Tuesday, January 25, 2005

Token Social security post

Over at Pandagon, Jesse writes about an article on Social Security privatization (yeah I'm going to keep using that word. Frank Luntz can kiss my ass on saying 'personal accounts'). Luskin is just another in a long line of idiots who can't do high school math and, yet, are in charge of our economy. Don't tell the Chinese or they might stop buying Treasury bonds. Jesse does a great job of debunking his line that there is a $10.4 trillion shortfall in Social Security. We've talked about that before, any projection over infinity is totally meaningless. This letter in today's Waco Trib also irked me(emphasis added to show his stupidity).

Social Security options Various commentators are asserting that Social Security is financially sound and that full benefits can be paid for nearly 40 years without skipping a beat. They are grossly misreading a recent report released by the Congressional Budget Office. Yes, Social Security is supposed to continue paying benefits after 2018 by drawing on the Social Security Trust Fund. Just one problem: There is no trust fund. The surplus from payroll taxes is used to pay current retirees. The remainder is spent on other government spending – everything from paper clips to battleships. The government then writes itself an IOU for the amount spent. Those IOUs are what are commonly referred to as the trust fund. As President Clinton aptly noted in 1998, our options are 1) raise taxes, 2) cut benefits, or 3) get a higher rate of return through investment. To argue that a system that will begin running perpetual deficits in 2019 does not present a serious public policy problem until 2052 is misleading at a minimum and reckless in the extreme. At least in the Alliance for Retirement Prosperity, led by Jack Kemp, Dick Armey and Dorcas Hardy, we have one group trying to tell people the truth. Charlie Deputy Waco
Number one has to be that privatization will take even more money out of the system so it has a net negative effect on the health of Social Security. It's a solution that doesn't work to a problem that doesn't exist. Also, this person obviously hasn't read the CBO projections for Social Security health. It says that there very much is a Trust Fund. And if that Trust Fund is just a bunch of IOUs that will never be paid, then China and Japan and George W. Bush himself shouldn't expect to get paid, either. But they will, so says Sect. 4 of the 14th Amendment. If he wants to have a conversation about where the money comes from inside the General Fund to pay those bonds, that is a different matter. But insinuating that the government will renege on its promise to pay its debts is "reckless." This guy also doesn't understand how the system works, either. The surpluses in the system are used to buy those bonds and put them in the Trust Fund. With the General Fund in serious deficit, some money is taken from the Trust Fund and used to cover part of the debt. If we don't want that to happen anymore, we need fewer guys like Dick Armey, who did just that kind of thing as majority leader, not more. I'm going to let Josh Marshall field the totally out-of-context remarks about what Bill Clinton said in regard to privatization.