Update II (1/6): Must-read post on slave reparations and taxes by Casey Lartigue.
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“Would liberals support Social Security reform if they thought of it as reparations for blacks?”
Rich Lowry, editor of National Review, asks a question I’d never thought of asking white liberals. Yet it seems so obvious. Liberals support “reparations” and any other idiotic idea complaining blacks come up with. I’ve always argued that blacks are receiving reparations: welfare, entitlements and all manner of skin color preferences.
As we all know, if the old baby boomers aren’t breaking us now, they will be very soon. President Bush is trying to help us out. Under his plan, we’d get to invest part of our wages instead of throwing it down the black hole that is the government. In fact, it is a conservative trait to advocate that people keep more of their earnings. It’s a liberal trait to advocate that government not only take more of your money but force you to give it to people who have less, whether they have a job or not.
Lowry offers a rationale for social security reform that I’ve heard before: blacks, especially black men, don’t live long enough to collect the money that is owed them by the government, so they, of all people, should support reform of the broken system:
There is a direct correlation between economic status and average life span. This means that blacks, who are disproportionately poor, partly for historic reasons, tend to have shorter life spans, especially black males. The average life expectancy of a black male is roughly 68.6. The retirement age of Social Security is set under current law to eventually rise to 67. You do the math — this cannot be a good deal.According to Social Security expert David John of the Heritage Foundation, one-fifth of white males die between the ages of 50 and 70. But one-third of black males die between those ages. If you die before you reach the age of 62, you have no chance of collecting benefits, and if you die shortly thereafter, you will not recoup the payroll taxes you paid into the system.
John ran the numbers for persons roughly age 20 to 25 living in the ZIP code for liberal New York Rep. Charlie Rangel’s district office. The average rate of return from Social Security for these young people will be negative 8 percent. If young blacks were being fleeced in this way by, say, “predatory lenders,” the likes of Rangel would scream racism and demand change. But if they are financially abused by a liberal sacred cow, the implicit message is: Don’t get uppity.
How white liberals have convinced most blacks that social security reform is “racist” and will hurt old people isn’t physics. I’ll keep it simple. As someone who used to be a liberal, it didn’t matter if a conservative was offering something better for me and my family. As long as I believed the person doing the offering was a racist, I didn’t want it and tried to convince others not to take it, either. Irrational? Darn right it is.
When I find the time, I’ll read up on the history of social security (Thanks a lot, FDR), it’s evolution and what reform would mean for me. I’m talking policy. Right now, I’m kind of ignorant. All I know is that I’d keep more of my salary. That’s good enough for me.
I want the power to use my own initiative, motivation and creativity in choosing how, when and where to invest the money I earn. But we live in an era where the government knows what’s best for us, right?
Attention Washington: Keep the criminals out of my neighborhood and away from me and family, protect us from terrorists and illegal aliens bankrupting the system, and I’ll be just fine. Jack part of my salary for various state duties, if you must, but let me and my brain come up with our retirement plan.
Get off my back and out of my pocket.
Update: A reader sends links. From the Heritage Foundation:
(FYI, the link text on the new blog will be the same size as the regular text.)
Update: Rob says: “Social Security Doesn’t Work.”
Chris says: “Personal Accounts Work.”
Have you written a post on social security reform? Send me the link.
Update III (1/10): Here’s something besides Williams or Rathergate. See JustOneMinute for the latest on social security reform.
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It takes a lot of guts to say that. I do not have that much guts. He will be beat about the head and shoulders ,for among other things racism ,for years to come.
Rod Stanton
You’re right, but the man is telling the truth, and the truth divides.
‘blacks, especially black men, don’t live long enough to collect the money that is owed them by the government, so they, of all people, should support reform of the broken system:’
Interestingly, this is a good reason for them NOT to support Bush’s reform.
Bush is very silent on details. Bush’s reform, right now, looks like it does two things — it appears like it may try to ignore or erase the debt the general fund (GF) owes the social security trust fund, and it may cut future benefits, partly to finance that debt and the transition costs.
The problem is that the taxes that fund the SS fund are more regressive than the ones that fund the GF, so any transfers from SS to the GF are effective tax regressive. So people in lower income brackets would do well to be against these plans to shift tax burdens on them. Especially so for people who are getting less benefits now — because these people are paying just as much as the rest, and getting less benefits, and now would have felt the regressive impact of the bush plan even more.
The key for me is that less payroll taxes will be jacked from my check, and I’ll have the option of investing a percentage. How the government can keep taking our cash and blowing it in the wind so that we’ll have to worry about retirement AND continue to get away with it all these years, is a mystery to me. Thankfully, Bush is trying to accomplish meaningful, not perfect, reform, and he has my support.
I’ll sort of miss you, actus. I hope you’ll keep reading the new comment-free blog and e-mail WHEN you object to anything I post.
La Shawn, have you seen FrankJ’s plan for SS reform?
LawWife - Yes, and it’s funny. He’s too much.
WOW! Perfect slogan for conservative Americans–Get off my back and stay out of my pocket! Thats the definition of true liberty and I support it 100%.
Our forefathers worded it a tad differently: Don’t tread on me. Either way, it reflects the same individualist, self-reliant attitude that has defined the American psyche from the beginning, until the 60’s and the advent of liberal lunacy.
I’m going strait to FrankJ’s site now. Can’t wait!
PS: I’m going to miss Actup too!
‘The key for me is that less payroll taxes will be jacked from my check, and I’ll have the option of investing a percentage.’
This reform is well timed to be pitched to the ‘me generation’. forget taking care of the aged and infirm, its all about you and wall street.
Because no one should take charge of their own lives and rightfully earned money? Wow. Personal responsibility really does escape you, doesn’t it? Since you’re feeling so benevolent with my money, may I come and take yours to give to others of my choosing? Of course, I will probably need some of it for “administrative” purposes, but you won’t mind. You like to give!!!
