| Author | Message | ||
     cjc Citizen Username: Cjc Post Number: 3147 Registered: 8-2003 |
In Congressional testimony today, Alan Greenspan came out for individual (private) accounts for Social Security. The man credited for much of the 90s economic boom (but not the fraud), who worked out a temporary bailout for Social Security in the 80s, who approved the Bush tax cuts that steered the US economy out of recession in 2001 backs private accounts as an element to a long term fix for Social Security system that cannot sustain itself as it stands now. | ||
| Nohero Citizen Username: Nohero Post Number: 4342 Registered: 10-1999  |
Well, he also said that he had doubts about all the debt that the President's plan would call for. And today, Greenspan said that he would not describe Social Security as a "crisis". Even the President has agreed that the private accounts do not actually address the issue of the long-term sustainability of Social Security. In other words, the private accounts are a separate issue from the potential "bankruptcy" of the system. | ||
| themp Supporter Username: Themp Post Number: 1489 Registered: 12-2001 |
``I stipulated my support (for tax cuts) was in the context of a PAYGO rule, which had been allowed to lapse at this point. So if I were voting -- but I don't vote -- I would have voted to take other actions to offset (the tax cuts), because I thought that that particular form of tax cut was important,'' Greenspan said ``I still support the elimination, the partial elimination on double taxation of dividends, but I do it in the context of a full PAYGO system,'' he said. Under questioning from Sen. Paul S. Sarbanes of Maryland, the panel's senior Democrat, Greenspan said he would support "relatively small increases" in borrowing to create private retirement accounts, but "would be very careful about very large increases in debt." | ||
| Bobkat Supporter Username: Bobk Post Number: 7628 Registered: 5-2001 |
He also stated that trillions on the national credit card to finance the private accounts wasn't a good idea at all. Bush indicated that he might be amenable to increasing the wage ceiling (proposed by Lindsay Graham I believe) for contributions from the current $90,000 because it isn't a tax rate increase. No that doesn't make me happy either. Another issue is how will the true insurance aspects of SS be handled (survivor and disability). Insurance costs for this will take a big chunk out of the 4.5% projected annual return on these accounts. I believe about 20% of the SS outgo is for survivor and disability benefits at the present time. | ||
| Guy Supporter Username: Vandalay Post Number: 554 Registered: 8-2004 |
Looks like we have common ground forming. The Congressional Democrats are now on record saying that SS is a problem that needs to be fixed. Some seemed to accept that private accounts done slowly could be a good thing. Greenspan's main point is that private accounts gets SS money out of the governments hands so they can't spend it. Greenspan's said that if you indexed SS increases off of inflation and not wages that the solvency issued would be addressed. | ||
| cjc Citizen Username: Cjc Post Number: 3148 Registered: 8-2003 |
Nohero -- I believe the President has said that private accounts in and of themselves don't solve the longterm unsustainability of Social Security. Social Security can't meet it's promises as it's currently structured, and only with private accounts and a higher rate of return can something approaching the benefits promised by Social Security be met or exceeded. The promised benefit levels of the current SS system have to be reduced as the private accounts make up for and exceed their share of the equation. (I also believe Congress will guarantee a minimum benefit level regardless of private account performance.)To say private accounts have nothing to do with Bush's fix for SS isn't accurate. Greenspan's debt concerns caused him to say the accounts which he approved of should be phased in cautiously and slowly. FINE WITH ME! Look for Republicans in the days ahead to cull quotes from Democrats praising Clinton's idea to use the markets to save social security. That, and details on how invested Dem leaders are in this risky scheme they call the market. | ||
| sportsnut Citizen Username: Sportsnut Post Number: 1747 Registered: 10-2001 |
Nohero - Greenspan said it wasn't a crisis because in his mind a crisis implies something that is going to happen very soon. However, he also said,"The word crisis depends on in what terms. That we have a very serious problem with the existing structure is what I would stipulate. The terms of how you describe it are far less important than defining what it is," he said. emphasis mine I agree that from what I have heard the use of private accounts does nothing for the current system. I believe the only option is to reduce benefits or raise taxes. I continue to believe that benefits should be tied to the amount of wealth you have at the age you retire and at some limit you should cease to qualify for benefits - I know that would not be very popular with other republicans but since I have entered middle age I have viewed SS as nothing more than an additional tax that I must pay to support someone else, because I am surely not counting on receiving any benefit when I retire. I am fully willing to accept responsibility for my own retirement and have been planning for that since my late 20s. As I have been planning for my son's education since he was 8 months etc. etc. To continue a theme of not relying on the government to bail me out. I do realize that it is easier said than done for most. | ||
| lumpyhead Citizen Username: Lumpyhead Post Number: 1113 Registered: 3-2002 |
Who on this board can't do better than 2% on their money? | ||
