Friday, February 25, 2005

David Frum on Social Security

As PBS Watch noted, David Frum at National Review online gets it exactly right on the Social Security "Trust Fund." As David said on Feb. 22: Nobody is denying that the bonds and notes in the Social Security Trust Fund are valid. Of course they are. But when Democrats make this point, they are turning what is really an economic question into a legal one. Yes, yes, yes, the bonds are a binding obligation of the United States government. But the Dems want us to believe that they are also a valuable resource for the United States government - and that is hooey.

Yes, if you or I owned a big bunch of US government bonds, we'd feel pretty comfortable. We could cash them and retire to enjoy our claim on the future labor of others. But it does not do the US government much good to own a big bunch of its own bonds.

The Trust Fund is and always has been a dodge, in this sense: the economic problem of Social Security would be precisely the same if the Trust Fund had never been invented in the first place. It will not make the job of finding the money to pay the promised benefits even an iota easier after 2018 that the US government engages in a preliminary round of bond-cashing. It will still have to raise other taxes or cut other spending, just as if the Fund did not exist.

And as David said on Feb 23: Franklin Roosevelt separated Social Security from general revenues to create the illusion that this redistributive pension system was instead an individual saving plan. Because individuals were led to believe that they were getting back only what they had paid in, plus interest of course, they were persuaded to feel a stronger entitlement than they might have felt had they realized that some were getting back a whole lot more than they paid in and others rather less.

For that reason, Democrats have historically resisted what might seem like the obvious left-wing fix to the system: ie, scrap the whole thing, abolish the regressive payroll tax, raise income taxes, and fund pensions out of general revenues. That fix would have let the cat out of the bag. And so Democrats rejected Moynihan's tactically cunning solution as ultimately strategically unwise - and instead went along with a payroll tax increase that may have injured the people the Democrats claimed as their constituents, but nonetheless preserved what many Democrats regarded as an essential illusion.

As PBS Watch said the Social Security "Trust Fund" bonds are not in the same category as other Treasury bonds. If the government failed to pay on any ordinary treasury bonds, all treasury bond holders would immediately get the word and an economic panic of global proportions would ensue. However, there is only one holder of Social Security "Trust Fund" bonds, the U.S. government itself, which need not panic if Social Security is modified. If Congress decides to reduce, delay, or otherwise modify Social Security benefits, that amounts to a default on the "Trust Fund" bonds, no other type of default is available. But no panic need necessarily ensue, depending on how the change is handled politically. Any panic resulting from a "Trust Fund" default will be a politically engineered panic. Holders of real Treasury bonds should in fact be reassured by any move that takes the pressure of "Trust Fund" bonds. Their holdings would be incrementally more secure as a result.

GOPBlogers described Paul O'Neil's Retirement Plan which proposed that the federal government invest $2,000 for every newborn American, adding $2,000/year for each year until the child reaches age 18. Without adding a single cent beyond compounding after the child turns 18, he or she would retire at age 65 with $1,013,326 in the account, O'Neill reckons.

I don't know that I agree with Paul O'Neil's plan but it does show why the Democrats are so opposed to any form of privatization:

  1. They would not be able to spend that part of the SSI tax that the government put into the private plans. Since the primary purpose of the Democrats is to raise as much money in taxes that it can, and then spend that money to keep themselves in power, they are horrified at the thought that they might lose 30% of the SSI income stream and that those funds might be placed outside of their reach. They don't understand that it is the taxpayer's money; they view it as the government's money and they want it all.
  2. Once someone had enough in their private plan that could support them in retirement, they would not worry about what the government might or might not do with social insecurity so the Dems could not scare them on this topic.
  3. If a person owned his own retirement plan, and not the government, the Democrats fear they might become Republicans


Thursday, February 24, 2005

Who the Hell Do You Think You Bloggers Are?

PowerPundit referred to a post by IMAO which asked Who the Hell Do You Think You Bloggers Are?

  1. Who the hell do you think you are?

    I am a citizen of the United States of America, and I vote in every major election. Before I became disabled, I voted in every election, but now that I have to have someone help me to the polls, I sometimes skip minor elections.

  2. So, other than blogging, what's your job? Do you work at some fast food joint, dumbass?

    I am disabled so I no longer have a job, but when I did I was a computer programmer, systems analyst, systems programmer, and consultant.

  3. Do you have like any experience in journalism, idiot?

    I am literate, i.e. I am able to both read and write (something I am not sure schools today teach the students).

  4. Do you even read newspapers?

    I certainly read the Tulsa Tribune when it existed. Now Tulsa just has the Tulsa World so I just read the online websites of many newspapers, including New York Times, Washington Post, Wall Street Journal, and many others.

  5. Do you watch any other news than FOX News propaganda, you ignorant fool?

    Every Sunday I watch some of the Sunday Morning News Shows by the broadcast channels and CNN, just to see what the extreme left wing is saying

  6. I bet you're some moron talk radio listener too, huh?

    I seldom listen to the radio

  7. So, do you get a fax from the GOP each day for what to say, you @#$% Republican parrot?

    I do not have a fax machine, and I am capable of thinking for myself. Do you rely on daily faxes from the Dems?