Actus,
What you seem to forget is that the plan put forth does not take anything away from the older generation as far as getting the normal social security benefits that they would already be scheduled to get. It will only affect younger workers.
You know, the social security system would not be in trouble now if its funds hadn’t been systematically raided through the years by the Government. Of course that’s all water under the bridge now. We have to do something to fix the system before it’s too late to be effective.
LB: “Keep the criminals out of my neighborhood and away from me and family, protect us from terrorists and illegal aliens bankrupting the system, and I’ll be just fine. Jack part of my salary for various state duties, if you must, but let me and my brain come up with our retirement plan.”
Spoken like a true conservative, libertarian philospher. The concept that government is designed to make our land safe, and we are designed to provide for our families is an arcane if not romantic concept. I think you’ll find those that adhere to it as a political ideology group dwindling daily, especially in the Republican party.
I’ve yet to see this administration discuss anything that limits the government’s involvement in your life. Sure, President Bush proposes an ownership approach to life in America. But, technically, he’s never proposed anything remotely resembling an increase in economic freedom.
Limited taxes, fewer government encumbrances, and the like are noble causes. Keep preaching, keep up the pressure, and continue to encourage the values of economic freedom (avoidance of economic slavery) in your own party. It’s good to have a few legitimate conservatives to balance out the party’s platform.
‘What you seem to forget is that the plan put forth does not take anything away from the older generation as far as getting the normal social security benefits that they would already be scheduled to get.’
Here’s a graph on the current proposed cuts: http://www.patridiots.com/001366.html The deepest cuts go against the unborn.
‘Because no one should take charge of their own lives and rightfully earned money? Wow. Personal responsibility really does escape you, doesn’t it?’
It certainly doesn’t. I know I’m responsible to take care of the aged and infirm. I know I’m responsible to educate todays kids. I know I’m responsible for buying car insurance, just as I am for buying retirement insurance — which is what SS is.
People are all free and good to do what they want. Its exactly that that got us social security to begin with.
Here’s a hint: SS is not in trouble. Minor changes in benefits and incomes can fix it. So can immigration, and so can general fund fiscal sanity.
I’m the descendent of people who received reparations: my grandparents. My mom and her family were living in Germany, minding their own business, when the Nazis came to their house, and took all their posessions from them. In addition, they had to transfer their real estate to the Nazis, and the Nazis replaced their ownership by declaring the buildings “abandoned.” Then they were allowed to take less than $75 for the entire family, and told to leave or die in a camp. So my mom’s family lost everything: money, posessions, home.
Several years later, part of West Germany’s repentence was to repay Jews a fraction of what they lost. They also invited Jews to visit their hometowns to let them know that they were sorry. Even though my grandmother got some money and visited Germany, she was really sad because her mother died in a camp.
So when I hear all this talk about American reparations, I can’t help but wonder “what the heck are they talking about?” Nothing was directly taken from them, and if it was, that was generations ago. And there’s so much mixture, to what degree is someone black?
La Shawn,
I’ve never seen payroll taxes as being particularly evil, in my opinion.
You note FDR in your post, shaming him for creating social security. The way I see it is that social security is a form of insurance into which one pays to guarantee comfortable golden years. Heck, my grandmother is gung-ho conservative, but if anyone screwed with her social security she’d be hot (”FDR was the last good democrat,” she always said).
Now, on to another point. Bush has been hammering this personal accounts business. I’ll admit…I don’t know why liberals are so against it. Everything I’ve read has led me to believe that no more than $1300.00 in payroll taxes can be set aside into a personal account in any given year. Sure, it’s a gamble…but, nothing ventured nothing gained.
Here’s my problem. We live in a country rife with corporate scandal. The Bush administration continues beating the drum of deregulation, which essentially means the foxes can guard the proverbial hen houses. Without proper corporate accountability (which has been virtually ignored since Enron)
Like the poor people at Enron, what will a 65 year old pending-retiree do when the company in which he invested his money has gone under and his entire account savings is wiped out? Sure…working 30 years he may have only invested $40,000…but that could have tripled in those 30 years.
So…when this man loses his money he was hoping would lead him to a comfortable few later years he will require assistance in the form of government subsidies, Medicaid and welfare. Do we say “screw you” to these elderly folks who lose money from their personal savings accounts…like I’m sure many conservatives would prefer???
Bush’s plan is indeed a gamble. It’s theoretically wrong to not let people do with their money what they choose. But, it’s not very practical when we live in a democracy that seeks to serve all individuals.
In theory Bush’s plan seems great. However, in practice it may turn out to prove disastrous. The question is: are we willing to take the risk?
Of course these are all hypotheticals. All the more reason not to hastily rush along a bill that could provide damaging repurcussions down the road.
I forgot to finish one of my thoughts. I suppose that’s what I get for poor editing!
“Without proper corporate accountability (which has been virtually ignored since Enron), companies can do with the money whatever the heck they want behind closed doors.”
La Shawn,
Excellent post. Yes, social security (as a retirement plan) is a terrible deal for black folks. It’s also a terrible deal for white folks. I’ve got a long post on my blog about this:
http://roborant.info/roller/page/rob/20041231#h3_social_security_s_future
Social security is fundamentally unfair in so many different ways that it’s hard to see why anyone ever thought it was a good idea.
La Shawn,
Great post. Social security is fundamentally unfair in many ways. I have a long post on it over at my blog too (click link, hint, hint).
Mike M, you can’t be thinking straight. If private investment is such a bad idea, why does everyone who can afford it pump money into IRA’s and 401k’s?
If you’re approaching retirement, you move your money into less volatile instruments (as any investment councilor will tell you). Anyone (even a young person) who piles all their money into one company is a lunatic. You spread it around and, the older you get, the more conservatively you bet - this is Investing 101, man.