| cjc Citizen Username: Cjc Post Number: 3149 Registered: 8-2003 |
Fixing the current system by cutting benefits and raising taxes means you're putting more money into a system and getting less for it. What's the point in doing that? | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5552 Registered: 1-2003  |
bobk, what's wrong with raising the ceiling and leaving the rates as they are? I think that's a good idea! sportsnut, I don't quite follow you. You're not relying on SS when you retire. Given that you're not likely to need it, that makes sense. But you're likely to be pretty well off, so what's wrong with funding the needs of others not as well off? Um, maybe you're saying that since you will be self-reliant, all others should be? Ah, yes! But can they be? | ||
| sportsnut Citizen Username: Sportsnut Post Number: 1749 Registered: 10-2001 |
CJC - funny that's how I feel about all the taxes I pay. Just keep pumping more and more in year after year. I'm not saying not to fix what's wrong with the system and given the choice I'd rather forfeit the money that I've paid in, but in the absense of more options for better returns what other alternative is there? | ||
| Bobkat Supporter Username: Bobk Post Number: 7629 Registered: 5-2001 |
Tom, I am being selfish here, OK?  I posted about an article in the Times last week that basically outlined scenarios with private accounts earning 4 1/2% for the employee contribution and the "traditional" SS benefits indexed to inflation. Pretty much it was a wash as compared to the new system, ignoring funding issues. For the second time today, another major issue is that SS provides survivor and disability coverage and that is at least 20% of the current payouts. How is this going to be handled? The insurance costs are going to eat into the projected 4 1/2% return, as is the case in other countries with private accounts. | ||
| cjc Citizen Username: Cjc Post Number: 3150 Registered: 8-2003 |
What's your disagreement with private accounts replacing the demographically unsustainable pay-as-you-go system? Why isn't that a viable option to you? | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5554 Registered: 1-2003 |
cjc, as has been pointed out, private accounts are better when you compare an expected high rate of return for private accounts with an expected low rate of return for doing it the old way. There are other reasons it's a scary idea, which have been laid out here already. If you didn't agree with them before, why ask again what they are? | ||
| themp Supporter Username: Themp Post Number: 1495 Registered: 12-2001 |
"Look for Republicans in the days ahead to cull quotes from Democrats praising Clinton's idea to use the markets to save social security." Although it will be pointed out that he never endorsed private accounts. Like this here: "What Bill Clinton proposed was that rather than having the Social Security Trust Fund invest all its assets in Treasury bonds that it invest a relatively small portion of those assets in private securities. Again, no point of interpretation here: that's not private accounts, period. The president also proposed so-called USA Accounts, a universal 401k available to all Americans, but not part of Social Security. Again, completely different from what the president is proposing." So yes, those sound bites will be used inaccurately, and squabbling will continue. | ||
| mjc Citizen Username: Mjc Post Number: 251 Registered: 10-2004 |
"Who on this board" CAN do better than 2% (or whatever the actual SS/Treas. Bond return is) for a lifetime, inflation-indexed annuity with provisions for pre-retirement disability benefits, survivor benefits and a (small) death benefit? | ||
| sportsnut Citizen Username: Sportsnut Post Number: 1750 Registered: 10-2001 |
CJC - I worry that people are not saavy enough to take care of themselves and will wind up on the dole anyway, so to me its better to provide some base level of coverage now rather than pay more later. Tom - I am not relying on it not because I won't need it but because it won't be there when I'm ready to retire. I won't need it because I'm taking steps so that I won't have to need it. I realize that some people aren't that fortunate and I am willing to pay for that. How much of other people's retirement should I fund? Don't I fund enough already seeing as how all the money I've contributed to date (close to 20 years) I'm willing to forfeit? Keeping the tax rate steady and taxing all income is a very bad idea. Lowering and/or staggering the rates as income rises is a much better idea. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5556 Registered: 1-2003 |
I think people should forfeit something they don't need, but it is probably impossible, politically, to bring on a means test. I'd love to be proven wrong, though. Why is keeping the rate steady a bad idea? Why is lowering or staggering it a good idea? I prefer progressive taxes to regressive taxes. Are you saying that you should get something back in proportion to what you put in? That's antithetical to taxes. If that is what we are after, we should do away with taxes. If that seems like a good idea, then you need to remember why we tax in the first place. (Not you, personally, sportsnut. I mean a person.) | ||
| themp Supporter Username: Themp Post Number: 1499 Registered: 12-2001 |
"How much of other people's retirement should I fund? Don't I fund enough already seeing as how all the money I've contributed to date (close to 20 years) I'm willing to forfeit? " Can I buy your benefits? | ||
| Madden 11 Citizen Username: Madden_11 Post Number: 625 Registered: 12-2003 |
Who on this board can't do better than 2% on their money? And who on this board thinks it would be a good idea to cash in their health insurance to try it? |