  8. Why do you and your blogger friends want to silence and fire everyone who disagrees with you, fascist?

    I don't. I certainly read some conservative blogs, but I also read several left wing blogs, and I attempt to engage them in reasoned discussions. I find that most of them are incapable of reasoned discussions, however.

  9. Are you completely ignorant of other countries, or do you actually own a passport?

    It has now expired, but I certainly did have one before I became disabled.

  10. Have you even been to another country, you dumb hick?

    I have physically been to Mexico, Britain, Netherlands, Italy, Greece, Israel, and Kenya and I work on refurbishing computers which have been sent to a number of additional countries. What about you?

  11. If you're so keen on the war, why haven't you signed up, chickenhawk?

    I am 62 years old and disabled

  12. Do you have any idea of the horrors of war? Have you ever reached into a pile of goo that was your best friend's face?


  13. Have you ever reached into any pile of goo?

    You seem preocupied with goo. You need to stop reading Daily Kos and Atrios

  14. Once again, who the hell do you think you are?!

    I am a citizen of the United States of America, a taxpayer, and a voter. Who are you to ask?


Tuesday, February 22, 2005

Graham Says Bush Will Build Support for Social Security Plan

Bloomberg said Graham indicated he would present a plan within the next couple of weeks that provides the outline for a compromise with Democrats that would allow workers who earn under $30,000 to receive the same benefit increases they're entitled to under current law. Workers earning more than $30,000 would have their increases tied to inflation, which would reduce their overall benefits, he said. ``You're putting that benefit burden on people who can afford it the most.''

TalkingPointsMemo indicated the group consists of Baucus (D), Carper (D), Collins (R), Conrad (D), Feinstein (D), Graham (R), Grassley (R), Gregg (R), Lieberman (D), Lincoln (D), Ben Nelson (D), and Bill Nelson (D).


Social Security Myth #3: Social Security Generates "Returns"

This post from GOP Bloggers identifies the real problem with Social Security: Social Security provides absolutely no "return" at all for people who pay payroll taxes all their lives.

The word "return" implies that there is a linkage between what you put in and what you take out. What you receive in Social Security benefits has nothing to do with what you contribute. Congress dictates benefits, which, therefore, can change at any time. We are each at the mercy of politicians who can alter what the system pays out.

The allure of private accounts is that what you pay in is yours and directly impacts your nest egg upon retirement. Congress cannot touch it and you will not have to plan you retirement based on the whims of politicians to dole out monthly allowances at levels they can change whenever they want. The ultmiate question is this: whom do you trust to manage your retirement money, yourself or Congress?

Are the PRAs that government workers and Congress risky schemes?

If so, why does Congress not change it?

And if not, why would they be risky for everyone else?


Two Families, Two Views on Social Security

This article seems to clarify things without the extremes that many are saying about Bush's Social Security proposal.

As I said in a comment on that blog, Reality lies somewhere between the Greenans and the Swackhamers, and the solution also lies between the extremes. Right now the Democrats, who supported Clinton's claim that there was a crisis that needed to be fixed, now scream there is no crisis, because they want to delay things until they can get someone in the White House to push for a solution that only involves a tax increase (their solution to everything).

If Social Security is to be fixed the Republicans must draw enough Democrats over with the offer to raise the cap (which is a tax on the rich that would not hurt the middle and lower incomes), and at the same time direct 30% of SSI taxes to Private Accounts.


BatesLine: On death row

BatesLine said: The judge has denied all stays of execution, and it may be beyond the Governor's powers to grant clemency. Today at 1 p.m. Eastern time, the attorney of Terri Schiavo's estranged husband will order the removal of Terri's feeding tube and allow her to starve to death in a Clearwater, Florida, hospice.

As I posted in a comment on his site: I hope and pray that if I am ever in a situation like Terri Schiavo, and if I have a loved one that understands I would not want to be kept alive in such a situation and is willing to let me go, that we will not find special interest groups and bloggers uniting to try to push for legislation or government action to force me to be maintained in such a terrible state and prevent me from Going Home to be with Jesus.

One of the other bloggers referred to this site and said the Second District's opinion in the first appeal in this case explains: By mid 1996, the CAT scans of her brain showed a severely abnormal structure. At this point, much of her cerebral cortex is simply gone and has been replaced by cerebral spinal fluid. Medicine cannot cure this condition. Unless an act of God, a true miracle, were to recreate her brain, Theresa will always remain in an unconscious, reflexive state, totally dependent upon others to feed her and care for her most private needs. and in a later opinion in the same case, the Second District further explained:"Although the physicians are not in complete agreement concerning the extent of Mrs. Schiavo's brain damage, they all agree that the brain scans show extensive permanent damage to her brain. The only debate between the doctors is whether she has a small amount of isolated living tissue in her cerebral cortex or whether she has no living tissue in her cerebral cortex."

If I am ever in such a state, or anything like it, please don't force me to stay here, but allow me to Go Home to be with Jesus.


Monday, February 21, 2005

Baathist Surrender In Works?

As PowerLine indicated This could come to nothing but it could also be the best news from Iraq in a long time.

It is beginning to look as though the election was even more of a turning point than we realized at the time.