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Author Topic: Private accounts: The dumbest thing ever  (Read 1374 times)
danwxman
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« on: February 09, 2005, 01:08:41 pm »
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Wow, so I can take 4% of my SS payroll tax and invest it in some safe government bonds. So at the most I might make, what, 4%?

What is the purpose? There is NO purpose, other then to bankrupt social security, so it has to be done away with. That is what Bush and the Republicans want to do. Dismantle social security. It's painfully obvious. The private account thing is a total joke.
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« Reply #1 on: February 09, 2005, 01:10:50 pm »
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Wow, so I can take 4% of my SS payroll tax and invest it in some safe government bonds. So at the most I might make, what, 4%?

What is the purpose? There is NO purpose, other then to bankrupt social security, so it has to be done away with. That is what Bush and the Republicans want to do. Dismantle social security. It's painfully obvious. The private account thing is a total joke.
I pray every day you're right.  I really hope you're right man.
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« Reply #2 on: February 09, 2005, 01:54:25 pm »
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You could invest them in bonds at 4% (which is almost twice the rate of return on the current system by the way) or in stocks (Which average much higher than that).

Social Security is already going bankrupt, so I don't what people are crying about with solvency.  At least this way we can build a successor system.
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« Reply #3 on: February 09, 2005, 02:13:25 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.

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danwxman
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« Reply #4 on: February 09, 2005, 02:22:59 pm »
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Social Security is already going bankrupt, so I don't what people are crying about with solvency.  At least this way we can build a successor system.

Nope. Thats where they've fooled you. It won't go bankrupt if we raise the cap on social security taxes.
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danwxman
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« Reply #5 on: February 09, 2005, 02:27:41 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.
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« Reply #6 on: February 09, 2005, 03:34:41 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.

Fully privatizing it seems like a better plan than leaving it under the control of politicians who only know how to tax, spend and increase the debt. But making the transition to a private system is a huge problem because the government has promised trillions of dollars to people who are currently retired or about to retire. Those people were forced to put thousands of their hard earned dollars into the system and now expect to get something back, but the government has already spent the money and has nothing to give back. The only way they can be repaid is by taxing current wage earners, more deficit spending, or possibly selling off some of the governments assets. Personally the third option seems worthy of investigation to me. But it looks like Bush's plan is to make a gradual transition. That probably won't solve the central problem either but I applaud his efforts to focus attention on the problem and get the discussion going.

I gather your plan would be to eliminate the cap on income subject to SS tax. That would raise revenues, although I don't know if it would be enough to cover the shortfall or not. But thats just another plan for raising taxes. Its just a matter of someone else paying them.
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danwxman
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« Reply #7 on: February 09, 2005, 03:39:51 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.

Fully privatizing it seems like a better plan than leaving it under the control of politicians who only know how to tax, spend and increase the debt. But making the transition to a private system is a huge problem because the government has promised trillions of dollars to people who are currently retired or about to retire. Those people were forced to put thousands of their hard earned dollars into the system and now expect to get something back, but the government has already spent the money and has nothing to give back. The only way they can be repaid is by taxing current wage earners, more deficit spending, or possibly selling off some of the governments assets. Personally the third option seems worthy of investigation to me. But it looks like Bush's plan is to make a gradual transition. That probably won't solve the central problem either but I applaud his efforts to focus attention on the problem and get the discussion going.

I gather your plan would be to eliminate the cap on income subject to SS tax. That would raise revenues, although I don't know if it would be enough to cover the shortfall or not. But thats just another plan for raising taxes. Its just a matter of someone else paying them.

It's a matter of making the tax fair for everyone.
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« Reply #8 on: February 09, 2005, 03:41:42 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.

