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January 31, 2005

Hands Off Social Security! v2.0

Below is a revamped version of the Q&A from the beginning of Hands Off Social Security! The whole thing is just about done, and will be available here soon. It will be flogged relentlessly.

In the meantime, I'd very much appreciate feedback on whether this is understandable. I want the book to be something that will make sense to anyone, even if they don't know anything about Social Security or economics to start with. If this part doesn't do that, I need to fix it now.

What is Social Security?

Social Security, founded in 1935, is a government-guaranteed retirement program. (At least, this is what people usually mean when they talk about Social Security. It also provides disability and life insurance.)

45 million of us, or more than one in every seven Americans, receive Social Security benefits. It's the most successful and most popular government program in U.S. history. In fact, it may be the most successful and popular government program in the history of the world.

How does Social Security work?

It's very simple: the government takes 12.4% of every worker's paycheck in what are called "payroll taxes." Then the Social Security Administration sends the money off to current retirees and other beneficiaries. The amount each retiree gets varies. The more you paid in during your working life, the more you get when you're retired.

Today, an average retiree—I'm going to call her Mary, after my grandmother—gets about $15,000 per year in benefits. Mary is guaranteed to get this $15,000 every year as long as she lives. Her savings might run out, the stock market might crash, and her old company might go bankrupt and stop paying her pension. But she will still get Social Security. Just as important, her benefits are protected against inflation. So if prices double, her benefits will automatically double to $30,000.

Once set, a retiree's benefit stays the same but is guaranteed no matter how long he or she lives. That's a lot of the "Security" part of "Social Security." It's almost impossible to get that guarantee, and protection against inflation, from anywhere except Social Security.

Hands Off Social Security! explains the nitty-gritty of how Social Security functions, but for now there are only two more things you need to know:

First, the promised benefit level for each new batch of retirees rises over time. Mary, our average retiree in 2005, receives about $15,000. However, Mary's granddaughter Marianne, who's an average person retiring in 2055, is promised $23,300—in 2005 dollars. This is even after inflation is taken into account; retirees get higher real benefits as time go on. (HOSS! explains why this is possible, and also fair.)

Second, if the Social Security Administration takes in more in taxes than is needed to pay current beneficiaries their promised benefits, the money is used to purchase U.S. treasury bonds. These bonds make up the Social Security Trust Fund. If the Social Security Administration takes in less in taxes than is promised to current beneficiaries, it cashes in some of its Trust Fund bonds to make up the difference. (See "What is the Social Security Trust Fund?", below.)

Is Social Security in crisis?

NO. There is no Social Security crisis. Under the main government projections, Social Security can with no changes whatsoever pay full benefits through 2042—and then continue forever to pay benefits higher than the $15,000 Mary gets today. Under other government projections, Social Security is fine through 2052. Under still others, Social Security is fine indefinitely.

Here's a graph showing this, based on the most recent Social Security Administration projections (full benefits through 2042) and Congressional Budget Office projections (full benefits through 2052). All numbers are in 2004 dollars; that is, higher benefits are higher in real value, not higher because of inflation.


Source: "Basic Facts on Social Security and Proposed Benefit Cuts/Privatization" by Dean Baker and David Rosnick.

(For more details, see the questions about Social Security projections below.)

But didn't President Bush just say Social Security is in crisis?

He did. In December, 2004 he said that "the crisis is now."

However... President Bush sometimes says things that aren't 100% true. Perhaps you remember him telling us about Iraq's terrifying weapons of mass destruction.

The Social Security crisis is just as real, and just as terrifying, as Iraq's WMD.

Then why is Bush saying there's a crisis?

Because he wants to dismantle Social Security.

Conservative Republicans have hated Social Security since before it began. In 1935, Republican Senator Daniel Hastings said Social Security would "end the progress" of America. Ever since, conservatives have been claiming Social Security is about to collapse. When people who are now receiving Social Security checks were starting to work in the 1960s, conservative Republicans were telling them they'd never see a dime. Bush himself, when he was running for Congress in 1978, said Social Security would "go broke" within ten years.

However, until now conservative politicians have never made any serious attempt to kill Social Security. That's because Social Security is extremely popular. And as much as conservatives dislike Social Security, they dislike losing elections even more. Social Security has often been called the "third rail" of American politics—touch it and you die.

