To be blunt the White House has done a terrible job so far of selling Personal Savings Accounts. The president's attempts at persuasion have been uninspiring and his constant assertion that he is "open to all good ideas" has prevented him and Republicans from taking control of the issue. It comes to no surprise that support for the president's proposals have been stagnant in the polls. The lack of public support has scared off a few weak-kneed Republicans and seriously put into question whether the president and Republican leadership on the hill will be able to get anything done.
During his prime-time press conference tonight however, the president gave the best defense of PSAs that I have heard him give so far. Instead of focusing on the usual boring details that he has been emphasizing until now, he stressed that the current Social Security system is unfair, and he rightly asked why the wealthy should be the only ones to own their own assets. He stressed that it should be every American's right to own their own assets and be able to create a nest egg that they will be able to pass unto their children and grandchildren. He then pointed out how under the current system the rate of return is minimal and if you die at an early age all the money you have paid into the system simply disappears.
But than the president made the remark of the night, and found himself the standard by which he should sell PSAs to the American public from this point forward. He summed up the whole debate by saying that today's system is unfair and that PSAs are simply a "better deal". Whenever he makes a speech in support of PSAs now that should be how he describes them, as a better deal. Just as Franklin Roosevelt's initiatives were called "The New Deal", the plan to not only create PSAs, but also to reform the tax code, deliver tort reform, etc. should be part of George W. Bush's "Better Deal".
By using the ideals he laid out in that one answer tonight as the centerpiece of his salesman job to the American people, all under the title of "The Better Deal", the president can finally move the ball on reforming Social Security permanently and creating PSAs, which will give those with the least wealth among us to own assets and create a better future for they and their posterity that the current system doesn't provide for. If Democrats really claim that they are looking out for the underprivileged than this is their time to prove it. If the president and the White House do their job in ramping up support for PSAs, than the party of obstruction will no longer be able to simply ground themselves in concrete and block the president's initiatives.
Bush: There will be a safe investment program that includes only U.S. Treasury Bills, which are backed by the full weight of the U.S. Government.
ReplyDelete...unless they are in the Social Security Trust Fund.
Then they're just worthless IOUs in file cabinets.
Maybe no one trusts him with Social Security because he won't tell the truth about what the government owes to the current system. If he stops peddling BS and just says that the SS system has problems but they won't become acute for another 30 years, we'd all be willing to listen to his ideas. The "sky is falling" rhetoric just doesn't hold water.
That proposal was just for you liberals out there who have been arguing that it is a safer bet to put your money into the government rather than the stock market. As for me, I'm taking my money and putting it into the stock market, where congress can't touch it and where I can get much greater returns and build some wealth for myself.
ReplyDeleteAnd he's never said the sky is falling, what he has been arguing is that we should act now before it ever gets to that point.
Why don't you take your money and put it in the stock market and earn that greater rate of return...tomorrow. Yes, on Friday, April 29th, take 6% of your earnings and put them in the stock market. It doesn't require any legislation or scaring of retired folks.
ReplyDeleteWe should all do that...I'm using part of my tax refund this year to do it.
It will make a nice addition to my Social Security check in 2042. And if it turns out the economy tanks or the stock market crashes or any other unforeseen event, I've got the safety net of Social Security. It pays less, yeah. But it will be there...period. That's all I need to know. If I work hard all my life, under the current program, I'm guranteed a modest retirement.
That's the beauty of it. Security.
"Crisis" "Bankruptcy" = "Sky is falling"
If that's how you feel Rob than exercise your right to stay in the current system. However for those of us who don't have the money to invest outside of Social Security or those who want to see better returns on the money they pay into Social Security we should be given the right to invest that money, not be forced to pay into a program that gives out negligible returns and that is going to go bust by the time we retire. Also, if I die at an early age I don't want all the money I've paid into Social Security to simply disappear, I want it to go to my surviving family members.
ReplyDeleteNot everyone can afford to invest 6% of their income outside of Social Security, which is why we should give those people the option of taking their payroll tax and investing it so they can create some wealth for themselves down the road.
Do your homework:
ReplyDelete-If you die at an early age, your benefit DOES got to your surviving family members.
-You cannot guarantee a better return. You are simply projecting a better return. Where as Social Security benefits are guaranteed.
-The system is pay as you go. Allowing today's workers to take out their money now means you have to make up the difference to today's retirees. That means either drastically increased debt, or SS benefit cuts. All to make a change that is totally unnecessary to solve the solvency problem that Bush claims is a "crisis".
Again, if Bush wants to sell this to the American people, he needs to say:
-Private accounts would increase the solvency problem in the near term, but possibly help in 20 years when today's workers retire if the stock market beats scheduled SS benefit increases and inflation over that period.
More debt, no guarantee. Sign me up.
---Once that spouse reaches retirement age they must choose between their own social security program or their spouse's, whichever one is higher.
ReplyDeletehttp://www.socialsecurity.gov/ww&os2.htm
---Social Security is only a guarantee on the assumption that future generations will be willing to pay the costs to cover skyrocketing benefits with reduced revenues coming in.
