And yet another phony crisis

POSTED BY: SignyM
UPDATED: Saturday, January 29, 2005 01:35
VIEWED: 7733
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SOUNDHACK

Tuesday, January 18, 2005 8:24 PM

I think we are getting to the crux of the debate. The move towards privatization is not about "saving Social Security," in the sense that "save" means people in the future will get the same guaranteed benefits as today. People who are for privatization are really after more efficiency--they view it more efficient to have everyone invest their own money the way they see fit.

What they don't realize (or don't want to admit) is that efficiency is only one part of the equation. What happens if another stock market crash happens and people who foolishly (but efficiently!) invested all their money in stocks lose everything? What about people who are either too busy or too dumb to put aside some of their money or to invest wisely? People who are for privatization apparently think "why should I care if there are people who can't manage their own money, they deserve what they get"

Government is not meant to be efficient, thats what corporations are for. It is meant to provide services in as equitable a manner as possible. It is up to government to worry/care for the less advantaged/less smart/less motivated citizens among us, for in general individuals are too selfish to care.

Now if you think it "wrong" for government to take your money "without (your) permission" and give it to people less well off than you, then consider the consequences. Poor/sick people won't go away if just cut off services. They might turn to crime, or pan handling, or whatever, reducing YOUR quality of life too. Would you rather pay say 1 dollar today to support social entitlement programs or 5 dollars tomorrow in health insurance to make up for uninsured people using resources, or 10 dollars next year barricading your home from rioters ?

CONNORFLYNN

Tuesday, January 18, 2005 8:59 PM

Quote:
Originally posted by soundhack:
People who are for privatization are really after more efficiency--they view it more efficient to have everyone invest their own money the way they see fit.

I think that is a very true statement. The only thing people forget and it's easy too. It's easier to make money if you start with money. Which means that the folks who will benefit from the privatization of Social Security..will be those who are middleclass or wealthy. Anyone who lives week to week..because thats all they can afford to do are screwed.

It's a case of "The Rich get richer and the poor get poorer".

Also food for thought : Do you REALLY think teh government is going to allow you much choice in where your Social Security $'s are invested? That is such a heavy risk..because there are gamblers and dumbasses out there who wouldn't know a good stock versus a sham. NO..the government will place your money in the stockmarket for you. Declaring that they have your best interests at heart, all the while Big corporations who kiss enough politician's asses (AKA Payoffs- Marc Rich anyone?!) will become high on the list of "Good" Stock picks..whether they perform or not. US worker's dollars up for grabs to the highest bidders. I can see it now.. "US Social Security Stocks PLUMMET, Wall Street Shocked, Retirees in Ruin".

FINN MAC CUMHAL

Tuesday, January 18, 2005 11:12 PM

Quote:
Originally posted by soundhack:
Now if you think it "wrong" for government to take your money "without (your) permission" and give it to people less well off than you, then consider the consequences. Poor/sick people won't go away if just cut off services. They might turn to crime, or pan handling, or whatever, reducing YOUR quality of life too. Would you rather pay say 1 dollar today to support social entitlement programs or 5 dollars tomorrow in health insurance to make up for uninsured people using resources, or 10 dollars next year barricading your home from rioters ?

Oh come on now! If you don’t fork over your hard earned money to the government, some lowlife might come to your door and break your fingers. (hint, hint) I have a 16-gage that works just as well to curb that problem and it’s a lot cheaper then any entitlement program I’ve seen. One can employ threats both ways. The end result is that no one is talking about taking money away from the less advantaged, but I work hard for my money and I believe that I have a right to know that the money which the government takes is being used to its best effect, not just thrown into entitlement programs supported by flimsy threats of social disarray.

I don’t think that anyone is suggesting that Social Security be turned into a 401K plan. I think the argument is that a part of Social Security be invested in order to offset the inherent inefficiency in the system. The so called "safety net" will remain, in as much as it exists at all. Otherwise the only solution will be to continue to raise taxes to fill the proverbial bucket full of holes. One can of course validly criticize this solution, but ultimately many of those who are criticizing it seem to have no other solution other then to insist that nothing is wrong. That is certainly as much smoke and mirrors.

I take issue with the idea that the only role that government must play is to cater to “less advantaged/less smart/less motivated citizens among us.” This is typical socialist rhetoric. The government has as much responsibility to provide for the well being of the more advantaged/more smart/more motivated citizens. Particularly the more motivated citizens as they are likely to be the strongest economic asset, from which those taxes come to help all those less advantaged types.

NEUTRINOLAD

Wednesday, January 19, 2005 1:44 AM

Quote:
Originally posted by SoupCatcher:
* I'm currently slogging my way through the recent New York Times Magazine article relating to this debate. So my opinions may change in the next day .

I've read the article, and I think it will reinforce what you've already said here.

And the reason I don't like calling SS a retirement fund is not only because I believe it isn't one, but because doing so changes the terms of the debate.

SOUPCATCHER

Wednesday, January 19, 2005 9:31 AM

Quote:
Originally posted by NeutrinoLad:
I've read the article, and I think it will reinforce what you've already said here.