But things have changed. Not Social Security itself; it's fine. But conservatives think that—after saying since 1935 that Social Security is about to collapse—they've finally gotten Americans to believe it. As a recent internal White House memo put it, "For the first time in six decades, the Social Security battle is one we can win."

The person who wrote this was being honest: conservatives have been fighting against Social Security for 60 years. It didn't have anything to do with a "crisis" in 1945, 1965, or 1985. And it doesn't now.

Now, you may be wondering: why exactly do conservatives hate Social Security? Why do they think something so many Americans like is so terrible?


President Bush's plans for Social Security would mean Americans would be required to hand billions and billions of dollars over to Wall Street. As Fortune magazine recently put it, Wall Street is "salivating" over this. Even the Cato Institute, a Washington think tank that has pushed for privatization for decades, says that "financial institutions in particular" would benefit.

Another answer is that conservatives believe getting rid of Social Security would make them more powerful. Their thinking about this is too complicated to go into here. It's interesting, though, and is discussed in Hands Off Social Security!

But... don't people on the news talk about Social Security being in crisis too? Didn't Bill Clinton say we had to "save Social Security first"?

You do see many people on television saying there's a Social Security crisis. But again—you also saw many people on television saying Iraq had weapons of mass destruction. Just because you're on TV doesn't mean you know what you're saying.

In fact, people on TV usually have less idea what they're saying than the rest of us. It's not that they're stupider than we are—it's that being on TV takes up lots of time. For instance, if you're Bill O'Reilly, you have to spend most of each day putting on makeup, coiffing your hair, sexually harassing employees, and so forth. (Well, allegedly sexually harassing employees.) This doesn't leave you much time to learn about Social Security.

Bill Clinton is a different story. Clinton did say, in his 1998 State of the Union address, that we should "save Social Security first."

This was a catchy slogan. But what he actually meant was something different, and less catchy: "Reduce the debt/GDP ratio first, thereby increasing the general solvency of the federal government and reducing the cost if we eventually have to rollover the Social Security Trust Fund debt in private markets."

Confused? That's okay. Hands Off Social Security! explains what Clinton was talking about. (For a little help now, see "What is the Social Security Trust Fund?", below.) But the point is that most of what Clinton said was reasonable at the time, but it didn't mean Social Security was facing a crisis.

Does this mean all the talk about the "Social Security shortfall" is just made up?

It depends on what you mean by "made up."

Every year, Social Security's Trustees are required by Congress to make projections of the program's health over the next seventy-five years. You could argue that this is dumb; no one can predict much that far into the future. No one in 1930 could predict spam email, Christina Aguilera, or spam email about Christina Aguilera. Likewise, we can't accurately predict what the world will be like in 2080. (Except for the killer robots.)

Nonetheless, that's the law. And every year, the Trustees present three different projections of Social Security's health: low cost (optimistic), high cost (pessimistic), and intermediate. When you read news stories about what the Social Security Trustees predict, the stories generally only refer to 2004's intermediate projection. That's the one that shows Social Security running short of money in 2042.

Now, Bush and others often speak of this date as though it's written in stone. But of course it's not; it's just a best guess. The 1996 intermediate projection showed a shortfall occurring in 2029. Because of better economic performance since then, it's continually moved further into the future. 2005's intermediate projection will likely show a shortfall occurring in 2043 or 2044.

Similarly, a recent prediction by the Congressional Budget Office (another part of the government) shows Social Security as fine through 2052. The Social Security low cost projection shows Social Security as fine forever. (Well, at least until the sun explodes. At that point Social Security will admittedly face real problems.)

Which of these projections is correct? No one knows. However, the 2004 intermediate projection—the one showing the shortfall in 2042—is strangely pessimistic. It predicts that over the next seventy-five years the US economy will grow at half the rate of the past seventy-five years.

Some people have begun to wonder whether the Social Security Trustees are pessimistic on purpose, in order to make Social Security's finances look bad. This is probably wrong. However, it is true that the Social Security Trustees (there are six of them) are appointed by the President. And while the Trustees receive professional recommendations from Social Security's non-political actuaries, there's no way to know whether they follow these recommendations. All their deliberations are sealed.