Also, what guarantee do we have the the government social security program will be there when the time comes? It’s just a government program. They can change benefits, raise the retirement age, all sorts of things. What kind of “security” is that?
The current social security program was a terrible idea from the very start. It was a short-sighted way to calm the public down and get some people re-elected, nothing more.
‘Now, on to another point. Bush has been hammering this personal accounts business. I’ll admit…I don’t know why liberals are so against it’
mostly because there’s no money for it.
‘If private investment is such a bad idea, why does everyone who can afford it pump money into IRA’s and 401k’s?’
If private investment is such a good idea, why not have the goverment sell debt and buy 401K?
welfare, entitlements and all manner of skin color preferences
welfare: not confined to Blacks so saying it’s a form of reparations is illogical.
entitilement: fha loans did more to entitle white people and further build their nest eggs than whites.
social security reform: i don’t hear Blacks saying it’s racist. that seems like a straw man to me.
a max of $1500 is nothing. it’s just the gov’t mandating an ira. whoppee. chances are, the “lower economic” people will not go for the max, and the “upper economic” people will dismiss it as too little.
give me 50% of what i’ve already put in. let me invest 6.2% how ever i want. the other 6.2% goes to sustain current retirees.
lastly, people seem to be willingly ignoring the survior benefits of social security and the disability benefits of social security.
Is he made of straw? Black liberals think white Republicans are racist and whatever they support is tainted with racism. Is it such a leap to conclude that black libs who think Bush is racist also considers social security reform racist in that it will take money away from retired blacks who would presumably fall below the poverty line, etc? I think not.
I doubt a black liberal would say, “Social security reform is racist,” unless they’re not worried about looking and sounding like a lunatic.
‘All I know is that I’d keep more of my salary.’
No you wouldn’t.
Excellent post and another example of liberals flawed arguments. I posted a 3am revelation I had about the connection between privatization and abortion that I had here
http://commonsenserunswild.typepad.com/common_sense_runs_wild/2005/01/another_prochoi.html
Keep up the great work.
what you said about welfare affirmative action etc as reparations sounds like a line from the movie barbershop
Black liberals think white Republicans are racist and whatever they support is tainted with racism.
And many white conservatives think most Blacks aren’t capable of reaching a logical conclusion without first hearing what “Black leaders” have to say.
Both statements are rhetorical excess.
Is it such a leap to conclude that black libs who think Bush is racist also considers social security reform racist
Yes. It’s a leap of Grand Canyon proportions.
So far, “Black libs” who have come out against the plan, have done so on the basis of “safety of the investment” and nothing more.
The argument that Black men are short changed by current social security is strong. The added rhetoric does nothing but, maybe, kick up resentment.
The racism in this article is overwhelming. It’s sad when a gene-pool shrinks so far that it’s inbred members become this incoherent.
Being anonymous and cowardly is even sadder. - Admin (Who’s very glad she won’t have suffer fools like you too much longer.
Okay please LaShawn let me add this comment. It is in the vein of the thread but speaks to the most vocal of liberal groups. Gays. Liberals want us to believe that social security reforms are unnecessary and will do more harm than good. Taking current laws into consideration, it would seem gays, as a group, would break from the liberal lemmings. Why? Because gay unions cannot participate in survivor death benefits of social security earnings. Only people legally and lawfully married enjoy this benefit. If a gay person funds a privately managed retirement fund, they can name a beneficiary even their life partner. So why stand with the left on this one? It is beyond me.
‘Because gay unions cannot participate in survivor death benefits of social security earnings. Only people legally and lawfully married enjoy this benefit.’
Maybe they want a different part of the program changed.
A couple of things: One, just out of curiosity, I ran the numbers using a low-wage, low return model — $7 per hour starting salary, every other year a $1 per hour raise, taking Bush’s 2% and depositing that $5.60 in an FDIC insured locked savings account at 3% compounded interest; the 9th year on, I switched to 3% or 5% COLA raises about every other year, and when the bank balance reached just over $7500 (end of 15th year), I “moved” it to CDs at 5% interest.
Now, if a guy on SS, after 45 years work and retirement age, should drop dead, his wife or heirs would receive $255 (same now as the amount in 1975; it’ll probably go up by $25 or $50 in the next 45 years). The guy with 2% drawing a very low but completely safe return will leave $87,194.64 to his heirs instead of to Uncle Sam. Should he remain alive, he could purchase an annuity, or create his own, to supplement the SS check, which would be about 67% of the amount had he not deflected his 2%. Obviously, if he puts that 2% into something similar to state, county and municipal retirement funds, he’d probably get 2-1/2 or 3 times the amount as his SS portion from the other 4.2% he paid in all those years.
Example: I had 8 years in the Illinois Municipal Retirement Fund at 4-1/2% contributions, still had to pay my 6.2% to SS (plus 1.55% Medicare); my 8 years of IMRF would’ve been a slightly lower amount than my 45 years paying into SS (except that I took early retirement and an option of accelerated IMRF payments, which lowers the remaining monthly checks). However, the IMRF also gave me a nice cash ’spousal benefit’ and other fringes like paid up life insurance.
Second: Social Security started as part of the New Deal initiatives, like Work Projects (WPA) and expansion of the 1930 Food Stamp Plan, to meet the exigencies of that era — world wide depression and severe US drought. Some 10,000 banks failed, and most of the nation’s elderly were thrown into abject dependency.
The SS Act of 1935 provided for general welfare and created a social insurance program for income assistance to retired workers.
However, Amendments in 1972 added “Supplemental Security Income” (SSI) for physically or mentally impaired recipients. SSI benefits cover many who have paid little or nothing into the system, including some whose ‘mental impairment’ of drug or alcohol addiction makes them unemployable. The first monthly checks for SSI recipients, January 1, 1974, added $285 Million in red ink to the ledgers in the (heh, heh) Social Security “lock box.” That’s just one month.
