March 14, 2005
40 Acres And A Social Security Check
Don’t be alarmed here, but I should be dead right now, or in jail. I could justify by expanding the odds to include serving in the military, but it is a known fact that upon reaching the age of 30, a Black male has a 2 in 3 chance of likely being killed or incarcerated. Yet, by no measure should you assume I just ‘lucked out’. I will forever appreciate the education provided me by the Chicago Public School system, thus by taking advantage of what my committed teachers provided, my chances of beating the odds improved dramatically.
However, now there appears to be a downside to such a personal feat - I am no longer considered an ideal benefactor of George Bush's Social Security Overhaul Plan.
Like much of Bush's current stealth propaganda campaign to employ the successful tactics behind the Iraqi Invasion, it's best not to ask the White House for more details. I've lost my chance to be that misplaced, fully vetted, affable Black panelist on stage with the President, sternly prepped in advance not to ask how having a supposed shorter life span is less imperative, than managing my own private account?
Paul Krugman of the New York Times fills in the details of what plainly is a desperately, abhorrent sales pitch, touting a plan that would actually do more harm to senior Black recipients. In addition, freshman U.S. Senator Barack Obama (D-IL) has obviously found his bearings, and has added a credible voice representing a constituency with high stakes in this debate.
Upon entering the Social Security debate recently, NAACP Chair Julian Bond articulated why his constituency's reliance on this entitlement in their later years, demonstrates the very intent of FDR's vision. One compelling point he offered is that twice as many Black married couples depend on Social Security as their entire retirement income (compared to White couples), while Blacks in their 50s' are twice as likely to become disabled.
During the just concluded legislative break, many Republican lawmakers went back to their districts only to find vocal, if not outright hostile opposition to Bush's plan and his proposed budget cuts. Facing a crowd not buying his flawed sales pitch, Bush's chief Social Security proponent in the U.S. Senate Rick Santorum (R-Penn) remarked how well organized the opposition appeared to be.
But, it also takes a substantive and factual argument to effectively counter the Republican propaganda, filtered through their conspiring minions in the MSM (Murdoch Seduced Media). The AARP's resistance and efficient education of its members, can be measured by the fact that those operatives behind the Swift Boat smear campaign have now been deployed to silence them. What must not be overlooked however is the strong footing the Democratic leadership has gained on this issue, by having equal success in connecting capably with wary Americans.
Bush's obvious failure to dupe the nation bodes well beyond protecting Social Security. It may be the startling alarm that finally wakes us from our long indifference.
Posted by Bert M. Caradine at March 14, 2005 07:17 PM
Bert,
Your thoughts are very encouraging to me. I’ve been worried that nobody would realize that the Bush plan is essentially to cut benefits for African Americans. I’m glad to see that the Democrats have gotten their act together on this one.
By the way, that’s an unbelievable statistic: 2 out of 3 Black men are either dead or in jail by age 30! Wow.
Ransom:
Actually according to BushCo, Black Males should support Privatization because odds are they will be DEAD before they reach retirement. They forget to mention the high mortality rate of Black BABIES or the fact that Blacks have poorer Medical Coverage if they even have Insurance.
Have you seen the two Gays Kissing in the anti-AARP ad the Swifties ran?
Posted by: Aldous at March 14, 2005 08:27 PM
Bert:
http://www.clintonfoundation.org/120302-sp-dlc.htmIf you don’t like privatizing Social Security and I don’t like it very much, but you want to do something to try to increase the rate of return, what are your options? Well one thing you could do is to give people one or two percent of the payroll tax, with the same options that Federal employees have with their retirement accounts; where you have three mutual funds that almost always perform as well or better than the market and a fourth option to buy government bonds, so you get the guaranteed social security return and a hundred percent safety just like you have with Social Security.
I wonder why Democrats demonize Bush on SS, but not Bill Clinton when they are both for private accounts? I think it has to do with political bias since one is a Democrat and one is a Republican.
Clinton had a plan to save Social Security that he saw as in Crisis. Bush has a plan to save SS because he sees it in crisis.
What is the current Democratic plan, other than to immitate and ostrich?? Maybe to immitate Sargent Shultz from the old TV show “Hogan’s Heros” (1965)? “I see nothing!! I see nothing!!”
What is the Democrat solution today??
CH
From the same Clinton speech:
If we don’t modify the tax cut to have more tax cuts now but we reinstate fiscal responsibility over the long run, we’re going to be in real trouble there. So, what’s our option? If you don’t like privatizing Social Security and I don’t like it very much, but you want to do something to try to increase the rate of return, what are your options?
Craig,
This is the reason support for Bush’s private accounts plan has dropped to 39% percent - the blatant distortion of the Right’s propaganda! This means 56% percent of Americans went searching for more information because they were suspicious of what they were hearing from the Republicans, and found elsewhere more credible arguments to the contrary.
If you want to learn of the Democrat’s plan and maybe some recommendations from the AARP, I’ll leave you to find those links in my post, you seem to have overlooked.