But what happens if the Social Security projections are exactly right?

First, remember that even if 2004's intermediate projection is right, Social Security will not be—as George Bush recently said—"broke" or "flat busted" in 2042.

Bush clearly is trying to confuse people about this, because he often refers to the Trust Fund as going bankrupt. But while it's true the Trust Fund could be out of money in 2042, Social Security is not the Trust Fund. Social Security itself will never be out of money. It will always have payroll taxes coming in to pay some benefits. The question is whether payroll taxes will be enough to pay promised benefits.

As mentioned before, promised benefits rise over time. Mary today receives about $15,000/year, while her granddaughter Marianne retiring in 2055 is promised about $23,300/year. As the graph above shows, payroll taxes are projected to be insufficient to pay the $23,300. But they will be enough to pay more than $15,000. Thus, even with no changes whatsoever to Social Security, under the intermediate projection an average retiree in 2042 would receive more than an average retiree today. This would only be 73% of promised benefits, but it's a lot more than nothing.

However, it's likely that we would decide not to cut benefits. Instead, we would probably raise taxes so that full, promised benefits could be paid.

Social Security's opponents often point to this as disastrous outcome. They say the higher taxes would place a crushing burden on future Americans. However, this is ridiculous.

That's because America will be a much richer country in the future—just as we're much richer now than we were forty or fifty years ago. Per capita GDP in 2005 is $39,450. Under the 2004 intermediate projections, in 2050 it will be $66,580.

Thus, even if we raised payroll taxes to pay full promised benefits to retirees, everyone working would still have a much higher after-tax income than everyone working today. This can be seen in the graph below.



And in fact, raising payroll taxes is exactly what's been done before to keep Social Security solvent. Workers in 1955 paid lower payroll taxes than workers today. But despite this, no one ever would choose to go back to the standard of living of 1955. No one ever says: Geez—I wish I had lower taxes, plus a tiny black and white TV, no VCR or cell phone, and a much smaller house.

What is the Social Security Trust Fund?

As mentioned above, most Social Security benefits are paid from payroll taxes. However, payroll taxes and promised benefits don't always match. When Social Security takes in more than it pays out, it uses the money to buy US savings bonds. When it pays out more than it takes in, it cashes in the bonds and uses the money for benefits.

Until recently, the Trust Fund wasn't that big. However, in the early 1980s it became clear Social Security would have to be changed to provide for the baby boomers when they started retiring in the 21st century. In 1983 Congress took the advice of Alan Greenspan (now head of the Federal Reserve and a conservative hero) and raised payroll taxes to their current rate. This was (and still is) far more than is needed to pay full Social Security benefits for current retirees.

For instance, in 2002 Social Security took in $516 billion in payroll taxes, while only paying $455 billion in benefits. As usual, this extra revenue was used to buy Treasury bonds. By now the Trust Fund holds bonds worth about $1.5 trillion.

Under the 2004 intermediate projections, payroll taxes will exceed benefits until 2018. Until that date, the Trust Fund will increase. From that point forward, the Trust Fund will be drawn down to pay promised benefits. There will be enough in the Trust Fund to do this until 2042, at which point it will be empty.

But isn't the Trust Fund just meaningless IOUs?

No. ABSOLUTELY NOT. Anyone who suggests the Trust Fund is "meaningless IOUs" is someone you cannot trust. Either they don't understand this issue, or they're trying to trick you.

This part of the Social Security picture is somewhat complicated. But hopefully this explanation will be clear:

The Trust Fund holds US Treasury bonds. They're the safest investment on earth. That is, among other reasons, why the Trust Fund holds them. In the entire history of the US, the government has never failed to pay off its bondholders. That's why Americans and people from all over the world buy them. Millions of people have bonds besides the Social Security Trust Fund. In fact, George Bush's financial disclosure forms show he personally holds lots of US bonds. No one is suggesting George Bush won't get paid back.

Now, it's true the money to pay off the Trust Funds bonds—like all other bonds—won't come from Mars. It will come from Americans. But the important issue is which Americans.