Fully privatizing it seems like a better plan than leaving it under the control of politicians who only know how to tax, spend and increase the debt. But making the transition to a private system is a huge problem because the government has promised trillions of dollars to people who are currently retired or about to retire. Those people were forced to put thousands of their hard earned dollars into the system and now expect to get something back, but the government has already spent the money and has nothing to give back. The only way they can be repaid is by taxing current wage earners, more deficit spending, or possibly selling off some of the governments assets. Personally the third option seems worthy of investigation to me. But it looks like Bush's plan is to make a gradual transition. That probably won't solve the central problem either but I applaud his efforts to focus attention on the problem and get the discussion going.

I gather your plan would be to eliminate the cap on income subject to SS tax. That would raise revenues, although I don't know if it would be enough to cover the shortfall or not. But thats just another plan for raising taxes. Its just a matter of someone else paying them.

It's a matter of making the tax fair for everyone.

What's 'fair' is a rather subjective matter.
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The Duke
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« Reply #9 on: February 09, 2005, 03:48:42 pm »
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Raising the cap only extends the inevitable.

Raising the cap will hurt businesses that have to match your contribution, and will therefore discourage job creation.  When you tax something, you get less of it.  When you tax employment, you get less employment.

The cap hike that's been talked about, raising it from 89K to 100K actually brings in very little money.

The rate of return of the stock market is high enough that a 4% tax can produce more money under a fully private system than the current sytem does with a 12.4% tax.  You will retire with higher benefits and you will pay lower taxes to get them.

The private system is simply superior, and should win out on those grounds alone, even if there was no financial problem in the existing system.
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« Reply #10 on: February 09, 2005, 03:52:26 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.

Fully privatizing it seems like a better plan than leaving it under the control of politicians who only know how to tax, spend and increase the debt. But making the transition to a private system is a huge problem because the government has promised trillions of dollars to people who are currently retired or about to retire. Those people were forced to put thousands of their hard earned dollars into the system and now expect to get something back, but the government has already spent the money and has nothing to give back. The only way they can be repaid is by taxing current wage earners, more deficit spending, or possibly selling off some of the governments assets. Personally the third option seems worthy of investigation to me. But it looks like Bush's plan is to make a gradual transition. That probably won't solve the central problem either but I applaud his efforts to focus attention on the problem and get the discussion going.

I gather your plan would be to eliminate the cap on income subject to SS tax. That would raise revenues, although I don't know if it would be enough to cover the shortfall or not. But thats just another plan for raising taxes. Its just a matter of someone else paying them.

It's a matter of making the tax fair for everyone.

One guy makes 90 grand and pays $6000. Another guy makes 150 grand and pays $9000. Both guys collect the same amount on retirement. Is that fair? If the guy making $150000 is self employed he pays $18000. but still receives no additional benefits. Still fair? BTW US congressmen earn a little over $150000 and pay nothing into SS. Is that fair?
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« Reply #11 on: February 09, 2005, 04:59:09 pm »
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David S,

That was a good point about the Congressmen.  I remember Kerry talking about health care on the stump, saying that all Americans should be given the health plan that congressmen and Senators get.  He said what's good for our Congressmen and Senators is good for everyone.  Well, the House and Senate have a 401K type system for their retirement.  Isn't what's good for Congressmen and Senators good for all of us?
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« Reply #12 on: February 09, 2005, 05:51:49 pm »
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David S,

That was a good point about the Congressmen.  I remember Kerry talking about health care on the stump, saying that all Americans should be given the health plan that congressmen and Senators get.  He said what's good for our Congressmen and Senators is good for everyone.  Well, the House and Senate have a 401K type system for their retirement.  Isn't what's good for Congressmen and Senators good for all of us?

Subtle difference here is that you could opt OUT of the health care plan.  If you didn't like it you don't have to do it.

If you opt out of SS Privatization you still have to pay for it for others through reduced benefits yourself.
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« Reply #13 on: February 09, 2005, 05:53:51 pm »
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David S,

That was a good point about the Congressmen.  I remember Kerry talking about health care on the stump, saying that all Americans should be given the health plan that congressmen and Senators get.  He said what's good for our Congressmen and Senators is good for everyone.  Well, the House and Senate have a 401K type system for their retirement.  Isn't what's good for Congressmen and Senators good for all of us?