Posted by: Bert M. Caradine at March 14, 2005 11:19 PMBert:
I looked at all your links. Where specifically is the democratic or african american answer to the SS problem??
Or what is your answer??
Craig
Posted by: Craig Holmes at March 14, 2005 11:42 PMBert:
Democrats 1998 via Bill Clinton:
Save Social Security first.Tonight, I propose that we reserve 100 percent of the surplus – that’s every penny of any surplus – until we have taken all the necessary measures to strengthen the Social Security system for the 21st century.
http://www.washingtonpost.com/wp-srv/politics/special/states/docs/sou98.htm
Democrats 2005 via Senator Harry Reid:
Contrary to many claims, Social Security is not in crisis.
Which Democratic party do you want me to believe??? Bill Clinton’s in 1998 where there was clearly a crisis or Harry Reid’s of 2005 where the crisis is a Republican invention.
By the way here is another quote from Bill Clinton in 1998
Saddam Hussein’s Iraq reminds us of what we learned in the 20th century and warns us of what we must know about the 21st. In this century, we learned through harsh experience that the only answer to aggression and illegal behavior is firmness, determination, and when necessary action.In the next century, the community of nations may see more and more the very kind of threat Iraq poses now a rogue state with weapons of mass destruction ready to use them or provide them to terrorists, drug traffickers or organized criminals who travel the world among us unnoticed.
If we fail to respond today, Saddam and all those who would follow in his footsteps will be emboldened tomorrow by the knowledge that they can act with impunity, even in the face of a clear message from the United Nations Security Council and clear evidence of a weapons of mass destruction program.
Clinton of 1998 sure sounded different than Democrats today.
Craig
Craig said: I wonder why Democrats demonize Bush on SS, but not Bill Clinton when they are both for private accounts?
I can’t answer that one, since you have not provided a source for verifying exactly what Clinton proposed in the way of private accounts.
I think it has to do with political bias since one is a Democrat and one is a Republican.
That may or may not be true, depending on whether there are differences in the two plans. This much is clear to me, Bush has not offered one single proposal that would fulfill his promise to “save Social Security”. He has only propose privatizing up to 4% of deductions, and to my knowledge he has not clarified if he means 4% of employee contributions AND employer contributions or just one or the other. The deduction is 6.2% for employees and 6.2 or 6.3 for employers. 4% from each diverted to private accounts would divert almost 2/3 of all SS revenues away from the Social Security Program which has 3 types of benefits, retirement, survivor and disability benefits.
Regardless of what percentage, Bush’s only plan is to cut revenues into the SS plan which will hasten forward the date at which its surpluses are depleted and it begins deficit spending from general revenues, or results in increased FICA revenues or decreased benefits.
I see where Bush has said for those born before 1951, will have the private accounts to supplement their reduced SS plan benefits. But, I was born in January of 1950, and that means the revenues diverted to private accounts threaten to reduce my benefits or result in increased taxes for my daughter, or result in the government deficit spending if I and 3/4 of Americans choose to remain in the guaranteed benefit SS plan rather then move to privatized accounts/SS plan combo.
Bush said it would be elective. Polls show the majority of Americans are not buying into the private accounts, which could translate in private accounts not reducing the SS plan benefits to paid out over the next 50 years significantly, which in turn means an earlier shortfall for SS funding that now exists if we do nothing.
Clinton had a plan to save Social Security that he saw as in Crisis.
I would like to see the quote from Clinton. It would be interesting to see the tense of his verb: is, will be, or headed toward.
Bush has a plan to save SS because he sees it in crisis.
Yes, I have seen him say that.
Posted by: David R. Remer at March 15, 2005 02:04 AMCraig,
As I’ve stated previously in a similar fashion on my Bankruptcy Bill post, I will not participate in your cat and mouse game of willful ignorance and dismissal of facts you deem partisan.
Posted by: Bert M. Caradine at March 15, 2005 02:25 AMComment Deleted
Aldous, let’s Critique the Message, Not the Messenger. —WatchBlog Manager—
Posted by: Aldous at March 15, 2005 03:12 AMBert and David:
Here are the quotes from Bill Clinton:
President Clinton: “This Fiscal Crisis In Social Security Affects Every Generation.†(President Bill Clinton, Remarks At Georgetown University On Social Security, Washington, DC, 2/9/98)
President Clinton: “[F]irst, And Above All, We Must Save Social Security For The 21st Century.†(President Bill Clinton, State Of The Union, 1/19/99)
President Clinton: “So That All Of These Achievements – The Economic Achievements – Our Increasing Social Coherence And Cohesion, Our Increasing Efforts To Reduce Poverty Among Our Youngest Children – All Of Them Are Threatened By The Looming Fiscal Crisis In Social Security.†(President Bill Clinton, Remarks At Georgetown University On Social Security, Washington, DC, 2/9/98)
My point is that if a Democrat President and a Republican president are saying the same thing then we should listen, and not dismis the proposition as propoganda.