Payroll taxes fall most heavily on poorer Americans. It's a flat tax. And only your salary is taxed. (See "How does Social Security work?", above.)

By contrast, income taxes are paid mostly by richer Americans. Income taxes are progressive; that is, the more money you make, the higher a percentage of your income you pay. And your entire income is taxed. While the income of most Americans comes from working, richer Americans have lots of non-work income from stocks, bonds, real estate, etc.

Thus, the richest 1% of households in the US pay about 37% of all federal income taxes. The richest 5% pay about 59%. And the money to pay off the Trust Fund will mostly come from income taxes.

In essence, the plan in 1983 was a promise: younger, poorer workers would pay higher taxes during their working lives. In return, a chunk of their retirement would be paid for by richer people in the future. Not honoring the Trust Fund would break this promise.

Of course, breaking the promise would be good for some people. Economist Dean Baker, one of America's foremost experts on Social Security, estimates it would transfer $1 trillion from the poorer 95% of Americans to the richest 5%. Each household in the top 1% would receive about $730,000.

Thus, the Trust Fund is not meaningless IOUs. The only people who say it is do so because they don't like the fact that it is meaningful. They don't want to pay.

This is a neat trick. Everyone would like to borrow lots of money and then, when the time came to pay it back, start claiming you didn't have to. But only if you are very rich can you pay other people to go on TV and say this for you.

But hasn't the Trust Fund all been spent? Shouldn't it have been invested in something real?

Again, anyone who says this is confused.

Whenever you make any kind of investment—government bonds, corporate bonds, stock, or real estate—the money you pay for it is spent. For instance, if you buy a bond issued by General Electric, they take your money and spend it. Certainly the CEO of GE doesn't take your money home with him and stick it underneath his mattress. In fact, if GE weren't going to spend it, they wouldn't sell you the bond in the first place. Getting your money and spending it is the whole point.

But what you get in return for buying a General Electric bond is not a meaningless IOU. It's a claim on GE's revenue in the future. This is a real, smart investment: GE is a stable company that's consistently profitable. By buying their bond, you're investing in GE's future productive capability. You're betting that in the future, they'll make enough money to pay you back, with interest.

It's the same thing when you buy a US Treasury bond; the government takes your money and spends it. What you get in return is an even safer bet than a GE bond: a claim on the future productive capability of the entire economy of the US, the richest country on earth.

This is as real as investments get. Rather than investing in one American company like GE, you're essentially investing in all American companies. If GE goes bankrupt, GE bondholders may never get their money back. But US bondholders will, because there are many other American companies. However, it doesn't work the other way around. If things get so bad the US government can't pay you back, it's extremely unlikely GE will have money to pay its bondholders.

To understand this in terms of the Trust Fund, imagine that the Trust Fund was used to buy lots of stocks and corporate bonds. (I.e., what supporters of privatization call "real" investments.) When it came time to cash the Trust Fund in, the Trust Fund would sell these stocks and corporate bonds. The money the Trust Fund made from the sales would go to retirees.

Investing the Trust Fund in US Treasury bonds only changes the process slightly. The stocks and bonds the Trust Fund would have owned will still exist. However, they will be owned by individuals. When it comes time to cash in the Trust Fund, the individuals will be taxed. They will sell stocks and bonds to pay their taxes. The money the government gets from the taxes will go to pay off the Trust Fund's bonds. The money the Trust Fund makes from the bonds will go to retirees.

What does President Bush want to do to Social Security?

As of February 1, 2005, he hasn't formally proposed specifics. However, during his first term Bush appointed a commission, and has endorsed one of its proposals. His plan will clearly be quite close to this.

Each person working today pays 12.4% of their salary in payroll taxes for Social Security. (See "How does Social Security work?", above.) Under the plan Bush endorses, a big chunk of this would be diverted into a private account in each person's name. Probably Bush will eventually propose that this chunk be 4% of each worker's salary (about a third of their payroll taxes) or 6% (about half).

At the same time, promised benefits would be cut deeply over time. Someone born today would see their benefits cut almost in half.

Why is Bush's plan such a bad idea?

Eh. Where to start? It's such a bad idea in so many ways I'll only go into a few of them here. The rest will be found in Hands Off Social Security!

