has a long way to go before it pays down the entire national debt, which now stands at $5.7 trillion. We should take advantage of this historic opportunity to use the benefits of debt reduction to extend the life of Social Security and Medicare and pay off the entire national debt by 2013 for the first time since Andrew Jackson was president," Clinton said.
What's wrong with privatizing SS? Hell you would get a ton more money from it. You could probably live with maybe a good 10,000+ a year if you put your SS money into a private fund. But people are too stupid to balance thier own checkbooks so i doubt they could manage something like that.
Here's why: 1. Growth of the economy will most likely slow down in coming decades as fewer young people enter the work force and the numerous baby boomers retire. That is why, the SSA says that Social Security system will be unable to pay full benefits 34 years from now. Over the long run, stock prices rise in relation to corporate profits. And profits grow in proportion to growth in the economy. A slow-growing economy means that stock prices will rise more slowly than in the past. 2. The transition to a privatized system is costly, since no one advocates ignoring the pensions earned by those already retired or by those who have paid substantial amounts of payroll taxes and are still working. So younger people will fork out the cost of the present mostly pay-as-you-go system and will need to set aside enough money in a privatized plan to provide themselves a good pension. To deal with this problem, most privatization plans call for cuts in Social Security benefits. They assume the private portfolio will offset that loss. A favorite suggestion is delaying normal retirement for Social Security to age 70. 3. Investment in stocks is more risky. For long periods, the return can be less than the 75-year average. The return on the S& P's 500 index was 3.6 percent a year from 1936 to 1951, 10 percent from 1952 to 1966, 3.4 percent from 1967 to 1981, and 12.3 percent from 1982 to 1996. Moreover, in real life, average means some get less than average returns, some more. 4. Administrative costs would eat into the return on privatized plans. These run about 1 percent a year on mutual funds in the United States. Setting up 148 million new accounts would be "a massive task," involving substantial start-up costs.