One post that was deleted suggested that I was a professional blogger. That is funny.
Actually I do have some experience in helping people retire. It is very common for people to have not enough money to retire on. Let me give you a common example. (Made up numbers, just stick with the concept).
Lets say you want to retire at age 62 on $4,000/month and are contributing to your IRA at $3500/year earning 8% return. You do a plan and it says you need to vastly increase your savings if you want to retire.
There is another option. Usually if you solve the problem with three ideas, instead of one, (increase savings in this case) it is much more “doable”.
For instance in the hypothetical it is common to day to a client. Lets increase your savings by $100.00 a month, increase your return to 9% (a little more risk here), and move your retirement date to 63. Each idea only has to carry a third of the the burden.
The reason why the debate is soooo hard right now is both sides are coming to the table with two few solutions. The democrats want to only “increase savings” and the Republicans want to only increase rate of return through private accounts. That is why there is so much division.
Patrick Moynahan was on the right path with incrementalism. He wanted private savings accounts but only on a small but increasing way. So Craig’s answer that I have posted in other threads is all three. Modestly raise the retirement age, raise taxes modestly on those higher wage earners, and start private accounts for the young with modest amounts of their savings.
I am not stuck on any “one” part of the above solution. I do however believe both Bill Clinton and George Bush that there is a coming crisis in Social Security that needs to be addressed, and I also believe that it should be addressed with at least three ideas if not more, and not just one silver bullet. I also believe private accounts should be a part of the mix. Should three or four ideas be brought forth the poll numbers will reverse themselves.
Craig
Posted by: Craig Holmes at March 15, 2005 11:38 AMBert—
Great article. Bush totally ignores those who might use the disability portion of Social Security. Someone very close to me is on SS disability without which she would be in a nursing home, or worse homeless. Bush, as usual is missing the big picture; his limited mind is only able to grasp so much.
But SS is is trouble, or will be by 2042, I am surprised and disappointed that the Democrats have not offered their own plan to fix it.
I think the Democrats have not offered an alternative because it would get shot down either way. If they are waiting for a proposal, perhaps they are waiting for Hillary in 2008 but that would be a risque and dumb move. I think the Democrats are going to campaign and fillibuster whatever proposal until they see something good. So far it’s working. 2006, I think is the year where all hell breaks loose on this debate.
Posted by: Leon S. Blythe at March 15, 2005 02:21 PMLeon:
I think the Democrats have not offered an alternative because it would get shot down either way.
I think you are right. I think what the only tools the Democrats have in their tool chest is to raise taxes or lower benefits. Those are the only other tools I am aware of to fix the problem.
It is interesting how now they chastize Bush for saying there is a crisis when that was Democratic thought not too long ago. POLITICS!!!
Craig
Posted by: Craig Holmes at March 15, 2005 02:43 PMCraig, thank you very much for the source on Clinton’s words. Much appreciated.
As a result, I have only a small pedantic disagreement with your contention that Clinton and Bush touted the crisis in the same way. Clinton’s reference was to the future as evidenced by his use of the word ‘looming’, meaning coming or ahead. Bush began with stating the system is in crisis without qualification to time.
It is however, a small point, since, as your references point out, both Bush and Clinton intended to use the attendant fear that comes with the word ‘crisis’ for political advantage. Thus, they both failed to be honest with the public. Honesty would require either president to declare the system is healthy now, but, won’t remain that way unless changes are made very soon. That was the truth of the matter and neither president chose to deliver the truth to the people.
Mr. Martin, both Craig and Leon are right. If the Dem.’s come out with a plan to ‘really’ fix SS they will have to either propose lifting the income caps on deductions revenue into the system, or extend the retirement age to a higher number, or means test benefits paid out, or some combination thereof.
Regardless what they propose, the spotlight will then fall upon the objections some portions of society will have with any of those proposals. Hence, the spotlight will be diverted from the private accounts plan which does not add one dime of revenue or anything else to actually save the SS system which the President said he wants to do.
Hence, politically speaking, the Democrats have no choice but to avoid proposing a plan until private accounts cease to be the primary fix the Republicans offer, which is no fix at all.
Posted by: David R. Remer at March 15, 2005 04:51 PMDavid wrote:
If the Dem.’s come out with a plan to ‘really’ fix SS they will have to either propose lifting the income caps on deductions revenue into the system, or extend the retirement age to a higher number, or means test benefits paid out, or some combination thereof.
And, in comparison to Bush’s plan to gut the system in favor of risky stock based private accounts at a projected cost of $1-5 Trillion dollars, I have no doubt such a plan by the Dems would be an easy sell!
Right now, the Democratic leadership knows for certain, offering up any details of a proposed plan is futile, and yes, politically risky. As Rep. Charles Rangel has pointed out, not one Congressional Democrat has been approached by the White House in an effort to broker a compromise. My U.S. Senator Dick Durbin (D-IL) recently remarked to a personal friend of mine, that there just is no working with his colleagues from across the aisle.