---Yes we're going to have to take up some debt, but the amount required to pay for this transition could be as little as 1/3 of the costs of the program on it's current trend. By 2077 the costs of the program will be $25 trillion more than revenues, which will take either massive debt or massive tax increases to cover. If we act now we can reduce that number down to as much as $7 trillion.
---That would be a good way to sell it. Take on some debt now so we can reduce the debt we would have to take on in the future.
---Clearly you prefer the current Social Security system. Since PSAs will be voluntary by all means stay in it. But as for me and many others I'm not too comfortable with the current system and I see PSAs as a fairer, more wealth-creating system. So I believe I should have the right and the freedom to create my own PSA and my own retirement trust fund.
Every American should have the freedom to choose between the two systems.
I'd like to engage you on this topic honestly, but it is hard when you're willing drop outrageous numbers without backing them up. Please cite these numbers where possible.
ReplyDeleteMost of your argument on increased debt centers around your belief that there is no Trust Fund. Bush said himself last night that the last time SS was reformed was in 1983. That reform created the Trust Fund. I know conservatives love to deny its existance, but the fact is that baby boomers have been paying extra into the system for 22 years to cover the cost of their SS benefits in the coming decades. Congress may have spent the excess, but it still exists as U.S. Treasury bonds, "backed by the full faith of the U.S. Government" as Bush said last night. The Trust Fund totals somewhere on the order of 3 trillion dollars and will continue to collect for the next 12 years, at which point the "full faith" of the U.S. government owes baby boomers their extra money back.
Given the 3 trillion dollar Trust Fund, the Social Security system will continue to remain solvent until 2041. At that point, the system will only take in 75% of its payouts.
A small change in the system now would make the system solvent through the 21st century, without adding "as little as $7trillion" to the already heavily burdened national debt.
So you are telling me that it is ok to:
-Take the guarantee and safety out of the current system
-Add $7 Trillion of new debt
-Default on $3 Trillion of U.S. Bonds
-Reduce benefits to future retirees and hope they make it up in the stock market.
instead of merely paying back the money owed to the system and making a few simple tweaks to ensure solvency until the early 2100's?
All so you can have more wealth? It's worth all of that debt to you for more personal wealth?
I think we've reached a point where this is a values argument, and not a policy argument. I think it is morally objectionable to ask for so much financial burden to be placed on the future generations of this country in the name of obtaining more individual wealth. I think it is morally objectionable to remove a system that gives Americans a guaranteed retirement benefit for giving their lives to the American economy. This is America, there are many ways to obtain personal wealth without putting everyone's retirement in the risk category.
You act as if Americans are being short changed or ripped off by the current system, which is simply not true and the AARP is doing a good job of making that point. We pay for the security of a guaranteed retirement. I don't want to divide retired folks into groups based on who invested their Social Security money better. This is simply one of many attempts by Republicans to avoid paying back the Trust Fund and remove the reviled "Social" programs that the richest country in the world affords it hardest workers.
Every American should have the freedom of a comfortable retirement that they don't have to worry about for a single day in their entire lives.
Every American currently has the choice to invest a portion of their income to save for retirement and add that to Social Security. Its funny how you conservatives preach on and on about Americans needing to take responsibility for themselves. But apparently that doesn't include saving for their own retirement. But as we are learning from Tom Delay, hypocrisy is just a tool of the right.
When have I ever said there is no social security trust fund? What I have been saying is that the trust fund is full of IOU's, which to be sure the government will make good on, but will have to assume more debt to do so. Congress currently owes the trust fund $1.2 trillion dollars and the deficit running through to 2007 is projected to be $25 trillion. In contrast, the Social Security Administration actuaries projects that it will take $7 trillion to fix the program permanently.(Strengthening Social Security and Creating Personal Wealth for All Americans: The Final Report of the President's Commission to Strengthen Social Security, December 21, 2001)
ReplyDeleteFixing the program permanently will cost less in the long run than going along on the current path.
You’re right this is a values argument, and acting now will not increase the debt on future generations it will reduce it, and if we fix the program permanently it will prevent future generations from ever having to deal with the same issues we are dealing with now. Also, placing your retirement money in a private trust fund is just as secure, if not more secure than putting it into a government trust fund, for in a private trust fund that money isn’t spent right away. When you and I pay our payroll tax that money is than taken to pay for benefits for current retirees and whatever is left over is spent by congress in the general fund. All that’s left is an IOU, which the government will have to pay back with money that is borrowed or acquired from higher taxes.
I believe it is morally objectionable to force Americans to remain in a system that does short change them and prevents them from building wealth that they will be able to pass off to their heirs. I’m not alone, for a majority of Americans support the idea of allowing workers to put their payroll tax money into personal accounts.
(http://www.rasmussenreports.com/2005/Social%20Security%20March%2015.htm)
And it won’t be a game of who can invest better either. Though no single plan has been proposed at this point, a worker will be given the option of choosing between a handful of government designated options, the current social security system included, so it won’t be the boom or bust investing you make it out to be but a heavily regulated system with a much higher rate of return.