Currently, funding for present and future SS recipients is just part of the 7 Trillion, 527 Billion, 973 Million, 971 Thousand, 610 Dollars and 37 cents (12/24/04) National Debt.
It’s a good idea to keep in mind that, if semi or full privatization of retirement accounts becomes law, the funds or brokerages handling the nitty gritty will be regulated and insured, under government and legal-system mandates, but legislators can’t get their mitts on the money. When it is the gov’t itself administering the program, there is no oversight or recourse, and recipients are at the mercy of Congressional whim on setting retirement age, amount of income, etc.
Remember, this is the same type of bureaucratic rigidity evidenced in government airport screeners, who carefully inspect Granny’s walking shoes but insist ‘no profiling’ rules prohibit asking a 27 year old male with Arabic accent to remove his ski-mask and turn in his Kalashnokov before boarding the airplane.
Do you REALLY want to trust them to plan your old age financial security?
The point about blacks statistically dying younger is well taken and shows how inherently discriminatory these polices are, but consider also those of any race who KNOW they will die young. Say, for instance a man with cystic fibrosis who may work for some time quite productively, but has no chance of making it to the ever-increasing retirement age. Any money taken from his paycheck on the promise of future benefits is pure theft, and nothing else. He will never see it, and if he is not married, no one else he cares about will, either. From my perspective, this is the best argument for individual ownership of our retirement/social security funds.
And as to reparations…I am white. Lily white. So white that when my family goes to the shore, I visit the beach early in the morning and late at night and no time in between, because if I do, I’ll be sick for days. White. Really, really, white. The last member of my family to be in servitude was my great grandmother, released from slavery in 1907 because her future husband bought her. He BOUGHT her. He bought her after every African American had been freed from slavery for over forty years. A great great grandfather of mine was injured as he was on a ship on his way to fight for the North in the Civil War. He returned home and suffered with incredible pain from a spinal cord injury for several years before he finally succumbed to his injuries. His widow’s request for pension was denied. I have been researching my family’s history for years and I have yet to find one ancestor of mine who owned a slave or in any way benefited from slavery. Only one of my four grandparents was born in America, and that one line descends from Pilgrims and New England and New York farmers. Now tell me, please, why it is I am so guilty that I must make restitution to others for American slavery!
‘However, Amendments in 1972 added “Supplemental Security Income” (SSI) for physically or mentally impaired recipients’
How does bush’s reform address this?
You are off the chain!! How come this has to be a black and white issue and not an American issue? Let’s suppose the average black men dies at “roughly” 68.6 then what? He’s DEAD!!! I am sure he wouldn’t turn over in his grave because he only got to spend a year worth of social security. I would be worry more about how God will judge. Besides with the high rate of un/under employment among black males how much are they really contributing to the “system”. Question what’s the average life span of a Black Female? Under Bush “plan” What would be the average age to draw your money? Maybe social security does need re-vamping in the next 10 to 20 yrs but it’s obvious that if your money goes into the stock market it can up or down “Yeah, I know historically the market has always been good to those who kept their money in there for the long haul, according to Lowry black males only have a couple yrs to live pass retirement.
Social Security is a Ponzi scheme with great marketing…. nothing more, nothing less.
To those who say there’s too much risk in investing for one’s own “golden years” by themself- the overwhelming odds are SS will provide a 0.00% return on my working life-long investment, so I’ll take my chances. I’m quite certain that I am far more able to provide for me and mine in retirement years better than some clown car full of bloated dopes in DC.
For those that maintain that SS is part of some “social contract” woven into the very fabric of our civlization- nonsense. Read paragraph 1 re: marketing efforts. In a perfect world (one in which 14-15% of my wages weren’t sucked into the black hole of the G), I’d expect noone to pay for my retirement and expect to pay for noone else’s- something about the capitalist ideal that our country’s economy is predicated upon comes to mind here, yeah?
I do not trust the parliament of thieves, charlatans and whores (current or future classes) in charge of my “social security” investment any further than I can throw Teddy “Land whale” Kennedy. The sooner I start keeping my money from this troop of vultures the better.
Actus,
Below are your quotes and a critique of your quotes. If this is the best set of accusations, lies and mischaracterizations you can come up with they are easily shown as such:
“”Bush’s reform, right now, looks like it does two things – it appears like it may try to ignore or erase the debt the general fund (GF) owes the social security trust fund, and it may cut future benefits, partly to finance that debt and the transition costs.”" Critique of your comment: Your use of the word “looks” is key. Your perception is incorrect. What the general fund owes the social security trust fund will always be HONORED but changes are being made so that any new contributions made by contributors can be given to each individuals own NEST EGG. A NEST EGG that can be passed on by black men to beneficiaries. Currently this is not the case and black men are not receiving as much as they’ve paid into the system. Also any so-called cuts in benefits to retirees is not an actual cut in nominal dollars and would be less than what would have to be done in the future to keep the system solvent.
“”forget taking care of the aged and infirm, its all about you and wall street.”"Critique of your comment: This is a typical liberal method of slinging mud and accusation. NOBODY is talking about not taking care of the elderly or not honoring the elderly with what they’ve paid into the system. And… it isn’t our intent or thoughts either.
“”mostly because there’s no money for it.”"Critique of your comment: The fact that there is no money to fix the roof doesn’t mean the roof shouldn’t be fixed. Further damage to the rest of the house and foundation can and will be avoided. We plan on fighting for what is right. What is your objection to fixing something that needs fixed?
