State of the Union

OMG, not the heritage foundation! :) Sorry, but they are just a bit more trustworthy than PNAC. :blues:

That was sort of a tounge in cheek jab. You see how EVERYONE of these boneheads writes about “Myths” and then reveals the “Facts”? How’s the average Joe supposed to know whose “myths” and “facts” are accurate! :) :)

TG – burying retirement money in Mason jars out back…

See ? You can find stats to support OR categorically refute any position on this argument right now. All the predictive models are based on any number of subjective assumptions which may or may not turn out to be valid.

And I was thinking last night about how Bush is already on-track to solve this problem about the worker/retiree ratio. He doesn’t need to mess with SS at all. All he needs to do is spawn another baby boom. What’s one good way to do that ? Start another massive global conflagration…like what triggered the last baby boom which is the source of this ratio crisis now. See, he’s already got this one covered.

Quote (TomS @ Feb. 04 2005,14:06)
OMG, not the heritage foundation! :) Sorry, but they are just a bit more trustworthy than PNAC. :blues:

Whats wrong with PNAC? ??? Could it be that their home page on the web reads as though they want the USA to take over the whole world? Nah....... :D :D


Not just their home page, but every page they have produced in any format, print, web, or whatever…

Sure, ky, one can find stats to support anything, but some stats are better than others, and if it is indeed possible to find stats that are equally justified supporting opposing position it only means that we need to do a bit more study. In many (most?) cases some studies are clearly better than others…and the heritage folks are not on the winning end of that continuum

Kinsley’s Proof That Social Security Privatization Won’t Work.


MY CONTENTION: Social Security privatization is not just unlikely to succeed, for various reasons that are subject to discussion. It is mathematically certain to fail. Discussion is pointless.

The usual case against privatization is that (1) millions of inexperienced investors may end up worse off, and (2) stocks don’t necessarily do better than bonds over the long run, as proponents assume. But privatization won’t work for a better reason: It can’t possibly work, even in theory.

The logic is not very complicated:

1. To “work,” privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees’ pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap.

2. Where does this bonus come from? There are only two possibilities-- from greater economic growth or from other people.

3. Greater economic growth requires either more capital to invest or smarter investment of the same amount of capital. Privatization will not lead to either of these.
a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private Social Security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same.

b) The only change in decision-making about capital investment is that the decisions about some fraction of the capital stock will be made by people with little or no financial experience. Maybe this will not be the disaster that some critics predict, but there is no reason to think that it will actually increase the overall return on capital.
4. If the economy doesn’t produce more than it otherwise would, the Social Security privatization bonus must come from other investors, in the form of a lower return.
a) This is in fact the implicit assumption behind the notion of putting Social Security money into stocks, instead of government bonds, because stocks have a better long-term return. The bonus will come from those saps who sell the stocks and buy the bonds.

b) In other words, privatization means betting the nation’s most important social program on a theory that cannot be true unless many people are convinced that it’s false.

c) Even if the theory were true, initially, privatization would make it false. The money newly available for private investment would bid up the price of (and thus lower the return on) stocks, while the government would need to raise the interest on bonds in order to attract replacement money.

Great Briton went to privatization something like 10-15 year ago and are trying to figure out how to get out of it…it doesn’t work. What happened is that people generally don’t take the time to research it and the gov’t ends up running the system anyway. Sweden has it and it 's not working there. I could only agree to privat e accts if they are completely separate from SS. and completely voluntary but what is that…we do that already so why mess with it. get the fat cats out of it. If you make above x amount of dollars you don’t get any SS. It was never meant to be a full retirement package anyway jus supplementary to your own investment retirement. Getting screwed by shrub must feel good because 50 million people dropped their drawers for him in the election.