They are ideologically driven, uncompromising and have a ‘win at all cost’ mentality, he said. Remind you of anyone here at WB?
And, thanks for the kudos V. Edward.
Bert,
There are a few Democrats who are ideologically driven.
“I hate the Republicans and everything they stand for,” former Vermont Gov. Howard Dean told Democrats gathered at a Manhattan hotel, in quotes picked up by the New York Daily News.
Republicans don’t “feel the love” when your head guy talks like this!!
Craig
Thanks Bert for an excellent article with excellent links. One piece from the Krugman article which I feel is worth emphasizing is:
Mr. Bush’s remarks on African-Americans perpetuate a crude misunderstanding about what life expectancy means. It’s true that the current life expectancy for black males at birth is only 68.8 years - but that doesn’t mean that a black man who has worked all his life can expect to die after collecting only a few years’ worth of Social Security benefits. Blacks’ low life expectancy is largely due to high death rates in childhood and young adulthood. African-American men who make it to age 65 can expect to live, and collect benefits, for an additional 14.6 years - not that far short of the 16.6-year figure for white men.I can’t see how Bush’s attempt to portray the current Social Security benefits as disadvantageous to blacks as anything short of despicable. Compassionate conservatism, indeed! It appears that Bush has exposed a crisis, but the crisis is the appalling death rate of minority infants and youth. Let’s work on that immediate crisis, Mr. President.
(I too was shocked by the 2 out of 3 statistic. Even if that means dead or having been in jail at least once in their life, that’s a dismal statistic.)
Posted by: Walker Willingham at March 15, 2005 05:43 PMBert and Walker and David:
I would be interested in your thoughts on this Democratic idea that appeared in the LA times recently:
Rep. Harold E. Ford Jr. (D-Tenn.), who is black, this month created the bipartisan Congressional Savings and Ownership Caucus, adopting the same language used often by Bush in promoting what he terms an “ownership society.” Ford has also proposed legislation that would create private accounts on top of the present Social Security system, leaving the current payroll tax system in place. Under his proposal, the government would put $500 into the account of every American at birth.
here is the link:
Craig
Posted by: Craig Holmes at March 15, 2005 06:01 PMGlad you appreciated the piece, Walker.
The passage you cited from the Krugman article noting life expectancy for Black males is 68.8 years, made me think of a bit of personal history that might be relevant, if not ironic.
My father and his two brothers all lived to be into their mid-Seventies, and their father lived to be 92 years of age. Yet, they all drank, smoked and chased women, throughout their lives! I quit smoking 5 years ago, drink moderately and exercise regularly.
Now do you see my motivation to see Social Security unchanged?
Posted by: Bert M. Caradine at March 15, 2005 06:31 PMI tried searching for that NY Daily News quote and didn’t find it. I can believe Dean would say he hates what today’s Republican Party stands for. I kinda doubt he’d say he hates Republicans, period. I mean his late father was a Republican and his mother may still be. And he himself was a Republican in his youth.
What’s the source? A right-wing blog?
And I don’t think Democrats are feeling any love from right of the aisle either. I don’t think we need to be apologizing for expressing frustration with the ruthless partisan practices being employed by the Republican Party. The whole idea of Checks and Balances that was built into the system by our forefathers would appear to be puposely eroded away by those currently in power.
Posted by: Schnee at March 15, 2005 07:26 PMSchnee:
I apologize for not showing the URL.
http://www.nydailynews.com/news/wn_report/story/276020p-236422c.html
In terms of a response to what you said, with the tone of the debate in our country, and in particular the last election, I think Jesus words are appropriate, “let he who is without sin through the first stone.”
I think there is plenty of blame for both parties, and I appreciate those like Joe Lieberman and John McCain who seem to be leading us toward a more civil tone.
Craig
Posted by: Craig Holmes at March 15, 2005 08:13 PMThe only way to save social security. Make people pay into social security no matter what their income is. There shouldn’t be any cap on people who make more then 100K. Increase the retirement age in moderate, slow, steps. Also, social security was in place to help those in need. People who have millions in assets, which I hope to with my investments, should not receive social security. Everyone knows that this is the only solution, but it would be unpopular among the rich, and the democrats don’t want to be accused of raising taxes. I think the Democrats need to be more focused on doing what is right, rather then what is popular. If the American people see the Democrats focusing on what is best for their country, rather then worrying so much about their image, they will gain political control again.
Ivan
Craig, Ford is right about concept. He is wrong about timing. Bush et. al. will end SS if given half a chance with his Private Accounts proposal. Democrats must bide their time until it is clear Bush’s privatizing of SS is irrevocably lost on the American Public. That time is coming shorty according to polls. But, the polls are also showing that the longer Private Accounts are on the table and being pushed, the more Americans join the Anti-Private Accounts camp. As long as public opinion is continuing to sour on Bush’s proposal, Democrats need to bide time and let the trend play out.