The most important thing to understand is that private accounts will not make up for the cuts in promised benefits. Everyone pushing privatization talks about the wonderful return people would get investing their private accounts in the stock market. Over the past 75 years, they'll tell you, the return on stocks averaged 7% per year. Whenever privatizers calculate returns under their plans, this is the number they use.

And it's true that was the return on stocks in the past. But remember that the Social Security Trustees project that over the next 75 years, the US economy will grow at half the rate of the past 75 years. That's why there's a shortfall in the first place. (See "Does this mean all the talk about the "Social Security shortfall" is just made up?", above.)

And if the US economy is growing at half the rate of the past, it's impossible for stocks to produce returns like in the past. It simply can't be done.

Now, hopefully the Social Security Trustees are wrong. Hopefully the economy will grow like it did in the past. Then there could be similar returns on stock investments. But then there would be no problem whatsoever with Social Security.

In other words, the privatizers want it both ways. They want to claim the economy will be terrible for decades. But their proposed "solution" assumes the economy will be doing great.

Their dishonesty is shocking, if you're the kind of person who gets shocked. No one knows for sure whether the Bush administration was lying about Iraq and WMD, or whether they're just completely incompetent. With Social Security, it's different: they're very consciously lying. As HOSS! explains, there's no question about this at all.

And it's not just that Bush's plan would be worse for Americans than what they're promised today, under the supposedly unsustainable current rules. Without the impossible stock returns, Bush's plan would be significantly worse than what will happen with no changes to Social Security whatsoever. In other worse, Bush says there's a crisis—yet his proposed solution does nothing but make things for retirees worse than that.

This can be seen in the below graph. It's taken from an analysis of Bush's plan by the Congressional Budget Office. "Current Law Expected" is what's projected if nothing is done to increase Social Security revenue over the next hundred years. (The big drop around 2054 is when the Trust Fund runs out.) "CSSS Plan 2 Expected" is what Bush wants to do. The line represents the total benefits retirees would receive under Bush's plan—not just their reduced Social Security benefits, but also the returns from their private accounts. The numbers on the left signify percent of GDP.

In dollar terms, it works out like this: Mary's granddaughter Marianne, an average person born in 1990, is promised $23,300 per year when she retires in 2055. According to the CBO, if the "crisis" hits and nothing whatsoever is done over the next fifty years, Marianne will receive only $18,100. Under Bush's plan, Marianne gets—from Social Security and her private account—$14,500.

And yet this makes Bush's plan look better than it is. After all, Marianne has exactly average luck in the stock market. Margaret, Madeline and Matilda—in fact, half of all retirees—will have worse luck in the stock market. They'll have even less money coming in.

Finally, there's a small but real chance Bush's plan would cause a gigantic financial meltdown during the near future. I'm not kidding. It's complicated, so I won't go into it here. But all the terrifying details can be found in HOSS!

There is a bright side, however. No matter what, under Bush's plan, his big contributors on Wall Street would make billions of dollars. That's worth any number of old ladies eating dog food.

Posted at January 31, 2005 06:47 PM | TrackBack

Another triumph! Thanks for putting it all together... really first-rate.

Posted by: Ryan at January 31, 2005 07:21 PM


Don't worry, the book itself will have some. But Clinton actually was mostly defensible on Social Security. At least in narrow terms.

By the way... I don't know if you noticed, but that post on Max Sawicky's site wasn't written by him, but by Dean Baker. He is the fount of all Social Security wisdom.

Posted by: Jonathan Schwarz at January 31, 2005 07:27 PM

That's exactly why I linked it. He's the most credible authority on it. I signed up for all the newsletters from his org a while back.

Posted by: Harry at January 31, 2005 08:08 PM

Very nice. I think the part that could use the most beefing-up and clarification is why conservatives want to do away with SS. You've effectively shown why there is no crisis; but you've suggested that the only reason someone would want to get rid of SS is because he or she is greedy. Is that really the only reason?

In other words, the "WMD Crisis" was invented for all kinds of reasons: profiteering, oil, GW's unresolved father issues, scapegoating our unspent 9/11 anger, etc.

But why the "SS Crisis" -- who, specifically, stands to benefit? What's in it for GWB? Rove? Conservatives everywhere? Is it just about rich folks wanting to get richer? (as if that weren't enough...)

