Just in time to answer my questions about what's really going on with Social Security reform, the Washington Post has a series of articles about it today
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3) The Republicans' main interest is in social engineering, not fiscal responsibility. The thinking behind private accounts has more to do with Bush's "ownership society" than it does with "saving social security". The idea is to make everyone a shareholder, giving them both a greater sense of responsibility for their own future, and a greater sense of participation in the economy. (Thanks, cos) The cynic in me can't resist pointing out that shareholders are more likely to vote Republican, and that increasing investment by U.S. workers will increase capitalization of U.S. firms, indirectly increasing donations to the Republican party. However, I'm actually willing to accept that the Republicans may well be advocating this change in the system out of a genuine sense of idealism.
But where does this leave the "widows, orphans, disabled, and surviving spouses"? That is, people who may never have "paid into" the system
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I feel that creating huge numbers of investment retirement accounts that have been sold to the public as a partial replacement for Social Security does at least three things:
1) It creates wealth for brokers and others in the stock market.
2) It artificially inflates the prices of American stocks (since I guarantee you this will never pass if there isn't an American-stocks-only rider in the bill) by pumping trillions of dollars into the market.
3) When the stock market collapses again, as economics and history both teach us it always does, the government will be expected to prop up these retirement accounts (and thus the market) or it can expect a 1920s-style march on Washington...or else we'll go back to a completely tax-supported Social Security system, in which case we're right back where we started but we're out several trillion dollars that we didn't have to spend.
I can see only one group benefiting from this, and it's neither the middle class nor the poor.
What really interests me about all this is just what "stocks" SS is going to invest in.
I don't believe for a moment that they will simply "index the market" as do you really think the US govt would own stocks in porn companies? How about abortion clinics? Condom makers? No, there will be a "basket" of companies who'se stock will be bought by the public...
Thus bringing about the most massive subsidy system ever to hit the airwaves.
The Social Security fund will become unable to meet its payout obligations in 2042 solely through new contributions and drawing down the Trust Fund -- i.e. the Trust Fund will be exhausted in that year -- only if the Social Security Administration's estimate for the nation's economic growth in the next 35 years is accurate. Note, however, that the SSA's estimates are always deliberately pessimistic -- highly pessimistic. During the Reagan era, when the Trust Fund was established, the SSA estimated that the Fund would be exhausted in 2017 or thereabouts. The US's economy would have to badly tank for a long period of time in order for the SSA's prediction
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Social Security and idealismcosJanuary 28 2005, 07:26:36 UTC
Yes, there is a kind of idealism behind all of this - conservative idealism. Conservative idealism involves the notion that people learn through reward and punishment, and that the world is basically meritocratic - those who have, deserve, and those who do not have, do not deserve.
For people who have this outlook, "common sense" makes it obvious to them that artificially propping up those who have not, is bad, even immoral: if they were deserving, they wouldn't be in need, and if they're not deserving, giving them what they did not earn reduces their motivation to become better. It upends the system of reward and punishment that is the basis of a good society, by effectively rewarding people for not being self-sufficient, at the expense of those more deserving people who areI cringe and recoil at this point of view, and find it morally bankrupt and irrational, but millions of people hold it. And to them, it's just common sense that social security as we have it now is a bad thing. They would like to see it gone, and sincerely
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But where does this leave the "widows, orphans, disabled, and surviving spouses"? That is, people who may never have "paid into" the system ( ... )
Reply
1) It creates wealth for brokers and others in the stock market.
2) It artificially inflates the prices of American stocks (since I guarantee you this will never pass if there isn't an American-stocks-only rider in the bill) by pumping trillions of dollars into the market.
3) When the stock market collapses again, as economics and history both teach us it always does, the government will be expected to prop up these retirement accounts (and thus the market) or it can expect a 1920s-style march on Washington...or else we'll go back to a completely tax-supported Social Security system, in which case we're right back where we started but we're out several trillion dollars that we didn't have to spend.
I can see only one group benefiting from this, and it's neither the middle class nor the poor.
Reply
I don't believe for a moment that they will simply "index the market" as do you really think the US govt would own stocks in porn companies? How about abortion clinics? Condom makers? No, there will be a "basket" of companies who'se stock will be bought by the public...
Thus bringing about the most massive subsidy system ever to hit the airwaves.
Reply
Reply
For people who have this outlook, "common sense" makes it obvious to them that artificially propping up those who have not, is bad, even immoral: if they were deserving, they wouldn't be in need, and if they're not deserving, giving them what they did not earn reduces their motivation to become better. It upends the system of reward and punishment that is the basis of a good society, by effectively rewarding people for not being self-sufficient, at the expense of those more deserving people who areI cringe and recoil at this point of view, and find it morally bankrupt and irrational, but millions of people hold it. And to them, it's just common sense that social security as we have it now is a bad thing. They would like to see it gone, and sincerely ( ... )
Reply
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