Then, and only then, should they tout Ford’s message which has some very positive merits from a progressive point of view. Timing is important here, and I think Ford is aware of it as he takes advantage of the Dem. silence by pointing the way to a saleable counter offer, but, not pushing the Party to adopt or push it at this time.
Posted by: David R. Remer at March 15, 2005 08:36 PMDavid:
I partially agree with you. I think the “one concept solution” will die soon. I do however favor multiple solutions. Both sides have veto power.
I think Ford is very likely to get his way because of simple politics. Republicans know that if they get only 10% more of the Black vote, it could make a huge difference nationally. So I think private accounts will be a part of a solution or there will be nothing done. (maybe for another 7 years).
Ivan:
I disagree with your “let the rich pay the whole bill” approach. First of all it isn’t practical. It wont pass and be signed into law. I think there is room for some modest increases in taxes however.
Craig
Posted by: Craig Holmes at March 15, 2005 09:41 PMSkepticism of Bush’s Social Security Plan Growing - Washington Post 3.15.05
Posted by: Bert M. Caradine at March 16, 2005 01:05 AMCraig, what is the point of keeping private accounts on the table if 3/4 of Americans are opposed to it? Can you really find any political wisdom or smarts in that move? I can’t, and I think it is telling that Bush won’t drop it. I think he has backed himself into a no win corner on this one politically. Drop it, and his supporters get pissed. Keep it, and he not only loses the majority of voters on this issue but he gives fuel his opponents that has real endurance legs.
Posted by: David R. Remer at March 16, 2005 02:09 AMI am a Republican and have a couple of honest comments about social security in general. The way I see it in the State of the Union address President Bush asked for a bi-partisan effort to fix social security, the only thing he has asked for is that private accounts be a part of the plan however he has not offered any solutions to address the solvency, how to fund the private accounts, disability benefits, etc. What strikes me the most is that after Bush one the election there was all this talk of whether he would work with the Democrats in a bi-partisan spirit and what I saw at the SOTU address was an invitation to the Democrats to solve this problem together. The Democrats have responded first by saying there is no problem, then by saying its too far in the future to worry about now to now they are saying there is a problem but private accounts can not be a part of the solution. In typical Democratic fashion they have not come up with any ideas of their own. If the Democrats would act like they care more about the people of this country instead of defeating the Republican agenda they could get out in front of this issue and solve a real problem that needs to be solved. President Bush is asking for their help and ideas for social security and all he has asked for is that private accounts be included. I heard the media and other Democrats talk about a bi-partisan effort by Bush in his second term, Bush is asking for that, where are the Democrats to meet him half way?
Scott
Posted by: scott at March 16, 2005 12:13 PMDavid:
Because I think that if the Democrats try their “solution” they will get the same response. To raise taxes by the amount it will take to “fix” social security will create but opposite fire storm.
Then the Democrat leader says in essense “Social Security is not in crisis, because even in the end we can pay 80% of benefits”. You can say the same thing another way, “The Democrat position is to cut our children’s benefits by 20%.”
There are only three real answers that I know of. They are:
1. Reduce benefits
2. Raise taxes
3. Increase internal rate of return on the investment.
Bush is proposing number three. Democrats are saying 1 and 2. I am saying the answer in 1, 2, and 3 in moderation.
If the Democrats thought your idea would work they would be proposing it. They know what will happen if they propose it so they are not.
I also so some data that shows that President Bush is slightly more trusted on the issue of Social Security than Congressional Democrats. (Neither is trusted much, I remember numbers in the low forties for both).
Craig
Posted by: Craig Holmes at March 16, 2005 12:20 PMCraig, there is a big picture here. Greenspan and even conservative think tanks are telling Bush there is no growing the economy out from under the current debt levels. Greenspan is also telling Congress and Bush 2 things: our fiscal policy is dangerously heading in the wrong direction - increasing the national debt, and fix the soc. sec. financial problem very soon for the window of opportunity to do so will soon pass, and if that happens, there will be a shrinking of the middle class and consumption buying in the future like the US has not seen since the early 1930’s.
Greenspan says private accounts will do great things for national savings and increasing capital, but, no where does he indicate that getting rid of SS and replacing it with Private Accounts is a solution, in fact his testimony implies quite the opposite.
And that is another box the President and Congress are in. How do you divert funding from SS and save it at the same time. FACT IS: you can’t without increasing the national debt by a few more trillion dollars, which puts us at record levels of debt to GNP.
Greenspan is a Republican and serves at the pleasure of the President. Congress cannot expect him, to come out and spell out the scenario I just stated in the above paragraph. It would undermine the President. But, if anyone looks at his testimony and remarks over the last couple months, and puts the consequences together into a big picture, he is saying just that. Private Accounts which divert funding needed to support SS has devastating long term consequences to our national demand and consumption rate by the fastest growing segment of our society and the wealthiest age group in our society, the retired and soon to be retired, and those ill effects will be protracted over decades, not years.