Subtle difference here is that you could opt OUT of the health care plan.  If you didn't like it you don't have to do it.

If you opt out of SS Privatization you still have to pay for it for others through reduced benefits yourself.

No benefit reduction has been proposed, in fact no final plan has been proposed so any claim to know the specifics of a potential plan is false.
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« Reply #14 on: February 09, 2005, 05:55:05 pm »
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One guy makes 90 grand and pays $6000. Another guy makes 150 grand and pays $9000. Both guys collect the same amount on retirement. Is that fair? If the guy making $150000 is self employed he pays $18000. but still receives no additional benefits. Still fair? BTW US congressmen earn a little over $150000 and pay nothing into SS. Is that fair?

Well, it is a form of insurance - it is presumably possible that the high earner may fall from his enviable estate later in life, but before retirement.  It will be nice for him to know that he always has social security to fall back on.  And if he doesn't fall, he is lucky.

Of course in all seriousness we do know that most people making $150K are members of a class that is likely to continue to make in that range, while people who make 20K are extremely unlikely to make more, but in theory social safety nets are intended to protect everyone from misfortune as well as structural inequality.
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« Reply #15 on: February 09, 2005, 06:02:28 pm »
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David S,

That was a good point about the Congressmen.  I remember Kerry talking about health care on the stump, saying that all Americans should be given the health plan that congressmen and Senators get.  He said what's good for our Congressmen and Senators is good for everyone.  Well, the House and Senate have a 401K type system for their retirement.  Isn't what's good for Congressmen and Senators good for all of us?

Subtle difference here is that you could opt OUT of the health care plan.  If you didn't like it you don't have to do it.

If you opt out of SS Privatization you still have to pay for it for others through reduced benefits yourself.

No benefit reduction has been proposed, in fact no final plan has been proposed so any claim to know the specifics of a potential plan is false.

One would assume they would be similar to the proposals that Bush’s Social Security Commission issued a while back.  But don't take my word for it ....

http://www.cbpp.org/6-18-02socsec-pr.htm
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« Reply #16 on: February 09, 2005, 06:06:06 pm »
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I'm well aware where the rumor came from.  But since no actual proposal has been put forward, its impossible to say with certainty, as you did, that there will be benefit cuts.  Its also not totally honest to call something a cut when its only a cut in the reate of growth.  Finally, since Congress has been given the lead in drafting the bill, I don't see how a White House Commission is all that relevant.
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« Reply #17 on: February 09, 2005, 06:09:28 pm »
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The federal government has collected trillions of dollars in taxes over the years and what do they have to show for it?... A $7 trillion dollar debt!  Possible they can achieve such spectacular success with your retirement money as well.  Or maybe you could do better on your own.



Maybe, maybe not.

But I just think the 4% thing is stupid...the only real point of it is to actually speed up the point at which social security goes bankrupt, so the Republicans have an excuse to dismantle it.

Either leave it alone, or fully privatize it. The 4% deal is misleading.

Fully privatizing it seems like a better plan than leaving it under the control of politicians who only know how to tax, spend and increase the debt. But making the transition to a private system is a huge problem because the government has promised trillions of dollars to people who are currently retired or about to retire. Those people were forced to put thousands of their hard earned dollars into the system and now expect to get something back, but the government has already spent the money and has nothing to give back. The only way they can be repaid is by taxing current wage earners, more deficit spending, or possibly selling off some of the governments assets. Personally the third option seems worthy of investigation to me. But it looks like Bush's plan is to make a gradual transition. That probably won't solve the central problem either but I applaud his efforts to focus attention on the problem and get the discussion going.

I gather your plan would be to eliminate the cap on income subject to SS tax. That would raise revenues, although I don't know if it would be enough to cover the shortfall or not. But thats just another plan for raising taxes. Its just a matter of someone else paying them.

It's a matter of making the tax fair for everyone.

