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Author Message   themp Citizen Username: Themp Post Number: 1399 Registered: 12-2001 Posted on Thursday, February 3, 2005 - 4:43 pm:        In a significant shift in his rationale for the accounts, Bush dropped his claim that they would help solve Social Security's fiscal problems -- a link he sometimes made during last year's presidential campaign. Instead, he said the individual accounts were desirable because they would be "a better deal," providing workers what he said would be a higher rate of return and "greater security in retirement." A Bush aide, briefing reporters on the condition of anonymity, was more explicit, saying that the individual accounts would do nothing to solve the system's long-term financial problems. That candid analysis, although widely shared by economists, distressed some Republicans. "Oh, my God," one GOP political strategist said when he learned of the shift in rhetoric. "The White House has made a lot of Republicans walk the plank on this. Now it sounds as if they are sawing off the board." Just a heads up. Story line is being changed, so correct your arguments accordingly.   Southerner Citizen Username: Southerner Post Number: 79 Registered: 2-2004 Posted on Thursday, February 3, 2005 - 11:54 pm:        Surprise, surprise. Imagine that, politicians playing politics. Wow. I do enjoy the game but please, no more Pelosi on TV. You can only sacrifice a lamb so many times and this poor woman has taken one to many for her team.   Mark Fuhrman Citizen Username: Mfpark Post Number: 1239 Registered: 9-2001 Posted on Friday, February 4, 2005 - 8:46 am:        Do Cons care about solving real problems or only about winning the battle of perception? If you believe SS is in imminent trouble, don't you want to see our leaders find a solution that works for the good of our country? Or are you only focused on partisan politics? By the way, the "oops" themp is alluding to is a major problem. Paul Krugman (yes, the bete noir of the Cons) covers it simply and devastatingly in today's Times. Southerner, I know you don't like anything to do with the Times, but take a look at the article and then find me one that refutes it from your hometown paper of choice. Or answer the arguments on your own. http://www.nytimes.com/2005/02/04/opinion/4krugman.html?oref=login   themp Supporter Username: Themp Post Number: 1404 Registered: 12-2001 Posted on Friday, February 4, 2005 - 9:13 am:        Surprise, surprise. Imagine that, politicians playing politics. Wow. I do enjoy the game but please, no more Pelosi on TV. You can only sacrifice a lamb so many times and this poor woman has taken one to many for her team. Huh?   Mark Fuhrman Citizen Username: Mfpark Post Number: 1241 Registered: 9-2001 Posted on Friday, February 4, 2005 - 9:15 am:        When you can't refute an argument, use misdirection and thread drift.   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1030 Registered: 8-2003 Posted on Friday, February 4, 2005 - 9:16 am:        this is the Bushies' MO on EVERY issue. Pick a policy you want to implement (tax cuts, invasion of Iraq, SS privatization), and just keep throwing rationales at the wall until you see what sticks with the voting public. Tax cuts - in time of surplus, it's "giving back your money." In times of deficit, it's an economic stimulus. It's a floor wax, it's a desert topping - it's BOTH! Iraq - a doctoral student tallied 23 different reasons espoused by the Bush Admin for invading Iraq. At this moment, only one (bringing "democracy" to Iraq) is operational. With regard to SS, anyone who was paying attention knew that private savings accounts had absolutely nothing to do with addressing a potential shortfall in the SS fund. At least now they're acknowledging that. But if you've been following W's shifting reasons behind what he's proposing on other issues (and not just blindly following him), you had to know this was coming for SS "reform" as well. But it begs the question - if private accounts are such a great deal, why the need to start off with a lie about how they address the SS funding "crisis?" I wouldn't buy a car from someone who tried this sort of bait and switch, so why would I buy into a retirement plan this way?   notehead Supporter Username: Notehead Post Number: 2006 Registered: 5-2001 Posted on Friday, February 4, 2005 - 10:20 am:        Doc, I would love to see the "23 different reasons" document. I think it would make good emailing material. Can you please link?   Guy Supporter Username: Vandalay Post Number: 540 Registered: 8-2004 Posted on Friday, February 4, 2005 - 10:56 am:        I don't know if it is 23 , but this might help. http://hnn.us/articles/1282.html   themp Supporter Username: Themp Post Number: 1407 Registered: 12-2001 Posted on Friday, February 4, 2005 - 11:01 am:        Stay focused on SS here, folks.   cjc Citizen Username: Cjc Post Number: 3080 Registered: 8-2003 Posted on Friday, February 4, 2005 - 11:28 am:        MF -- for myself, I only want to win the argument and really don't care if the country goes down the drain. I also run around cheering smokestacks, making videos of the homeless for my personal entertainment, and laugh at public school test scores. Private accounts with a higher rate of return does address the 'shortfall' in Social Security by providing a mechanism that can deliver more of a return -- and payout -- than the existing system which as it stands now will be able to deliver only 80% of what it promises on a pay-as-you-go basis in 2042. And if anyone is playing politics with this issue, MF, it's the democrats who first deny a problem exists and then offer a policy of "no." If that same system had a greater return on it's assets, SS wouldn't be nearly in this bad a position.   