Posted by: Peter at January 31, 2005 08:49 PM

Qui bono? The GOP now manifests the hubris of a party with unprecedented (in my lifetime) control over all three branches. Plus, they're not simply greedy, but also bat-shit crazy.
Personally, I'm hoping that SS really is the third rail, because I've got a bag of marshmallows and am waiting for the sparks to fly.

Posted by: mk at January 31, 2005 10:49 PM

Some inquiries from a skeptical blogger at my site:

Isn't there a requirement for employers to match funds in the payroll tax?

I'm against privitization, but I have never heard of a requirement for personal accounts in the Bush proposal. Can you dig that up for me?

Posted by: Ryan at January 31, 2005 11:15 PM

Guess I'll have to read the book! :)

Posted by: Peter at February 1, 2005 09:36 AM

"And conservatives HATE cooperation. They want all regular Americans to feel as though they're competing with each other."

I know it's a cheesy comparison to make, but this is exactly the policy that rich plantation owners in the antebellum south used to keep themselves secure. They made astonishingly effective use of institutionalized racism to set poor whites against poor blacks, who might otherwise have realized that overthrowing the plantation system would be really good for both of them.

I suspect that a lot of the conservative ideology boils down to "business, and only business, is what made America great". And therefore anything that is not done by business (e.g. Social Security) would be much better if done by business. And of course, there is just a ton of money in Social Security now. Who wouldn't want a cut of that? I know I do.

By the way, Jon, there is one glaring inaccuracy in your post. I happen to know that Mary's granddaughter's name is NOT Marianne. I've met her, you can't fool me.

Posted by: Ted at February 1, 2005 12:01 PM

I'm confused by your graph near the end. How come the deotted line for CSSS plan 2 is so close to the bottom of its 80% confidence interval? Is the relevant CBO report available online someplace?

Also, could you turn off the "require email address" feature please? I'm just going to give you a bogus one.

Posted by: Tim at February 1, 2005 01:29 PM

Great article, but a few points that could be clarified:

--The government does not take 12.4% of your paycheck in payroll taxes. They take 6.2% of your paycheck, and your employer contributes the other 6.2%. Of course, some argue that if your employer didn't pay their 6.2%, you'd get the money, but I'm not convinced. At any rate, the statement is a bit incorrect.

--You say, "So if prices double, her benefits will automatically double to $30,000." Not true, since SS benefits are indexed to wages, not prices (something I know you know since you allude to it in other sections, but never come right out and say it).

--You also may want to include a discussion about payroll taxes being collected only on the first $90,000-ish of your income (for OASDI... Medicare is collected on all wage and salary income). This makes payroll taxes extremely regressive compared to personal income tax. One of the Dems' options for "saving" social security is to raise the amount of wages subject to payroll taxes.

Finally, an interesting conspiracy-esque observation I read the other day: administration sources have claimed that part of the motivation behind the privitation scheme is to instantly create a nation of shareholders. They figure since shareholders tend to vote conservatively, this will ensure a lasting GOP majority. So beyond the money for Wall Street, perhaps the motivation behind Bush's "crisis" is purely political. Wouldn't surprise me.

Posted by: Jason at February 1, 2005 01:56 PM


You're of course right about the payroll taxes. And I'll have the precise information in the book. But I didn't want to jump into the details here. It may or may not be right that the whole tax falls on the employee, but it's generally accepted in discussions like this. I'm going to ignore it, since it's not really an argument that be settled.

Not true, since SS benefits are indexed to wages

Actually, no -- your initial benefit level, when you retire, is indexed to wages. But after that point it's just indexed to inflation.

Finally, I don't think that's conspiracy-esque at all. Lots of privatization advocates say that's exactly their motivation.

Of course, I think they're wrong about the outcome. I don't think privatization would turn lots of people into Republicans. It would be more likely to turn lots of people into communists.

Posted by: Jonathan Schwarz at February 1, 2005 02:12 PM

A suggestion for more footnotes, especially with regard to such sweeping statements like SS being the most successful and most popular government program in U.S. history [and] in the history of the world. Don't get me wrong. I'm under the same impression - but some - who shall remain nameless - might not take the word of a penguin.