You’re also right that every American currently has a choice to invest some of their income in the stock market, but not every American has the income sufficient to be able to do that outside of Social Security. Personal accounts would help them create that income and wealth. The definition of personal responsibility is giving Americans the right to take control over their own retirement and choose what is best for them if they so desire.
The actuaries have projected a cost of $7 trillion over the next 75 years if the U.S. economy continues to grow at 1.5% during that time. The actuaries are known for their pessimistic projections and certainly the economy will outperform these projections. For awhile Bush was saying $11 trillion, but that was so outrageous he stopped. It is absurd to predict demise (i.e. the sky is falling) using a 75 year projection. Making small changes now (increasing the income ceiling for contributions into the system) will--as I've said many times here--make the system solvent through the 21st century. That is the way this program works, it is adjusted periodically to reflect the current economic trends. The only permanent fix would be to eliminate it.
ReplyDeleteSecondly, Bush would have us all believe that Social Security amounts to old age welfare. Again, he's willing to plumb the depths of misleading statements by misrepresenting the purpose of Social Security. It is not,nor has it ever been welfare for old people. Veiled implications that it is show the lack of understanding Bush has for the American middle class. Neither is Social Security an investment tool for gaining personal wealth. It is a way that the collective wealth of this country provides a secure, base level retirement to all of the middle and lower class. No one is getting short changed, everyone is guaranteed benefits based on their lifetime earnings. That has been the purpose of the program for its 75 years. And if you ask old folks (the AARP-who are steadfastly against privatization), you get the truth. The system works and helps retirees retire comfortably.
At your age, saving just $10/month would get you a decent addition to your SS benefit when you retire in 40+ years. I'm not going to argue with you that not everyone can afford it, but how many try? We are a country of unbelievable debt, both personal and national. Taking the one retirement benefit all Americans can count on (and even the new bankruptcy bill can't touch) and subjecting it to market forces undermines the stated purpose of Social Security. And considering that it still has 40 years in the black, even if we do absolutely nothing its in good shape. A small change here or there would ensure millions of retirees a safe and sound free of worry. It is every American's choice to plan for retirement by saving or investing. If they cannot do it, Social Security will be there for them. And in its current state, that is a guarantee.
Privatization removes that guarantee, and replaces it with risk, albeit small in some cases, but risk none the less. And yes, based on which investment option they choose, two retirees who pay the exact same amount of money into the PSA system could retire with much different benefits. If everyone made the same amount no matter what PSA investment option they chose, what would be the point of PSAs? Some will make more, some won't be as fortunate, all from a system that previously paid you based on your life's work, not how good an investor you were.
And...by the way...
ReplyDeleteWhen I'm using Firefox, I notice in the status bar at the bottom of the browser window that your homepage is constantly "Transferring data from www.gop.com..."?
I'll assume your website doesn't record my keystrokes to gop.com for later use against my political career, but it is a bit unnerving.
Yes Social Security will always be there, but it can be much better and fairer than it currently is.
ReplyDeleteYes some will make more than others in PSAs, but everybody will get more than they would get under the current system, especially if Mr. Pozen's means testing is approved.
If you believe that there is more personal risk in a personal savings account than there is under today's current system than remain in that system and continue to receive the same benefits that current retirees are getting. You'll get more due to the programs' indexing as a matter of fact.
I myself will be investing outside of Social Security, but I also would like the right to invest the money that I put into Social Security into a personal account, which will give me greater wealth in retirement and will also give me a nest egg that I will be able to pass on to my children and grandchildren, so they can be financially taken care of as well. Personally, it doesn't make much sense to stay in the current system when I can receive more in another system.
That date forty years from now when Social Security will begin to go into the red, where it will only be able to pay for 75% of it's promised obligations is right around the time I will be retiring, which is another reason I believe I am entitled the right to create my very own lock box, trust fund, personal account, whatever you want to call it. The fact that the program will be going in the red right when I'll be hitting retirement age doesn't make me feel all that secure or comfortable. I know that I will receive what I'm entitled to, I just don't want to have to pay higher taxes or see drastic cuts in other areas to receive it.
And finally I have a question for you on an unrelated topic, how do you get bold print or italics on words while writing comments?
And in regards to the transfering info from GOP.com that probably has to do with the GOP newsflash box towards the bottom of the site on the right hand side.
ReplyDeleteTo get the bold or italic text, you use the tags above. bold is the one with the "b", "i" is italic.
ReplyDeleteThat is the opening tag, so you type that tag, then the text you want the tag to affect, then the closing tag, which is the same thing except there is a slash "/" before the "b"
I can't write out the tag exactly or else it won't show, but a literal explanation would be:
less-than symbol, the letter b, greater-than symbol, the text you want the tag to affect, less than symbol, slash, the letter b, greater than symbol.
Replace the letter b with the letter i and you get italic.
Here is a good page for using the html tags>
ReplyDeleteJust remember to use lowercase letters, the webpage linked above uses uppercase, but that's not correct.
Thanks man, I appreciate it.
ReplyDeleteI'll remember you saying the average American can't spare 6% to invest when Bush wants to "simplify" the tax code by slashing taxes on investment income (i.e. more tax cuts for the wealthiest people).
ReplyDelete