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Monday, February 14, 2005

A Look at the Social Security Issue 

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Much of the social security debate is far too arcane and boring for me to get into but frankly heads do need to pay attention to this because once again Bush is trying to pull a fast one. He has resorted to his favorite tactic used repeatedly over the past four years to advance many of his questionable policies - fearmongering - arguing this time that private accounts are needed because, if no changes are made to the system, it will go bust without massive benefit cutbacks, tax increases and/or borrowing to keep it solvent. But take a look at some of the ideas he's been floating that underpin his privatization solution to this "crisis"?

First off, setting up the giant private account system that he's been heavily touting will suck mad money out of the current pay-as-you-go system used to pay the benefits of today's retirees, possibly to the tune of a 1-2 trillion dollar shortfall, if not more. Secondly, recalculating benefits so they are pegged to inflation rather growth in wages (which grow faster than the CPI), which Bush has also mentioned several times, is essentially cutting future retirees' expected benefits without explicitly admitting to doing so.

Either way, it looks like Bush's plan would mean borrowing (to cover the shortfall) and benefit cuts anyway which is bananas when even the government's own actuaries have said such a radical overhaul is probably unnecessary.

Here's a few links, for those who get turned on by this stuff, to help you decide for yourself if Bush is really on the right track with this whole privatization campaign. I think y'all know where I fall on the matter though especially if you read this site regularly.

Bush faces major political battle over Social Security

Paul Krugman says Bush is Gambling With Your Retirement.

In his State of the Union, the president never said, although it has always been implicit, that workers' retirement benefits from the government would be lowered if they chose to put tax money into personal accounts.

When it comes to President Bush's proposal to set up personal investment accounts as part of the Social Security program: As the saying goes, the devil is in the details, and the details are woefully lacking thus far. (full story from "Questioning Bush's plan on Social Security" Seattle Post-Intelligencer)

Allan Sloan's reasonably-balanced look at the issue.

House Speaker J. Dennis Hastert (R-Ill.) has warned the White House that voters are not yet ready to accept fundamental changes to Social Security as wary Republicans are cautioning the president to be as vague as possible about his plan. (full story from Washington Post) on Bush's Trust Fund f-ckery.

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