“”If private investment is such a good idea, why not have the goverment sell debt and buy 401K? “”Critique of your comment: You can’t sell something you don’t own. If instead you meant buy loans to get money to invest that would mean that 401K’s would have to OUTPERFORM the interest rate on the loans. That would be like taking a loan of 10,000 at the rate of 6% and then hoping that your 401K outperforms that 6%. Why that risk to prove that private investment is good Actus? Why do you setup that standard of proof that private investment is good. Why not just look at the facts that private investment on average outperforms what people receive as benefits from their contributions into Social Security. This is fact. No need to prove it with a risky proposition.
“”How does bush’s reform address this?”"Critique of your comment: Your question was related to SSI benefits paid to the disabled. Guess what. Bush’s proposal that I’ve read does nothing to alter this part of the program. HOWEVER, I am almost 100% positive that you’ll find someone’s accusation/mischaracterization/lie/untruth/assertion and state it as fact that Bush doesn’t care about the disabled and is proposing to reduce/cut/slash benefits to the disabled.
As for me…. I’ll be here talking to counter the misinformation so that people who are just becoming interested in politics don’t believe you.
I remember when I just started becoming interested in politics in 1991. I was a liberal. That same year I had a core belief change and became a conservative/libertarian. Now I’m a centrist/conservative (conservatism is centrism - and while I’d love to see government cut by 80% as libertarians believe, I’m a realist and understand the harm that would do to this countries economy). That core belief change happened because I went to the library in 1991 3 times a week for a full year because I was challenged by my core beliefs by talk radio. I found out how economically illiterate ABC, CBS, NBC, CNN and the New York Times and Washington Post was. I found out how on every issue (environment, race, sex, education) the dominant press was misinforming or misinformed themselves and wasn’t willing to tell a set of facts that would challenge what information they were disseminating.
I see how easy it is for young people who are just getting interested in politics to fall prey to the doom and gloom politics and believe the set of accusations/assertions/lies about conservatives that liberals spout on a daily basis. It makes me interested in countering the misinformation because I was on the other side of that fence long ago.
Because there is counter information to what liberals put out there has been a large shift in voting patterns over the last 15 years. It used to be that Democrats had a majority of state governorships, legislatures and was a majority in Congress for most of 54 years from 1940-1994 (with a 2 year gap exception). During those 54 years a Democrat president was in the White House plenty of times and all of the United States problems existed (as stated by liberals) and didn’t get fixed or were exacerbated. Since 1994, governorships, state legislatures and Congress and now the White House is majority Republican. This has NOT brought about cuts in spending, not brought about extreme movements in policy and not brought about doom and gloom. This has brought forward left of center government (why aren’t liberals happy about that) that even though it is still left of center is more inclined to try to tackle systemic problems with the government.
I listened to Arnold’s speech last night and as a conservative living in CA I was cheering. Sytemic problems with CA government is being tackled. Arnold clearly spoke about how CA government revenue grew by 5 billion but spending was to increase by 10 billion. You can’t have spending increases double revenue increases and solve a states financial mess. You have to fix the systemic problems that would cause that.
Social security is setup with a sytemic problem. There is currently 5 Trillion dollars in obligations by the general fund to pay back Social Security once surplus’s stop and contributions do not match benefits paid out (defecit). When they day comes is debatable. If it will happen is not debatable. Look at population percentages and you will see less contributors and more beneficiaries when the baby boom generation starts retiring.
Also as La Shawn points out…. Black americans are not receiving their fair share of contributions because of the lower average age at death. There has to be a way of informing black americans that the Democratic message isn’t helpful. The Democrat’s ability to keep black american’s as 90% voters is soon to be broken.
That is probably why we see you have posted more than anyone else here. You fear that day.
GKP,
Nest egg’s that can be passed on to beneficiaries would ensure that black american’s contributions are recovered in some way. That is the answer to your second question.
Yes. It is an American issue about how when we make contributions to a system and it doesn’t get put into an account as a nest egg that it is inherently setup wrong. That is the system that has created the worry about baby boomers drawing more than what is being contributed because of the percentages of population that is baby boomers.
Fix the system, Yes.
Bush’s plan is a modest step in the right direction because it only addresses 6% of contributions going to a nest egg.
Beware the “Social Security is not in danger” rhetoric. That is a political statement — liberals have actively been encouraging that argument not because they believe it is true, but because they don’t want Bush’s plan to work.
I have my own doubts about Bush’s plan. I’ve had to deal with senile grandparents who I don’t believe would be able to manage their money.
But good things are being proposed too. Social Security isn’t paid on income over 88,000 — the Republicans are looking to change this. (And I say that coming from a position where I’ll be effected by this, but fair is fair, and I don’t mind.)
Interestinly, I’ve read articles written by liberal commentators who wished there was some way that everyone in the U.S. could be vested in the stock market…and now Bush is proposing just that!
La Shawn, two comments:
1. “Liberals support “reparations” and any other idiotic idea complaining blacks come up with.”
this is a dramatic generalization, and an incorrect one at that. i am a liberal, and i do not support reparations nor idiotic ideas. i know lots of other liberals like myself.
that said,
2. “I’ve always argued that blacks are receiving reparations: welfare, entitlements and all manner of skin color preferences.”
to equate welfare with reparations is both short-sighted and insulting. if by ‘entitlements’ you’re referring to affirmative action, here’s my take on it: the goal behind AA was to help qualified minorities get a foothold in a system hell-bent on keeping them out. notwithstanding its faults, i think it did the job. condi rice has discussed how she benefitted from AA, and regardless of how i feel about her policy, i think she is a capable administrator who has every right to be where she is.
enjoy your blog–
Thank you, Baklava, that is the same answer (re SSI) I’d have given to Actus’ question; I don’t believe SSI has been mentioned in the Bush proposals.
One thing about the 1972 amendment(s), however, that was all part of a comprehensive “Welfare and Social Security” package (Public Law 92-603). While the original SS provision for income assistance to retired workers may have been approached as a “social insurance” measure, the emphasis changed to more of a “welfare” measure.