Posted by: mk at February 1, 2005 02:17 PM

Jonathan - one question I've never seen answered:

Why don't rich people have to pay social security? I've heard it caps at a certain income level - $180,000 or something. Couldn't a lot of these problems be solved if there were payroll taxes on people earning more than that amount?

Posted by: saurabh at February 2, 2005 11:09 AM

Some late comments:
1) Generally, and often specifically, great! Thanks.
2) It canÃ¢â‚¬â„¢t simultaneously be a Ã¢â‚¬Ëœplaying to the choirÃ¢â‚¬â„¢ synopsis of cohesive talking points, and an argument that I can give to someone who I would like to convince Ã¢â‚¬â€œ but who I know would not get through the snark (as much as I enjoy it.) I would prefer to have the later since I am lazy and just want to send non-believers something they can easily get through.
3) Post WWII economy and stock market results havenÃ¢â‚¬â„¢t always moved in tandem, (though one could say that in 75 years the numbers may have averaged out-maybe that's why it is an average he realizes.) Growth was greater in the early decades while the stock market was comparatively stuck, while in the later years the stock market soared while real growth was not as great. Who knows what will happen when the market finally deflates those out of balance gains, showing how it can really tank on its search for mean.
4) Your point of Ã¢â‚¬Å“in fact, half of all retireesÃ¢â‚¬â€will have worse luck in the stock marketÃ¢â‚¬Â is not technically true, while the idea is correct. There is some balance in gains and losses. For example, one person can theoretically take all the gains while everyone else loses (Let it be me, the big winner!!!) My guess is that a few insiders will take most of what millions lose. That's anther reason why the Bushite cons like it. Regardless, the main idea - that there has to be a lot of Ã¢â‚¬Å“lostÃ¢â‚¬Â money - needs to be amplified, even a little bit.
5) I also found the second chart not as clear and helpful as the first.

Posted by: SiegeState at February 5, 2005 08:41 PM


More random feedback, for what it's worth:

about the "tone":

For the record I want to point out that I am against privitization or personal accounts or whatever you want to label the idea.

As to matching funds, I would dispute your arguement that money paid by the employer, the employer's share, comes out of the employee's pocket. This same arguement is made by military members about such things as Basic Allowance for Housing and Commuted Rations. These are entitlements which would only be paid if the circumstances require, you don't just rate them because you are in the military. There would be no requirement for employers to pay this money in wages if it were not required.

As far as a crisis, if there is none (and I mean in the forseable future) then why have I even heard alternatives to "fixing" the system (raising the cap, age, or payroll tax) at all?

My problem with the tone is the assumption that a) Republicans are trying to do away with SS, and 2) the assumption that people would be required to use the personal accounts. If I had been able to use the Thrift Savings Plan, I would not have; my philosophy is not to take chances with money that I would miss if I lost it. I for one will not be playing around with the "retirement insurance" I rate in SS.

When presenting useful information it is unwise to assume things about groups of people unless you are only after a target audience. Here's my perspective on the whole Republicans vs. Democrats thing: Take two children at the local park that you know a little bit about. These children have been in a perdicament and you have to determine which child is tellinjg the truth. You know child A (we'll call him Reppy) has always shown kindness to others when you saw him, but you know little else about him. Child B (Lefty's the name) you also know little about, but when you do see him, all you see is whining, name-calling, temper-tamtrums, etc. Who is the discerning adult supposed to believe? Lefty may be right, but he isn't very beleivable.

and from a Friendster thread on Social Security:

Reading the link Ryan offered that was supposed to explain why the Trust funds are real and not phoney offered this insight...


a little further down the article adds this...



So this is what those who say they want to Save Social Security are left to argue.. That the Trust Funds are not meaningless IOU's.. but Oh Yeah.. we'll have to fund the Trust Funds from income taxes.

If you follow their "logic" then none of us should save for our own retirement. Instead of calling it a Trust Fund.. let's call it what it is "accrued taxes due" and thus, the larger it is, the more pain our children will face in America's future economy.


I suppose it's possible that some people will never get it.

Posted by: Ryan at February 7, 2005 09:31 AM