You're right. It was a long read but well worth it, IMO. Here's a link if anyone else is interested: http://tinyurl.com/685fn . I especially enjoyed the historical background on Social Security that the author included. Most of the stuff that happened with the program pre-seventies was new for me. I've been tracking this topic for the past few months through only a few filters (the predominant one being Kevin Drum at Political Animal) so it was nice to see an outside confirmation.

---------------------
"What sort of raw meat do you people feed your cruiser captains, Hamish?" - Queen Elizabeth III of Manticore

RUE

Thursday, January 20, 2005 3:14 AM

There is another part to the debate: when pressed with the information that SS is not (and will not be) *** unable *** to pay a benefit, the Bush administration shifted gears and started hypothesizing a 'doomsday' crisis. They claimed there would be an actuarial revolution. In this, medical technology would so extend life spans that SS WOULD be in crisis. This is just nonsense.

A simple examination of other rich, high-technology countries shows the fallacy. They all have socialized medicine, and all have longer life spans than the US (by about a year, give or take). While they are having issues that have to do with birth-rates as well as life span, they are not facing a geriatric problem of monstrous proportions.

Medical technology will probably advance, though massive extension of individual lifespan is in doubt (for reasons that have to do with the number of possible cell divisions and other purely biological factors). In addition, to make the most out of your own individual potential lifespan, there has to be too much good medical history over a lifetime. Most people in the US have cr*p medical care or none at all, bad diets, little free time, and exposure to too many toxins. To claim that a high-technology intervention can reverse a lifetime of medical insult over all organ systems and result in a vastly longer life is truly mind-boggling. (You have to improve all organ systems at the same time - it doesn't help to have a great CVS, skin, brain, and liver, but no bone marrow. One thing which is irretrievably sick will kill you.) So the conclusion that it will result in a major shift in individual lifespan is simply silly.

But even assuming such a miracle treatment would do all that, high technology treatment is 1) not distributed widely in the US - it only goes to the most fortunate who can afford to pay and 2) potentially even large gains in lifespan made by a small number of people (as in the US with heroic treatments at life's end) have miniscule effect on average lifespan compared to small gains made by large numbers of people (as in the rest of the other developed countries). Unless medical DELIVERY in the US changes drastically, even major (high technology) lifespan improvements will not be distributed widely enough to shift the average.

So, by using the other countries as a maximum limit, you can see that *** hypothesized *** improvements in US life spans (courtesy of high technology) will have minimal effect (a maximum of a year or so) on average lifespan. Therefore, it will have minimal effect on SS, which is contrary to what they claim.

SIGNYM

Friday, January 28, 2005 5:34 PM

Just going to add that this is typical of the Bush administration. The thinking appears to be fully delusional. They would rather trust our nest egg to financial markets and corporations apparently not having clued in to Enron-style corporate corruption (But oh yeah- Ken Lay was Bush's best buddy, wasn't he?). To quote the NYTimes business magazine:

Federal Reserve Chairman Alan Greenspan told Congress earlier this year that everyone knows there’s a Social Security crisis. That’s like saying "everyone knows the earth is flat."... The truth is there is no Social Security crisis, but there is a potential crisis in retirement income security and there may be a crisis in the future in U.S. financial markets. It’s this latter crisis that Greenspan actually is worried about.

The funny thing is, it's not like we don't have REAL problems to worry about! The government deficit and negative balance of trade are sending the US dollar to new lows. Saudi Arabia carried our debt for decades, the torch was passed to Japan and then China... but even China is beginning to question their investment. Central Banks in the past week decided to increase their holdings of Euros and decrease dollars.

This is all a DIRECT consequence of the Bush administration's refusal to face facts and insistance on engaging in phantasmic, religious (if-you-believe-it-will-happen) thinking. And unfortunately, half the US population seems content to follow the leader, lemming-style. Denial is comfortable, but dangerous. Hitting bottom will be a very rude awakening.

SIGNYM

Friday, January 28, 2005 5:39 PM

Huh! How did THAT happen???

SIGNYM

Friday, January 28, 2005 5:48 PM

Chile has been extolled as an example of how privatized retiremetn systems should work. Yet, DESPITE an impressive 10% return on investments

"Among the complaints most often heard here is that contributors are forced to pay exorbitant commissions to the pension funds. Exactly how much goes to such fees is a subject of debate, but a recent World Bank study calculated that a quarter to a third of all contributions paid by a person retiring in 2000 would have gone to pay such charges. "If people really had freedom of choice, 90 percent of them would opt to go back to the old system." "

NEUTRINOLAD

Friday, January 28, 2005 10:23 PM

Quote:
Originally posted by SignyM:
Chile has been extolled as an example of how privatized retiremetn systems should work.

Wha?!?
Who is citing Chile as an example?
Who would be so mad? Was it W or one of his henchmen? Can we just put this in the category of "misstatements" such as, "Pakistan is an example of a thriving democracy?

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