Even as some pundits are now urging the cap be removed from income amounts subject to SS taxes, it is frequently the same pundits talking about “means testing” for recipients. Redistribution of wealth, pure and simple.
Legislators’ wealth is, of course, excluded — their own retirement pensions are safely outside of (their colleagues) Congressional tinkering range.
Yes.
And I as a self-employed business owner see the entire 15% contribution draining from my accounts as opposed to normal employees who only see the 7.5% contribution being withheld from their paychecks.
Will I ever see that 6% of contributions go to a nest egg that can be passed on to my 2 daughters?
Will this country be able to flow 5 trillion back to Social Security recipients as they are due? The obligation’s 5 trillion is supposed to grow to a total of 10 trillion before the problem shows itself.
Do those who have thier head in the sand saying there is no problem concede that there is a deficit once the large population of baby boomers start to retire? (Contributions would be less than benefits paid out). I haven’t seen those concessions.
Baklava — that was a good fisking of Actup — saved me about an Euro’s worth of dialup connectivity here in Berlin
In a way, I’m going to miss Actup’s bloviating.
Yes. And I’ll miss being able to comment to set the record straight of people’s careless sets of accusations and assertions….
I’d love to be able to post as a guest commenter but La Shawn is a much better writer and alas I don’t see myself being so fortunate as I am not deserving.
Besides. I’m not a consistent contributor. I’ll read 50 blogs a day but heaven forbid I carve out 15 minutes to say something on any of those blogs. (There are days where I’ve spent an hour writing)
‘This is a typical liberal method of slinging mud and accusation. NOBODY is talking about not taking care of the elderly or not honoring the elderly with what they’ve paid into the system. And… it isn’t our intent or thoughts either.’
SS is not about honoring people what they paid in. Its about honoring their dignity in retirement.
“”mostly because there’s no money for it.””Critique of your comment: The fact that there is no money to fix the roof doesn’t mean the roof shouldn’t be fixed.
Personal retirement accounts don’t ‘fix’ social security. They’re a different, un-insured way of providing for retirements, but they don’t change the cost. They do, however, take away from the current system. If the problem with the system is lack of funding, then taking money away from it is not a ‘fix’.
‘Critique of your comment: You can’t sell something you don’t own’
Sure you can. Govt sells debt all the time. In financial markets people short sell all the time. Or is this more dominant press misinformation?
‘Why not just look at the facts that private investment on average outperforms what people receive as benefits from their contributions into Social Security. This is fact. No need to prove it with a risky proposition.’
If its such a fact, why doesn’t the government just issue currency, or sell treasury bills and invest it into the stock market. Or is it too risky to do that?
‘I found out how economically illiterate ABC, CBS, NBC, CNN and the New York Times and Washington Post was.’
on social security they’re awful. I recommend:
http://www.j-bradford-delong.net/hmovable_type/
and
http://maxspeak.org/mt/index.html
Both economists.
‘Guess what. Bush’s proposal that I’ve read does nothing to alter this part of the program. ‘
And yet, his proposals are to take away funding from the trust fund which pays out these. And also to change the indexing so that future benefits are cut.
Misinformation heh?
“Personal retirement accounts don’t ‘fix’ social security.”
That’s where you don’t understand Actus…. and then you turn your misunderstanding into critiques.
The systemic problem in the system is that current workers pay beneficiaries (retirees). That was how FDR started it. This is a systemic problem because of the baby boom and how their will be a lot more people receiving benefits and less people paying into the system.
This would not have been a problem if the original system had in place people contributing for their OWN retirement (nest egg). Given that it would’ve been baby boomers contributing to their own retirement and then you wouldn’t have had to raise the 15% contribution to 25% or whatever you actus think is the only solution. (Because you mention “If the problem with the system is lack of funding” which clues people into your belief that the lack of funding when baby boomers retire is the only “problem”. Actus, what is the source of that problem. It is the way the system is setup (current workers pay for current retirees).
6% going to nest eggs is only a small start. It’ll be a very little systemic change to a problem that is inherant in the system. The transition cost is due to the fact that 6% of contributions will not be getting to the so-called Social Security Trust Fund. Therefore there is a matching of obligations by the general fund so that anyone who is paying into only the government system will receive what they are expecting.
Obligations will be honored and no amount of bloviating with accusations will change the fact that conservatives have good hearts with good intentions also.
Fortunately we are results oriented though and not just all about feelings. Therefore we look at facts and figures and history in our calculations.
“Govt sells debt all the time.” Why would anyone do this Actus to prove that private investments are good. First rule of holes. When you are in one stop digging.
Misinformation? Yes. I’m not sure why you keep making the arguments you make. It’s as if you ACTUALLY believe that someone is trying to CUT nominal dollars from people (benefits paid to the elderly) or dismantle the social security system entirely or hurt it.
You are wrong. You’re opinions are formed from misguided principles. Just like your belief that we should prove that private investments are good by making some sort of transaction that costs money (maybe 6%) in order to see if 401K’s can outperform that 6%) and what ACtus? If the 401K doesn’t outperform the 6% let’s say by 7% to earn 1% total on your money that proved your point? You are in a hole. You don’t understand what you are talking about and it is plainly obvious to anyone reading here. You are doing more harm to your cause than good.
Which is good news for our side. Because our shift in percentages will grow from 51%-52% if this kind of dialog is what we see in the next year from Democrats.
To me, it’s obviously like saying….
To prove that changing from driving 75 MPH to 65 MPH will save gas (improve gas mileage) then why don’t you put on a 1,000 pound trailer and then drive 65 MPH and let me know if you’ve saved money.
We can see the obviousness.