Posted by: David R. Remer at March 16, 2005 01:24 PMBert - terrific article.
Ivan:
“The only way to save social security. Make people pay into social security no matter what their income is. There shouldn’t be any cap on people who make more then 100K.”
I agree completely.
“Increase the retirement age in moderate, slow, steps.”
I don’t agree with this, however. I don’t go along with the idea of forcing people who have worked hard all their lives to keep working when they’re getting old and/or have health problems. I believe the SS retirement age should only be raised by a couple of years at the most.
“Also, social security was in place to help those in need. People who have millions in assets, which I hope to with my investments, should not receive social security.”
Again, I agree. But I think perhaps such people might then be given some sort of a tax break, just to reward them for all the years they’ve been made to pay in to the system.
“Everyone knows that this is the only solution, but it would be unpopular among the rich, and the democrats don’t want to be accused of raising taxes.”
At this point it would be completely irresponsible for Democrats, if elected in the future, to not raise taxes on the Rich. The rich have not been paying their fair share of taxes for far too long, and Bush’s tax cuts have only raised that fact to new levels of obscenity.
“I think the Democrats need to be more focused on doing what is right, rather then what is popular.”
I agree with this so much that I actually left the Democratic party after the last (Republican rigged) election. Maybe someone like Dean can get the party back on track, but until that happens I will do nothing to aid and abet their abandonment of the historic goals of the Democratic Party - which was formerly to represent those who are not wealthy in this country while fighting hard for civil rights, freedoms and liberties for all American’s.
“If the American people see the Democrats focusing on what is best for their country, rather then worrying so much about their image, they will gain political control again.”
I have a feeling they don’t realize that they’ve been slowly destroying their image by not focusing on what is best for the middle class and the poor in this country. Unlike the Republican’s, the image of the Democrats and doing what is fair for the average earning citizen and protective of those who are poor are ideas that have always been inextricably linked.
Posted by: Adrienne at March 16, 2005 01:31 PMDavid:
Can you point me to where you are getting your numbers. Instead of getting into an arguement over whose numbers are correct, I will just use your source. I have a hard time believing we will top our debt load over 1945. We have a budget deficit of over 30% then.
CH
Posted by: Craig Holmes at March 16, 2005 04:35 PMFederal Budget broken down by agency.
How much the war in Iraq costs.
Posted by: Logan at March 16, 2005 06:40 PMDavid:
Craig, there is a big picture here. Greenspan and even conservative think tanks are telling Bush there is no growing the economy out from under the current debt levels.
I am not sure of your point here. If we could “grow out” of a debt that was 122.7% of GDP after WWII certainly we can grow out of our current debt.
Greenspan is also telling Congress and Bush 2 things: our fiscal policy is dangerously heading in the wrong direction
Yes but watch many commentators make the error of extrapolation. The error of extrapolation is assuming that Bush will continue on the same course even though the economy has transitioned from recession to sustainable growth. Presidents of both parties work to close the deficit in good times. Democrats (like Clinton) tend to favor tax increases, Republicans (Like Bush) tend to favor spending cuts.
What I am saying is you might as well as had George Bush sitting there telling congress it is time to cut the budget.
And that is another box the President and Congress are in. How do you divert funding from SS and save it at the same time. FACT IS: you can’t without increasing the national debt by a few more trillion dollars, which puts us at record levels of debt to GNP.
The economy can easily take on a few trillion dollars over a period of time to transition. The growth of the economy is pretty easy to calculate with a short cut. The nominal rate of growth (real growth plus inflation) is traditionally 6%. Using the rule of 72, if you divide 6% into 72 it will take about 12 years for our economy to double from 10 trillion dollars to 20 trillion dollars. (pardon the general numbers)
If our country averages a budget deficit of 3% of GDP over the next 12 years, which is a resonable proposition, our debt load should be about 10 Trillion. Using your number of 2 trillion for SS and the total debt would be at $12 trillion. That is not far from the same debt ratio to GDP that we have right now.
Craig
Posted by: Craig Holmes at March 16, 2005 06:52 PMCraig said: I am not sure of your point here. If we could “grow out” of a debt that was 122.7% of GDP after WWII certainly we can grow out of our current debt.
Then our economy was no very dependent upon other nations, nor did we have anything like the international competition for our products and services as we do today. That is why we can’t grow out of it today. Check out the conservative think tanks like the Heritage Foundation for detailed explanations.
The economy can easily take on a few trillion dollars over a period of time to transition.
Again, Craig, your analysis does not take into account the new and unique context upon which our economy depends. That is why economists of all persuasions are saying you are wrong, we cannot easily take on a few more trillion dollars. There are too many future contingencies that and dependencies beyond our control to allow our economy to survive such huge debt. They warn of our dependence on foreign investors both in treasuries and our stock markets, which were pretty much the only game in town afer WWII, but, today we have huge foreign market competition giving our investors competitive options to investing in the US if our debt load becomes too precarious and makes investing here more risky than in say Hong Kong, EU, India and others for the similar returns.