Robert Livingston Citizen Username: Rob_livingston Post Number: 824 Registered: 7-2004 Posted on Friday, February 4, 2005 - 11:40 am:        cjc: It's not only the democrats questioning Bush's plan and motives. Republicans Question Social Security Plan   themp Supporter Username: Themp Post Number: 1409 Registered: 12-2001 Posted on Friday, February 4, 2005 - 11:52 am:        "And if anyone is playing politics with this issue, MF, it's the democrats who first deny a problem exists and then offer a policy of "no."" Is that the new talking point? Democrats are just being negative? I don't understand that, in that there is no plan on the table that deals with the problem, and the one that has been hinted at would significantly burden our country with debt. Why shouldn't they say "no"? Bush wants to complain about lack of support for his plan, but at the same time refuses to give details about his plan. I think everyone would be happy to sit down and talk about a defined, agreed upon problem and look for a solution. For some reason a vast increase in debt is seen as superior to an increase in payroll taxes. I don't see why. Here is a link to some analysis that seems to indicate that pessimistic growth assumptions make the problem seem terrible, but optimistic growth assumptions are needed to make private accounts yield enough to do better than the current system. In other words, private accounts will only solve the problem under economic conditions where the problem would have largely gone away? http://www.washingtonmonthly.com/archives/individual/2005_01/005401.php   cjc Citizen Username: Cjc Post Number: 3082 Registered: 8-2003 Posted on Friday, February 4, 2005 - 12:20 pm:        Robert -- there are lots of questions on both sides, agreed. But denial and opposition with no alternative is different than having questions. The house editorial from the DC Post washingtonpost.com Bartleby Democrats Friday, February 4, 2005; Page A16 HERMAN MELVILLE'S "Bartleby, the Scrivener" tells the tale of a lawyer's assistant who inexplicably stops doing his job, instead spending his days staring blankly at a brick wall. "I'd prefer not to," he invariably tells his employer when asked to copy a paper, go to the post office or even answer a question. "No: at present I would prefer not to make any change at all," Bartleby says when asked to leave. In their response to President Bush's State of the Union address Wednesday night -- indeed, in much of their reaction to Mr. Bush's push on Social Security -- the Democrats share a disturbing resemblance to Bartleby. Unlike Bartleby, the Democrats' maddening passivity can be excused in part by the administration's maddening evasion of hard choices. The accounts proposed by the president would not, in themselves, extend the solvency of the Social Security system by a single day. Mr. Bush not only presented his private accounts to the country as risk-free, he made none of the tough calls about what should be done to achieve solvency. At least, though, the president did spell out some possible changes and acknowledge that they won't be "easy." The Democrats' general response so far is a combination of exaggerated rhetoric and silence about alternatives. Senate Minority Leader Harry M. Reid (Nev.) makes an important point about the dangers of "Social Security roulette," but where, exactly, is his responsible alternative for making Social Security solvent? Democratic presidential nominee John F. Kerry set the responsibility bar low during the campaign, when he vowed that there would be no cuts in benefits on his watch if he were elected president. He had little more to offer on "Meet the Press" last weekend. "I do not believe we have to raise the retirement age," Mr. Kerry said. "I am absolutely opposed to cutting benefits, and I believe we can save Social Security in any number of ways, Tim, other than what President Bush wants to do." And those would be?   themp Supporter Username: Themp Post Number: 1411 Registered: 12-2001 Posted on Friday, February 4, 2005 - 12:54 pm:        So in the absense of a stated alternative, the president's plan should be supported? What's the rush? We have years to deal with this.   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1032 Registered: 8-2003 Posted on Friday, February 4, 2005 - 1:18 pm:        cjc, you don't even have your arguments straight. in one breath you're saying: "Private accounts with a higher rate of return does address the 'shortfall' in Social Security," and in the next breath you're quoting an article that says: "The accounts proposed by the president would not, in themselves, extend the solvency of the Social Security system by a single day." it can't be both.   