Private Investments on average has outpeformed and that one little concession of a fact would be nice. We don’t have to prove it by having an entity sell debt to do private investments.
Also. One more clear point again. Moving from a system where you have no nest egg that black americans can’t pass on to loved ones when they die earlier than whites to a system where there is a nest egg is one of the most equal ways of providing a system of dignity.
‘This would not have been a problem if the original system had in place people contributing for their OWN retirement (nest egg).’
Then personal accounts destroy social security. Not ‘fix’ it. they take a system of insured retirement — where we are committed to taking care of the aged and infirm in our society, and replace it with a system that is neither social nor secure. Call it what you want, but this is not a ‘fix’ of social security, it is the end of it, the replacement of it. And it is misinformation to call this a fix of social security because such a system would be neither social nor secure.
‘“Govt sells debt all the time.” Why would anyone do this Actus to prove that private investments are good. First rule of holes. When you are in one stop digging.’
you don’t have to do it to prove it. Its just that if it IS so good, then why not do it? the reason we don’t is because it isn’t such a good deal.
‘Just like your belief that we should prove that private investments are good by making some sort of transaction that costs money (maybe 6%) in order to see if 401K’s can outperform that 6%) a’
You’re the one saying that the market is so much better than social security. You’re the one who’s proof depends on equity performance. please, don’t do this plan for me. I know its risky. I know the flaws. I know that equities sometimes outperform less risky assets due to either the equity risk premium or plain old market failure. I know that the first one is incompatible with the idea of social security to provide retirement insurance. I also know the second one that it is a poor way to plan the retirement of our population on a theory of market failure.
Go back to the library and take out a nice econ book. I recommend Mankiw — he’s dubya’s economic advisor.
Actus wrote, “Then personal accounts destroy social security.”
No they do not Actus, This is why there is a 2 trillion dollar transition cost. Because Bush is proposing the funding to keep all obligations to recipients going.
Actus wrote, “You’re the one saying that the market is so much better than social security.” It is better. Social Securities’ return is less than 1% now. The market on average over any 10 year, 20 year, 30 year period out performs that by leaps and bounds. Concede already.
It’s fact. But you mix doing a loan and trying to outpeform the loan’s interest rate with the market. Why?
‘No they do not Actus, This is why there is a 2 trillion dollar transition cost. Because Bush is proposing the funding to keep all obligations to recipients going. ‘
Firstly, they’re also proposing lowering future benefits by changing the indexing formula. So its not that ‘all obligations’ are going to be kept. Some are going to be changed.
When I brought up the transition cost, you brought up that this would fix social security, mentioning the problem that it is a pay as you go system, that now people would be saving for their own retirement. When people are saving for their own retirements in risk bearing accounts that is not social and that is not secure. Thus it is not ’social security’. But you’re not interested in completely changing away from this system.
What we have is a proposal that takes funding away from the trust fund. That takes out 2 trillion dollars in loans and puts that money into people’s hands to gamble with. This 2 trillion dollar loan is an odd ‘fix’. A legislative obligation — that can be changed by future policymakers, is instead being turned into an economic obligation that is much harder to change. Thats not a fix. Thats a loan that we have to pay back. Thats the money that we don’t have for private accounts.
However, if we have some
‘It’s fact. But you mix doing a loan and trying to outpeform the loan’s interest rate with the market. Why?’
Because right now the social security trust fund is full of government debt. Debt owed by the general fund. If we can outperform government debt in the SS fund by going to the market, why not issue more debt and go to the market? why limit the gains of the market to the personal accounts?
I especially loved and affirmed your remarks about the “idiotic ideas by black people.” And I stand by that. In terms of S.S. Take heart. Pray to God to let you live long enough to get your share. I didn’t think I would. And now *every month* for the past two years without fail there is a substantial check deposited in my bank account. Nobody but God has done that! He even blessed me with great health that I almost feel like I am cheating the system to be so young (yet to be legally eligible to collect my retirement money from S.S.). Ask God and He’ll do the same for you and, when it is your time to collect, it will be there for you.
Some young people may want to thank their elders who pull out their purses and hand over a hand full of cash to them. When you know you have money coming in regularly and no longer have to work for it (called, “Retirement”), there are just so many things you can buy for yourself. Besides, people who collect S.S. can even earn more money via part-time jobs without taxation. Like somebody said in an earlier post, what’s wrong with being able to put some of your own money aside as you choose in the same way as IRA’s, etc.? It means you have to be responsible, stay alert, and become money savvy to invest *your money wisely,* after the government hands it over to you. God bless. Thanks LaShawn for your great observations.
Silent Thunder, I figure you would love those great words that LaShawn spoke “idiotic ideas by black people” I bet it makes your soul happy!
If it makes you feel better, GKP, white people have idiotic ideas, too.
Just look at Shrum and his campign strategy.
Vietnam! Vietnam! Be for it, until you’re against it!
Actus, give American Funds a call and them for the history on the fund called “Washington Mutual Fund”. It is as mutual fund put together by congressmen and senators for their own retirement accounts. The rules are very strict and the historical returns have been amazing. If congress had enacted SS to work with the same rules as they did their own retirement accounts maybe we wouldn’t be having this discussion.
‘Actus, give American Funds a call and them for the history on the fund called “Washington Mutual Fund”. It is as mutual fund put together by congressmen and senators for their own retirement accounts. The rules are very strict and the historical returns have been amazing.’
There you go. If they’re so good, lets fund the entire government on them, not just retirements.
Taking out loans to make the investment Actus?
The government doesn’t have money to invest. It is in debt.
It is OUR money that we want to GROW faster than the rate of return on Social Security which is less than 1% at this date.
I think you are looking at it backwards. It is our money. We want the government to put OUR money in a nest egg that we can call our own and PASS ON to beneficiaries (which black men can’t do and lose all of their contributions because they die earlier)
And being that it is OUR money we want a better rate of return than 1%.