One guy makes 90 grand and pays $6000. Another guy makes 150 grand and pays $9000. Both guys collect the same amount on retirement. Is that fair? If the guy making $150000 is self employed he pays $18000. but still receives no additional benefits. Still fair? BTW US congressmen earn a little over $150000 and pay nothing into SS. Is that fair?

I must correct something I said which was in error. Congressmen do have to pay into Social Security now. The law was changed in the early 1980s. Prior to that they did not. My appologies for the error. I stand corrected.
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« Reply #18 on: February 09, 2005, 06:16:58 pm »
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I'm well aware where the rumor came from.  But since no actual proposal has been put forward, its impossible to say with certainty, as you did, that there will be benefit cuts.  Its also not totally honest to call something a cut when its only a cut in the reate of growth.  Finally, since Congress has been given the lead in drafting the bill, I don't see how a White House Commission is all that relevant.

By this logic we can't really even discuss private SS accounts since there aren't any details available right now.  But based on the best information currently available we can guesstimate what such a proposal would be like.

And it is honest to call a rate of growth reduction a cut because it is a cut in buying power (which is much more important than just the straight # of $'s).
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« Reply #19 on: February 09, 2005, 08:25:04 pm »
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Oh yes its a dumb idea. I can't wait to pay thousands a year into a system and only get less then 1000k a month when I retire and when I die my family gets a killer 250$ to bury me with! And any money that was entitled to me I automatically lose upon my death. Great system for sure. And to boot since black men tend to have much shorter lifespans then white men they won't be getting benefits but for maybe only 5 years max, while I will get to get benefits for 10-15 years! Its a really fair system. I agree with the Democrats on this.
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« Reply #20 on: February 09, 2005, 08:51:32 pm »
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I'm well aware where the rumor came from.  But since no actual proposal has been put forward, its impossible to say with certainty, as you did, that there will be benefit cuts.  Its also not totally honest to call something a cut when its only a cut in the reate of growth.  Finally, since Congress has been given the lead in drafting the bill, I don't see how a White House Commission is all that relevant.

By this logic we can't really even discuss private SS accounts since there aren't any details available right now.  But based on the best information currently available we can guesstimate what such a proposal would be like.

And it is honest to call a rate of growth reduction a cut because it is a cut in buying power (which is much more important than just the straight # of $'s).

We can discuss the principle of investing the Social Security tax in the market, the financial solvency of the system as it stands, and countless other parts of the issue.  What shouldn't be done is to imply that benefits will be cut when no such thing has been proposed because it is outright misleading to do so.

And no, cutting the rate of growth to an inflation index instead of a wage index is not a cut in buying power, by definition indexing something to inflation keeps buying power unchanged.

So now we have two lies from Wakie, one is that there will be benefit cuts, the other is that purchaisng power of benefits will decrease.  Care to try for 3?
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« Reply #21 on: February 09, 2005, 09:45:31 pm »
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End Social Security, but make sure everyone who puts money into the system gets it back. (So what if we go into a deficit? It hasn't stopped Bush before.)

SSN = Sinking Ship Number.
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« Reply #22 on: February 10, 2005, 02:46:03 am »
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We can discuss the principle of investing the Social Security tax in the market, the financial solvency of the system as it stands, and countless other parts of the issue.  What shouldn't be done is to imply that benefits will be cut when no such thing has been proposed because it is outright misleading to do so.

The principle is worthless without the details.  It is no great stretch of the imagination that when Bush talks about SS privatization he is thinking of the proposals from the commission his administration put together.  It is fair and honest to look to those as a "guideline" until Mr Bush or the Republicans in Congress provide something different.  To deny this is bullheaded at best.

If you only want to discuss the "general concept" of investing SS in the market then you must own up to the fact that you are allowing people to gamble with money which is specifically set aside as a safety net for them.  You must admit that some run the risk of losing all of their SS.

Quote
And no, cutting the rate of growth to an inflation index instead of a wage index is not a cut in buying power, by definition indexing something to inflation keeps buying power unchanged.