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1033 Registered: 8-2003 Posted on Friday, February 4, 2005 - 1:28 pm:        And you may wonder where I got the idea that private accounts don't address a potential SS shortfall. I got it from The White House: quote: So in a long-term sense, the personal accounts would have a net neutral effect on the fiscal situation of the Social Security and on the federal government. http://www.nytimes.com/2005/02/03/politics/03social-txt.html?oref=login&pagewant ed=all}   cjc Citizen Username: Cjc Post Number: 3085 Registered: 8-2003 Posted on Friday, February 4, 2005 - 1:40 pm:        OK, let me explain. The shortfall in Social Security is built into the system -- a 20% cut in benefits in 2042. Reason? Pay-as-you-go system demographically can't handle the payouts at the promised levels. Reason -- not enough money going in, and no appreciation on assets. Pvt Accounts will make up for (or "address") what Social Security can't deliver with a higher rate of return. You want to preserve this turkey of Social Security? You need 3.7 trillion (per Diane Feinstein in the SF Chronicle today) to get it through 2080 in tax hikes and/or benefit cuts.   Tom Reingold Supporter Username: Noglider Post Number: 5349 Registered: 1-2003 Posted on Friday, February 4, 2005 - 1:43 pm:        And if you don't have a NY Times login, use username "redrum" and password "redrum7". Or find another one at http://www.bugmenot.com   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1034 Registered: 8-2003 Posted on Friday, February 4, 2005 - 2:02 pm:        cjc, I guess Bush and his administration are wrong about their plan being revenue neutral. maybe you should send them your assumptions on return, because your numbers must be a lot more bullish than theirs.   cjc Citizen Username: Cjc Post Number: 3087 Registered: 8-2003 Posted on Friday, February 4, 2005 - 2:08 pm:        Doc, the full quote was: "With respect to the fiscal effects of the personal accounts, in a long-term sense -- and I know those of you who have talked to me have heard me say this before -- but in the long-term sense, obviously, the personal accounts, as we would structure them, would not create a net new cost for the system. To the extent that people put money in these accounts and invest in these accounts, there would be a corresponding reduction in the government's liabilities from the Social Security system that is equal in present value to the money placed in the personal accounts up front. So in a long-term sense, the personal accounts would have a net neutral effect on the fiscal situation of the Social Security and on the federal government."   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1035 Registered: 8-2003 Posted on Friday, February 4, 2005 - 2:12 pm:        regardless, "net neutral" doesn't just mean it won't cost anything. It also means you won't net out with more.   themp Supporter Username: Themp Post Number: 1414 Registered: 12-2001 Posted on Friday, February 4, 2005 - 2:17 pm:        "Pvt Accounts will make up for (or "address") what Social Security can't deliver with a higher rate of return." I think that is the idea in dispute, rather than the proof.   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1036 Registered: 8-2003 Posted on Friday, February 4, 2005 - 2:20 pm:        and now even Bush is backing off on that   cjc Citizen Username: Cjc Post Number: 3088 Registered: 8-2003 Posted on Friday, February 4, 2005 - 2:32 pm:        I think you and this quote are discussing entirely different things here.   themp Supporter Username: Themp Post Number: 1415 Registered: 12-2001 Posted on Friday, February 4, 2005 - 2:32 pm:        President George W. Bush said that his plan for privatizing Social Security would be modeled after the Thrift Savings Plan (TSP) for federal employees. But Francis X. Cavanaugh, who served as the first executive director of the TSP from 1986 to 1994, has argued repeatedly that extending that system to Social Security would be an administrative nightmare for the government, businesses, and individuals. In testimony before Congress and in a subsequent report for AARP, Cavanaugh explained why a system that generally works well for about 3 million government workers would confront all kinds of hellacious logistical problems if it embraced Social Security's 147 million beneficiaries. Examples: The current TSP has about 200 telephone counselors (in addition to its automated voice response system) to respond to participant inquiries. Since there would be roughly 50 times as many "clients" under the president's plan, there would be a potential need for more than 10,000 counselors to maintain the same level of service. Many of those counselors, unlike those now at the TSP, would have to speak foreign languages. They also would have to be highly trained because they would be required to provide current market, investment, and transactional information affecting investment decisions. Employers would be required to assume expenses and fiduciary responsibilities akin to what companies that provide 401(k) retirement plans now maintain. But more than 85 percent of businesses with fewer than 100 employees have no retirement plans and don't have the personnel, payroll, or systems staffs to do what employers offering 401(k)s do now. Based on surveys of administrative costs for firms that set up 401(k)s for companies with 10 or fewer employees, the annual cost per worker amounted to more than $300. For an account of $1,000 (the maximum under the president's proposal), a cost of $300 per worker would require more than a 40 percent investment return just to get the fund back to $1,000 at the end of the year.   cjc Citizen Username: Cjc Post Number: 3089 Registered: 8-2003 Posted on Friday, February 4, 2005 - 3:51 pm:        I very seriously doubt the costs will be anywhere near as high. Have to wait for the plan.   themp Supporter Username: Themp Post Number: 1420 Registered: 12-2001 Posted on Friday, February 4, 2005 - 4:45 pm:        The plan is to hide the plan until everyone agrees to the plan.   