CD’s and Bonds outperform that rate Actus. Over any 10,20,30 year period every indexed mutual fund has outperformed CD’s and Bonds.
Your objection is what then Actus?
Your objection isn’t that benefits will get cut because Bush’s plan proposes a transistional cost that supplements Social Security (2 trillion) so that all obligations are met.
You get caught up on non-nominal proposals of benefit cuts which aren’t cuts in actual dollars to any recipients. Over the last 30 years Democrats have (so-called) cut benefits in exactly the same ways and more by:
1)raising eligibility age
2)raising the amount of the tax rate (so that it’s now 15% total - that I pay as a self employed person)
3)raising the amount from 50% - 80% (ala Clinton in 1993) that is counted as income that taxes have to be paid on…
That 3rd one affects a recipient greatly. Imagine 30% more of your SAME income being taxed all of a sudden. Taxed to the general fund even.
But never has actual dollar amounts per month been cut to an individual and Bush’s PLAN doesn’t call for any cuts to any individuals.
Are you Actus making the claim that you know that Bush wants to or is trying to cut dollars to individual recipients per month?
‘You get caught up on non-nominal proposals of benefit cuts which aren’t cuts in actual dollars to any recipients.’
What? Changing the indexing formula changes what real wealth is transferred. I can’t believe this. not ‘actual dollars’. Nominal dollars are the non-actual one.
I wouldn’t surprise me if benefits have been altered in the past. All that I’m saying here is that its misinformation to say that the bush plan honors all obligations. At least part of the bush plan is to change obligations — the indexing. At least another part is to make it no obligation at all — the private accounts.
Overall, the problem with private accounts is:
1. they’re neither social nor secure, and therefore are not social security. They replace, not fix it.
2. They have a transition cost, which thus locks future generations into the policy decisions that we have made today, rather than allowing future generations to figure out how they will handle taking care of their retired and aged. We used to provide them a cushion for doing that — the trust fund, now we’re providing the opposite — a debt repayment.
Actus wrote, “misinformation to say that the bush plan honors all obligations”
If nobody’s check is cut then it isn’t misinformation. It’s just your fear because you distrust conservatives and Bush.
Actus wrote, “They have a transition cost”.
The transition cost is not an additional cost. The transitional cost moves future costs to the present and saves money in the future. This is key to your misunderstanding probably as well as most liberals. Don’t get me wrong here, because most conservatives don’t realize it’s not an additional cost either.
And … it’s about as secure as you can get with the proposal including federal insurance that nobodies investment gets wiped out.
As I said, CD’s and Bonds outperform Social Security.
Every indexed fund (includes whole ranges of stocks so you won’t get wiped out because of diversifying) outperforms CD’s and Bonds.
So now I should’ve wiped out your security concern.
Misunderstanding does not lead to greatness but fear
‘If nobody’s check is cut then it isn’t misinformation. ‘
If the real value of the obligations changes, then its a cut any way you slice it. One doesn’t need that much economic literacy to know that 100 bucks today is different than 100 bucks 40 years ago or 40 years from now.
Its not quite that I distrust them. Its that I trust that the goal is eradication of programs that are social and secure, as the memo leaked to the WSJ shows.
‘The transition cost is not an additional cost.’
It certainly is. For one the future obligations are uncertain — future policymakers could decide to change them. With the transition, that is not the case. Legislatively defined obligations are replaced with economically mandated ones (debt).
Secondly, it doesn’t move the costs to the present, as they’re going to be paid with debt that will be paid off into the future.
‘And … it’s about as secure as you can get with the proposal including federal insurance that nobodies investment gets wiped out.’
This is new, I didn’t know that the investments would be secured. Which is in fact an additional cost. If the government faces the downside risk, then there will be no incentive to have low-risk investment. In effect then the plan subsidizes risky behavior. We have a moral hazard problem. The insurance literature will get you started on understanding that, and I can guess that the liberal media are discussing it incorrectly.
CD’s and bonds do outperform social security. But they also serve a different function — they’re investments. SS is an insurance.
And that’s how insurance companies do business…making investments. Cause money don’t just grow on trees or stashed in some lockbox, they work to compound the investment.
‘And that’s how insurance companies do business…making investments. Cause money don’t just grow on trees or stashed in some lockbox, they work to compound the investment.’
But the average insurance costumer doesn’t see the return on that investment. They see themselves insured.
I fully support privitization of Soc. Sec. as a way out of the S.S. mess.
But, one aspect of Soc. Sec. that hasn’t been addressed is that it will be labor of immigrants who will be paying retirees S.S. benefits in the future.
S.S. is a Ponzi scheme, illegal for anyone to use but legal for the government.
It’s a pyramid with those at the top getting the benefits and those at the bottom paying them. The only way the pyramid can be prevented from collapsing is to keep broadening the base of the pyramid by importing more foreign workers and immigrants and taxing their labor.
The danger with this is that liberals will push for immigrants to be granted citizenship and then immigrants with their voting power will eventually take over and control the nation—an exchange of labor for eventual ownership of the nation.
‘ S.S. is a Ponzi scheme, illegal for anyone to use but legal for the government.’
Actually you can have legal ponzi schemes like social security. For example, I can take care of my parents when they’re too old to work.
Is that a ponzi scheme?
To Actus:
Under S.S. everyone would be laboring to take care of your parents and that’s a Ponzi scheme.
If you were the only one taking care of your parents then that would not be a Ponzi scheme—and would be the right and traditional thing to do.
‘If you were the only one taking care of your parents then that would not be a Ponzi scheme—and would be the right and traditional thing to do.’
Why would it not be a ponzi scheme? It still depends on new generations caring for the previous ones. Why cant we take responsibility for the aged and infirm in our society?
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