Private accounts: The dumbest thing ever

[Wakie]

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.

[Wakie]

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

[Wakie]

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).

[Wakie]

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.

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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. 

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Just because you label something a lie doesn't make it so.  If anything you are being intellectually dishonest regarding what is being proposed.

[Wakie]

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).