Southerner Citizen Username: Southerner Post Number: 81 Registered: 2-2004 Posted on Saturday, February 5, 2005 - 2:23 am:        Mark, I wasn't commenting about the SS debate. I was commenting on themps point about the admin changing rhetoric. It's politics. This SS issue will be shaped and reshaped time and time again until a vote is actually taken (probably 2007). I'm not speaking on behalf of any side on this. I'm just commenting on the game. I expect the Repubs to change their talking points and I expect the Dems to change theirs as well. To be surprised at this is to be naive. I'm no longer interested in talking about the plan itself because we are set in two different camps and talking about it on this board is basically worthless as it quickly falls to the level of name calling. I like the Admins plan and hope it passes. I understand that a lot of you hope it fails. Either way I'm going to go on living. However, I will comment when people appear to be shocked that these guys are playing politics. Your right, I don't care for the NY Times (and I don't care for Rush Limbaugh either). I understand they (Times/Rush) have their agenda and so I expect that you guys who live and die by the Times will continue to post their articles until the vote is taken and beyond. That is fine and dandy but I refuse to allow one media outlet to shape my way of thinking. I prefer to get my info from a variety of media outlets and then determine my own opinion. This is why I can only stand Rush, Hannity, Fox, The NY Times, The Atlanta Constitution, CNN, etc, etc, in small doses. That's a main reason I check this board is to get opinions from people I know differ from mine for the most part.   ffof Citizen Username: Ffof Post Number: 3321 Registered: 5-2001 Posted on Saturday, February 5, 2005 - 9:49 am:        Call me crazy (to borrow from a highly intelligent MOL poster), but I also get my news from THE POST Southerner, you want to get differing opinions and then come on and say MOL is so worthless. Your high falutin' is laughable in this setting. Give it up or get a sense of humor or post something of substance. You don't want name calling, but then label everyone as worthless (woops, I said that). Better be careful, or you'll give all southerners a bad name.   Dr. Winston O'Boogie Citizen Username: Casey Post Number: 1037 Registered: 8-2003 Posted on Saturday, February 5, 2005 - 9:50 am:        only an idiot lives and dies by the Times, whether you're conservative or liberal. their Whitewater reporting was abysmally poor, full of stuff that turned out to be false, and their WMD coverage was even worse. So, maybe there are some people who consider the NYT gospel, but I doubt any of them are what you'd call true liberals or progressives. speaking as one "leftist," I don't trust any one source. When I conclude the Bush Administration is lying, it's because I read their own statements, which in the case of SS, or Iraq, or tax cuts, aren't even internally consistent. and maybe changing rationales for a plan you're determined to implement is "just politics," but it's our job as citizens to question why politicians feel the need to hide facts from us when they make policy proposals. if someone tells me something is for my own good, but isn't straight on the reasons why, I'm suspicious. And I'm sure Bush supporters would be too (with anyone besides their exalted president, of course).   Southerner Citizen Username: Southerner Post Number: 84 Registered: 2-2004 Posted on Saturday, February 5, 2005 - 11:47 pm:        Ffof, I didn't call this board worthless. I called the silly name calling on this board worthless. I hope you agree with me on that. This board isn't worthless or I wouldn't check it. And I don't want anyone to think I represent the entire south because I chose the handle of Southerner. Heck, my own wife often feels the need to pretend she doesn't know me (ha)! I'm just one man on one small town message board giving my opinion.   mwoodwalk Citizen Username: Mwoodwalk Post Number: 311 Registered: 9-2001 Posted on Sunday, February 6, 2005 - 12:03 am:        To respond to Fuhrman's earlier challenge to respond to Krugman's 2/4 article on private accounts as "loans", see the below article. And for future reference, when wondering whether (or, really, how) Krugman is stretching the truth or misleading, see the Krugman Truth Squad at National Review Online www.nationalreview.com (financial section): <<<<<<February 04, 2005, 9:54 a.m. Loan Bull More tortured logic from Paul Krugman on Social Security personal accounts. Can it really be that leftist economists don’t know the difference between a margin account and an opportunity cost? It’s basic economics. But for Paul Krugman, and his acolytes and fellow travelers, it’s all about partisan politics. According to Krugman’s New York Times column Friday, when you divert some of your Social