Cutting the rate of growth to inflation from wages or just straight up, it is still a cut.  A reduction in potential buying power, plain and simple.  Indexed off wages you have more, off inflation you have less.  Especially when you consider that inflation is an index which is determined based on a govt-determined set of goods and can easily be manipulated. 

Quote
So now we have two lies from Wakie, one is that there will be benefit cuts, the other is that purchaisng power of benefits will decrease.  Care to try for 3?

Just because you label something a lie doesn't make it so.  If anything you are being intellectually dishonest regarding what is being proposed.
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« Reply #23 on: February 10, 2005, 03:48:57 am »
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If properyl structured, no they don't have the risk of losing all their money.  You may not know much about the stock market, but you must know that index or mutual funds do not fall to zero.

If my benefits are indexed to inflation, then I never have a cut in benefits.  You can't "cut" benefits when the benefits that are supposedly being cut were never recieved.  I quote Howard Dean, whose response when accused of supporting "cuts" in Medicare in the mid-90s said in an interview with Geroge Stephanapolous:

GEORGE STEPHANOPOULOS: (Off Camera) Congressman Gephardt, I heard what you had to say just out there, sad attack, old politics. But I want to get you to respond to the substance of what he said about your support of Medicare in the past.

HOWARD DEAN: Of course, I support Medicare. That's ridiculous. I certainly have been very angry at Medicare over their bureaucratic stuff. You know, they're really difficult bureaucratically to deal with.

GEORGE STEPHANOPOULOS: (Off Camera) But he goes farther. He also says that in 1995 you specifically supported the $270 billion or so in tax cuts that were called for by Newt Gingrich.

HOWARD DEAN: I think that's very unlikely.

GEORGE STEPHANOPOULOS: (Off Camera) Here's the, here's the documents.

HOWARD DEAN: I know what Gingrich has said, but this ...

GEORGE STEPHANOPOULOS: (Off Camera) This is what Congressman Gephardt is saying about 1995, and those are the clips supporting it. It's pretty clear that you said you would accept a seven to ten percent cut in the rate of growth of Medicare, which ...

HOWARD DEAN: Oh, the cut -cutting the rate of growth. That's much different.


Your next Party Chairman seems to agree with me, that cutting the rate of growth is NOT a cut.

And you claim that inflation is "easily manipulated".  This is the kind of goofy Democrap conspiracy theory stuff sane people hate.  Am I supposed to believe that the Bush administration is going to alter the inflation rate artificially to screw the elderly?  That is so insane, and so unsubstaiated the he has any such intention, that you essentially lose the debate right there.  You've made several remarks that you can't substantiate except with rampant speculation, never producing any evidence aside from saying that some, though not even all of them, just a few of these are options, only options, presented in a commission report, not legislation just a commission report.

You have become a somewhat paranoid luantic.  The govenrment will lie about the inflation rate to screw the elderly?  Can you even come close to substantiating that?
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« Reply #24 on: February 10, 2005, 12:45:50 pm »
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There is ALWAYS risk associated with the market.  Money can be lost.  Fund managers can make severe mistakes.  Unforeseen events (Sept 11th for example) can significantly shift the value of stock and bonds.  That being said, unless someone has inside information they are usually better off letting a fund manager handle their money.

My concern is that this recreates an environment similar to the late 90s when many people were trying to "beat" the market and, in actuality, were losing a great deal of money in transaction fees.

Sure, you could set up an environment to force people to invest in a Warren Buffett controlled mutual fund and odds are everyone would profit.  But, based on the report which the Bush admin previously issued, that doesn't look like what they're planning.

As for the inflation index ... have you ever checked out some of the goods that are in there and some that are not?  There was a big todo about this a few years back.  Computers were not included but 2-way radios were.  So what I'm getting at is that it is, to me at least, less of an issue of politicians manipulating the #'s to make themselves look good and more an issue of the index being outdated and not necessarily representative of reality (whereas the wage index is a flat # ... no comparison of apples and oranges).
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