On Mon, 10 Jan 2005 19:30:05 -0500, Erik Reuter <[EMAIL PROTECTED]> wrote: > * Gary Denton ([EMAIL PROTECTED]) wrote: > > The New York Times repeats what I have been writing here <snip> > > It's bad enough that the $10 trillion is a highly inflated figure, > > intended to overstate a problem that is reasonably estimated at $3.7 > > trillion or even considerably less. > > That is baloney. Anyone who has actually looked at the figures can > see that $10 trillion is a reasonable estimate. Gokhale and Smetters > estimate it at more than $7 trillion last year. Sure, there is some > uncertainty in predicting wage growth and longevity in the future, so > if you want to be really optimistic (not generally a good idea when > planning one's retirement, but lets throw caution to the wind) you can > use the $3 trillion figure (which cuts off at 75 years, so there is > the implicit assumption that we will reduce benefits sometime after 75 > years, in other words, if you are too selfish to pay for yourself, put > your obligations onto the generation being born now). ROTFL. This from a supporter of the current birth tax? Bush is creating unfunded debt out his wazoo and this "reform" is more of the same. > That is why the 2018 date is important. It marks the time that the > government will start slowing the economy at an ever greater rate in > order to pay SS benefits. The 2018 date is important becuase we have not build up the surplus by investments in the economy to pay down the bills. Instead Bush has been on a war spending and tax cut spree.
> When the government raised payroll taxes to create the SS trust fund, it > resulted in very little, if any, net increase in the productive capital > of the country. Mostly, it resulted in inefficient government spending. > Certainly, the government doesn't save. Look at the budget, its been > in deficit almost continuously for 30 years. If the government doesn't > save, it isn't suprising that the government doesn't do much investment > resulting in an increase in the national stock of productive capital. Wrong, Clinton ran a surplus and Gore was going to keep that surplus - that was the lockbox argument. One of his other campaign arguments was for productive investment in the economy. > > The president is irresponsible to even imply that the United States > > might not honor its debt obligations. > > Straw man. The president implied no such thing. Of course the government > will pay itself back. It will borrow money, print money, or raise taxes > to do it. Bush has never meet his obligations and his lack of stewardship of the United States is the worst example of many. >That is not to argue > that we don't need to tackle Medicare/Medicaid. We certainly do. But > (unfortunately) Bush won the election, so he gets to choose the order of > attack. Considering how much he screwed up with the prescription drug > bill, it doesn't bother me to see him starting with SS. At least he has > the beginnings of a reasonable plan with partial SS privatization. So despite all his previous actions you cling to a desperate hope that Bush will do something you approve of and is fiscally responsible? > After all, would you rather have your retirement money wasting away > under the mattress (perhaps being surreptitiously replaced by I.O.U.'s > from your room-mate so he can pay off his gambling debts), or would you > rather have your savings earning a market return and increasing the > national stock of productive capital so that you and future generations > will have an easier time and better standard of living? Retirement money should be in 401Ks. This is Social Security money which is a welfare program for old people. It is not like a traditional welfare program only in that all old people collect money to keep the system politically popular. More on the UK experience: A Bloody Mess By Norma Cohen conservative government sweeps to power for a second term. It views its victory as a mandate to slash the role of the state. In its ïrst term, this policy objective was met by cutting taxes for the wealthy. Its top priority for its second term is tackling what it views as an enduring vestige of socialism: its system of social insurance for the elderly. Declaring the current program unaffordable in 50 years' time, the administration proposes the privatization of a portion of old-age beneïts. In exchange for giving up some future beneïts, workers would get a tax rebate to put into an investment account to save for their own retirement. George W. Bush's America in 2005? Think again. The year was 1984, the nation was Britain, the government was that of Margaret Thatcher -- and the results have been a disaster that America is about to emulate. For all the fanfare that surrounds the Bush administration's efforts to present a bold new idea on pension reform, the truth is that it is not new at all. In fact, the proposal looks suspiciously like the plan set in train during Thatcher's ïrst term in 1979 and which has since led Britain to the brink of a crisis. Since then, the nation's basic pension, which is paid for out of tax receipts, has shrunk dramatically. The United Kingdom has the stingiest state pension program of any G8 nation, and there is growing consensus -- even among British conservatives -- that reform is needed. And ironically enough, considering that America is on the verge of copying Britain's mistake, most experts seek reform in the direction of a more generous, and simpler, basic state pension -- one similar in design, in other words, to America's Social Security program. David Willetts, the Conservative MP who is the opposition spokesman on pensions (and whose intellectual agility has earned him the sobriquet "Two Brains"), is one admirer of the U.S. system. "I like the way they distinguish between Social Security and means-tested welfare," he says. "They have higher Social Security beneïts to keep elderly people off welfare." And last year, in a startling reversal of its decades-old policy, the Confederation of British Industry, the United Kingdom's premier business group and the functional equivalent of the U.S. Chamber of Commerce, called for a more generous state retirement beneït, saying -- remember, this is the nation's leading business lobby talking -- that it would even support raising taxes to help pay for it. (It also called for raising the retirement age.) Britain's experiment with substituting private savings accounts for a portion of state beneïts has been a failure. A shorthand explanation for what has gone wrong is that the costs and risks of running private investment accounts outweigh the value of the returns they are likely to earn. On average, fees and charges can reduce pension lump sums by up to 30 percent on retirement. The nation's savings industry, which sells those private accounts, has already acknowledged this. Which brings us to irony No. 2: Just as the United States prepares to funnel untold billions to its private sector for the management of private accounts, back in 2002, many U.K. insurance companies, mindful of tough new rules against giving bad advice, began to write to their customers urging them to consider abandoning their private savings and returning to the state pension system -- something hundreds of thousands of Britons have done already. And this is the system that the United States is seeking to emulate? Much more here: http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=8997 or http://tinyurl.com/424r4 Gary Denton _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