Security payroll-tax dollars into a personal account of the kind that President Bush is proposing, the government is effectively making a loan to you so that you can buy stocks on margin — “speculation that no financial adviser would recommend.” Huh? Excuse me Professor Krugman, but that’s my money we’re talking about — my payroll tax dollars. My personal account. Nobody’s loaning me anything. Here’s Krugman’s tortured and deceptive logic that gets him to his “loan” characterization. He quotes a White House press briefing that explains how workers who opt for personal accounts would have to forgo some of their regular Social Security benefits: “In return for the opportunity to get the benefits from the personal account, the person forgoes a certain amount of benefits from the traditional system. Now, the way that election is structured, the person comes out ahead if their personal account exceeds a 3 percent rate of return” — after inflation — “which is the rate of return that the trust fund bonds receive. So, basically, the net effect on an individual’s benefits would be zero if his personal account earned a 3 percent rate of return.” That’s perfectly fair — it’s a simple trade-off. If it didn’t work that way, then workers who elected personal accounts would be double dipping. But here’s the way Krugman twists it: Translation: If you put part of your payroll taxes into a personal account, your future benefits will be reduced by an amount equivalent to the amount you would have had to repay if you had borrowed the money at a real interest rate of 3 percent. Peter Orszag of the Brookings Institution got it exactly right: “It’s not a nest egg. It’s a loan.” Wrong, wrong, wrong. If it’s a loan at all, it’s a loan you make to yourself. And that’s no loan at all. Real economists — as opposed to Democratic apparatchiks like Krugman and Orszag — call such a thing not a loan, but an “opportunity cost.” Here’s an example. Suppose you have $1,000 in a money market fund earning 3 percent, and you are considering investing that money in the stock market. The opportunity cost of that investment will be 3 percent, because you give up the 3 percent yield of the money market fund. That means you’ll only come out net ahead on the stock investment if it returns more than 3 percent. That’s just how it would be for the proposed Social Security personal accounts. But there’s no loan involved here. None. In this case, your future benefits are analogous to the money market fund. In order to invest in stocks in your personal accounts, you have to give up the future benefits. A simple trade-off. An opportunity cost. Not a loan. Here’s what a real loan would look like: You have that $1,000 in the money market fund, but you want to invest $2,000 in the stock market. So you borrow an additional $1,000 from your stockbroker. Or, in the case of Social Security, suppose you are a young African American making the minimum wage. You urgently want to own stocks so you can start building a nest egg for your family. But you have no money to invest, because Social Security taxes have sucked up anything you could have set aside from your small earnings. So you manage to borrow some money, and you invest it in stocks. That’s a loan. That’s speculation. And that’s what the opponents of personal accounts would prefer for America. As a side note, that quote from Peter Orszag comes from a Washington Post story on Thursday by liberal reporter Jonathon Weisman. His story, based on the same press briefing that Krugman quoted, completely misstated the way Social Security benefits would be offset for personal-account holders. He called it a “clawback,” by which the government would confiscate earnings in your personal account below 3 percent. An array of spokesmen both liberal and conservative — no doubt caught by surprise by Weisman’s revelation of the “clawback,” which does not in reality exist — were quoted about how shocked and dismayed they were by all this. Weisman loves to quote conservatives criticizing Bush; it’s his specialty. But, of course, this was all simply wrong. After the White House issued a statement noting the error, the Post published a substantially corrected version of the story on its website — removing the quotation from Orszag cited by Krugman in America’s “newspaper of record”! The New York Times’s new motto: all the news the others find unfit to print. To give you some idea of how the Left respects the truth in these matters, visit the blog of U. C. Berkeley professor Brad DeLong — a Krugman acolyte and former Clinton administration official who once described himself as “more inclined toward ‘Marxism’ than anybody else on the Berkeley campus,” which is saying quite a bit. When the Post story first came out, he applauded Weisman and delightedly dilated on the notion of the benefit trade-off as a loan. When the correction was issued, DeLong amended his posting to say “the Post has buckled … Glad to see such spine.” You’d think he’d be glad to see the truth. But no. — Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at don@trendmacro.com.>>>>> http://www.nationalreview.com/nrof_luskin/kts200502040954.asp   cjc Citizen Username: Cjc Post Number: 3095 Registered: 8-2003 Posted on Sunday, February 6, 2005 - 10:52 pm:        I would be great if the NY Times would publish Mr. Luskin to provide some good give and take on this.