Our economy was largely insulated from global market cyclical ups and downs. That is absolutely not true today. The recession of 1999 was a global recession, only partially brought on by our tech bubble. The next global recession, and yes, there will be more, may occur entirely independently of anything our economy or markets are doing. In the past increasing debt was our answer to recessions. But what if our debt load is already near investors risk tolerance capacity when the next one hits? We then face not just recession, but, because of our inability to borrow more, we could face a depression or stagflation which would make the 1970’s look like a piece of cake.
Posted by: David R. Remer at March 16, 2005 07:12 PMBert,
I understand why you don’t want to see the retirement age raised, I don’t think anyone does. One of the major problems we face is our increased life expectancy. When social security was put in place, the average life expectancy was in the mid sixties. Now the average life expectancy is into the early eighties. That’s a bunch of social security. I don’t think that the retirement age can increase to over seventy, unless we discover the fountain of youth or something. We need to pay for these extra twenty years per person somehow. I am a registered democrat in the state of Utah, which basically means that I am a liberal republican. I am excited to see the republicans doing what they feel is right. They don’t care about their image or what people seem to think about them. They are very principle oriented at this time. The democrats need to focus on health care, education, and the economy. The democrats have the issues that could give them control, but for some reason they want to just trash on the republicans.
Craig,
It’s good to hear that you agree with modest income tax increases. I know the idea that the “rich pay all” will never pass and that is why no one has brought it up. I really think they need to lift the cap. Even if they said that all of your personal income over 100K would have a social security tax at 25% of the percentage they paid for income under 100K.
Ivan
David-
First of all I got Sirius today so I now consider myself fully informed from all sides! My three hour drive to Charlotte was filled with left, right, alternative, and in-between opinions on most every subject.
As to your “3/4 of Americans oppose it” comment someone on one of those channels said that the media has proclaimed many a political proposition dead only to see it inacted. Reagan’s tax cuts come to mind. Don’t think private accounts are DOA. They’re just not the entire solution.
Craig is doing a great job of laying out the case for a mutli-prong approach to addressing SS that includes private accounts. I also agree that the Democrats really have no political choice right now but to oppose them without offering substantial alternatives. But it can’t wait until 2008; something like this is a poison pill for a first term.
Posted by: George in SC at March 16, 2005 07:52 PMGeorge, thanks for chiming in and your good comments.
Craig is making a rational multi-prong case. But, Congressional Politics on this issue is going to be anything but rational. And the politics, in the end, is what will determine if SS reform has legs or not.
Simply put, Republicans have only one alternative to save SS and that is to deprive seniors of something either by increasing the retirement age, or decreasing benefits.
The Democrats have only on two alternatives to save SS, 1)means test benefits which will preclude or scale back on the wealthy getting anything from the SS plan except what they might get from private savings accounts and 2)elevating or deleting the cap on income from which FICA taxes are paid.
As you can see, prior to the 2006 Congressional elections, Democrats a few moderate Republicans are not going to find it politically possible to support depriving seniors of benefits they now receive under the plan. And conversely, Republicans are not going to find raising taxes on the wealthy or depriving them of a return on their FICA taxes to SS politically possible.
So, what we have is a political impasse, at least until after the 2006 elections. If Republicans lose seats in that election. We may not have reform until after 2008 or later. If Republicans hold their seats or increase them, then we may see SS reform along Republican lines, which in turn could threaten the 2008 Presidential election for Republicans.
Poltiically, this is a third rail. And for all the praise Bush deserves for forcing this issue to the fore as it should be, his proferring and trying to sell a alternate program while claiming to save the current one was a dismal failure and essentially closed the window of opportunity Republicans might have otherwise had on SS reform.
Posted by: David R. Remer at March 16, 2005 11:45 PMScott wrote:
The way I see it in the State of the Union address President Bush asked for a bi-partisan effort to fix social security…
What strikes me the most is that after Bush one the election there was all this talk of whether he would work with the Democrats in a bi-partisan spirit and what I saw at the SOTU address was an invitation to the Democrats to solve this problem together.
One question for you here Scott. Who should exactly make the first bi-partisan overture on the Social Security issue - Bush and the GOP (whose plan it is) or the Democrats?
As I wrote previously:
Right now, the Democratic leadership knows for certain, offering up any details of a proposed plan is futile, and yes, politically risky. As Rep. Charles Rangel has pointed out, not one Congressional Democrat has been approached by the White House in an effort to broker a compromise. My U.S. Senator Dick Durbin (D-IL) recently remarked to a personal friend of mine, that there just is no working with his colleagues from across the aisle.
I believe a compromise on private accounts could be brokered, as long as it exists along side a Social Security that is altered with pragmatic changes like raising the age requirement. The most dire predictions are based on stagnant economic assumptions, a refusal to recognize our relative financial health is a fluid state, dependent on more pressing crisis like a shrinking dollar and massive deficits.
Republicans start throwing around words like ‘compromise’ or charges of uncooperative Democrats, only when they can’t bulldoze through them. Where’s the attempt at Senate compromise on judicial nominees?
Or, is the ‘nuclear option’ an example of bi-partisan cooperation?
Posted by: Bert M. Caradine at March 17, 2005 12:40 AMBert and David:
Research should backup the use of synergy with a multi answer approach.
If Bush’s borrowing were reduced by two thirds, and the limit on taxes were raised over time to 100k or so and then indexed, and if there were some corresponding means testing so some future liabilities could be written off, I could see how many small solutions could create a positive snowball.
Just raising the retiremnt age by one year, makes one more year that medical is paid mostly by industry, and not by Medicare.
There must be a formula where doing what I decribed in the first paragraph actually reduces federal debt on a long term basis.
It can also be structured to benefit those who rely on Social Security the most.
Increasing the yield on investment even by 1 percent a year, is huge over thirty years. Private accounts can add a great deal to the younger workers retirement.
Changing the formula for cost of living so that it reflects increases in core living needs, say on the first $1,000 a month or so, but a lower amount for SS benefits over that monthly amount can save billions.
This multi tool approach seems to me to have common sense on its side.
It does have one downside. Neither party could claim credit for “saving Social Security”.
Craig
Posted by: Craig Holmes at March 17, 2005 01:25 AMCraig, there is no question that such compromise small changes made in the next couple years, could and would indeed solve the SS problem coming in a couple of decades.
There is no dearth of options as others have pointed out here at WB from ending the failed and extremely costly annual war on drugs to discontinuance of government subsidies of wealthier American’s savings through tax deferments of 401K’s and IRA’s.
The problem is President Bush. His idiotic move to promote a replacement plan and nothing else that provides no insurance for those adversely affected by economic and market shifts or a life of low earnings, stands starkly in the way of the political parties being able to get down to the business of solving the coming SS shortfalls a few decades down the road.
I saw an article this morning that obesity is reversing the long trend of increasing American longevity of life spans. Hell, that is a solution as well. Don’t stop the obesity epidemic and millions of Americans won’t live long enough to receive benefits which will partly make up for the shortfall. It is certainly not a solution I would endorse, but, as I said, there is a plethora of potential solutions.
Posted by: David R. Remer at March 17, 2005 09:16 AMDavid:
I was thinking today how else I deal with clients who have a problem like Social Security, meaning they aren’t on track to retire on time. It is important to make progress, but you don’t have to solve the whole thing at once.
From experience I know that clients change over time. The parameters they give varies every three years or so. In addition whatever assumptions are made usually are wrong when viewed a few years later. There is a huge margin of error in any of the projections we basing our discussion on.
My point is that the problem does not have to be solved this go around. The Nation needs however to make real progress. Five or six years from now, we will and should be discusing the next phases of the problem with much different facts before us, and a different demographic.
Craig
Posted by: Craig Holmes at March 17, 2005 04:45 PMBert - You asked who should make the bi-partisan overture. And I belive you have a good point here. It is the President’s responsiblity to either appoint a bi-partisan committee or to give a plan of his own. However, I still think that Democrats could score some political points by offering a plan themeselves, that being said it is still the President’s responsibility to begin this process and to date he hasn’t done that.
On the judicial nominees issue don’t even go there. Democrats are way out of line with their filibuster and I am glad to see the Republicans go after the “Constituational Option”. All I can say is Tom Daschle - and if Democrats don’t wake up to what the American people want they will continue to loose power.
Posted by: Scott at March 21, 2005 05:39 PMI still think that Democrats could score some political points by offering a plan themeselves,
By insisting Scott, that the Democrats produce a plan, starts from the erroneous premise that they believe a major overhaul of Social Security is needed - nothing could be further from the truth. If pressed to come up with a ‘plan’, I’d suggest it would recommend the status quo with minor, but effective tweaking; a willingness to find a consensus on allocating deductions to a private account in addition; but more importantly, a realistic plan to address our soaring debt and grave fiscal outlook.
On the judicial nominees issue don’t even go there. Democrats are way out of line with their filibuster and I am glad to see the Republicans go after the “Constituational Option”.
With all due respect Scott, by framing this in exactly the wrong legislative context, better familiarity with the dispute might be in order.
The Senate filibuster rule is merely a provision enacted by the body - independent of any protection prescribed in the Constitution - to respect and insure the will of the minority in shaping our laws and courts. However, as you’ve displayed here Scott, there is a false impression that the Senate filibuster is solely the machination of the minority Democrats. But, there are currently 55 Republicans, 44 Democrats, 1 Independent, and 60 votes needed to sustain a filibuster.
You do the bi-partisan math.
Posted by: Bert M. Caradine at March 23, 2005 03:00 AM
