OBAMA TAKES A DIP IN A DANGEROUS POND
Sen. Obama is discussing a Social Security tax increase on high earners. Here's the story.
This sounds pretty innocuous. Edwards has something comparable but with a better buffer for two paycheck families. The workability is not the point. When a democrat, in a primary, talks about a "tax the rich" scheme, the GOP get to scream "Tax and Spend!" and "Class Warfare!" in the general election. Creating land mines in a primary is not a particularly good idea.
If this was a trial balloon, it should have been deflated before it was released.
posted by UMRBlog @ 15:49
35 comments
35 Comments:
Do you really believe he has a chance at the nomination? At this point I think most believe in the inevitability of Hillary.
z
No.
Absent a Muskie-Meltdown, it's pre-cooked.
TYFCB
Barack Obama deserves credit for getting into specifics on what he would do to fix the coming fiscal train wreck that is the Social Security system. Because there are no easy answers candidates of both parties avoid the issue like the plague.
Except for Barack Obama, who this week became the first candidate to propose a plan. A plan that’s all wrong, but a plan none the less.
0853
Actually, Edwards was out with his (also not great) in about April.
You are right about it being a third rail.
TYFCB
#
There are three potential fixes for Social Security. Either reduce benefits, raise taxes or increase the return on investments. The last was deemed ‘risky’ by the dems so according to the libs like Obama were left with either raising taxes or lower beneifts. Consider that if you think the 2008 election isn’t important.
Social Security,
Assume your "three Choices" are correct. The congress balked at self-direction, not increased earnings. Increased earnings could easily be achieved without earmarking individual accounts.
I will give you the Social Security discussion since 1983 hasn't been exactly "Profiles In Courage." At least we haven't heard "Lock Box" in a while.
TYFCB
"Increased earnings could easily be achieved without earmarking individual accounts."
If it is easily achieved, why haven't we done it?
"Increased earnings could easily be achieved without earmarking individual accounts."
You must have several examples to illustrate the ease at which this could be achieved.
Liberals are desperate to keep Social Security the way it is, because that means they can keep spending your money as they see fit and keep you dependent on them. That's what the welfare state is all about
With just a very small part of the pile in equities as directed by the trustees and another small pile in highly rated debentures, the rate could be increased by a percent and a half. The coupling of "individual accounts" with equity investing set up a false choice.
Of course this would remove some SS funds from general fund availability and that would require some on-going, rather than past-annual, accounting.
TYFCB
0736,
That's very nice doctrinal horsecrap. Social Security is like the occupation of Iraq. It no longer makes any difference whether it was a dog decision. We have to make intelligent ones going forward.
Cussing "Liberals" is not likely to lead to any constructive solution.
TYFCB
umr 805
Do you disagree that it is the liberals who oppose privatizing Social Security?
Why are liberals against letting people put part of their Social Security payments into private investments?
0837,
First, I disagree that it was only liberals. Second, if "privatizing" and a "Social" program are not contradictions in terms, I don't know what a contradiction is.
False boogeyman here.
0954,
Yoo-Hoo, it's a National Social program. It's there. If you want to exempt additional mini-Roths great!
It is possible for the fund to invest in equities without private ownership. That way it can remain a national social program.
This "private holding" thang is just an indirect way of conducting the old debate about abolishing SS.
TYFCB
umr 1056
Do you disagree that there are many liberals who oppose privatizing Social Security?
'This "private holding" thang is just an indirect way of conducting the old debate about abolishing SS.'
Why would this be a bad thing? You do understand something must change. Your solution of whatever the hell it was to gain 1.5% more will not make it solvent. You do understand that don't you? It's simple math.
The investment modification comment was in answer to 2027's direct question. Nobody said it was a cure for the $13T deficit.
1101,
No. And your point was.....?
TYFCB
1103,
You are absolutely correct. I was only pointing out the false choice presented by the "privatizing" debate. The fund can be in equities and even bonds without mini-Roths. Never said and don't think that fixes the problem. Ya know, if it gets up above $13T, that's officially real money.
How do you tell when you've arrived at "real money?" When it's more than Rocky Cola spends on a concert weekend.
TYFCB
umr 1113
Needed to establish that first. Now, why do you think that is?
I thought the last two stock market declines and current housing decline, put an end to privitizing Socian Security. If it did not, it should. I am all for soaking the rich but think they have a right to their SS and Medicare like the rest of us.
What is Hillary's position on Social Security?
Well,
My best guess is because they wanted it to remain a uniform, National, Social Program and not some heritable property interest.
Now I'll breathlessly wait for you to tell me to what conclusions that inexorably leads us.
umr 1244
Do you think it is a good program?
1253,
That short, little question deserves a thoughtful answer and it may be tomorrow before I can give you a complete one.
I appreciate the question.
TYFCB
"My best guess is because they wanted it to remain a uniform, National, Social Program and not some heritable property interest."
That's a good guess, but a more likely reason for liberal opposition to private investment of Social Security payments is that it deprives them of control of billions of dollars that they have been spending from the Social Security trust fund for years. They can buy a lot of votes with all sorts of giveaway programs, financed by money taken from Social Security.
z (forgot that for nearly every other anon w/ the exception of 1140 who is busy burying his/her nest egg in a coffee can in their backyard, the short question is mine too.)
That's the need for ongoing, as opposed to post-annual, accounting.
That's why the equity/debenture investing approach (which would be helpful) would require a change in behavior.
You really want to blame porcine spending, necessitating SS trust raiding, just on "Liberals?" The biggest porkers in congress over the last ten years haven't been dems.
But I agree with you both the porking and the SS impact are undesirable.
TYFCB
I'll give you the last ten years.
Let me ask you this. What moral principle, consistent with liberty, justifies forcing a person to set aside a certain portion of his weekly earnings for retirement and jailing him if he fails to comply?
Let's leave "jailing" out of it. Skip the penalty provision and you still have a point.
A society based upon individual liberty has no moral basis for an extractive provision for retirement. That this argument did not hold the day when the SS plan was proposed still amazes me.
The problem now, today, is that there is a competing moral principle which says a responsive gov't does not let people pay into a benefit plan, promise them a benefit and then snatch it away.
Once that rock started rolling down that hill, it all got very complicated.
TYFCB
Would you sign a contract that enabled the other party to change the terms of that contract at will, while you could neither stop him nor make any changes of your own? Probably not. Yet that is exactly what happens when you pay money into Social Security.
No matter what you were promised or at what age you were supposed to get it, the government can always pass a new law that changes all of that. But you still have to pay into the system.
A private annuity plan run by an insurance company is legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem its promises.
So I ask again,Why are liberals against letting people put part of their Social Security payments into private investments?
Some liberals may actually believe that politicians know what is best for you better than you know yourself. That is, after all, the philosophy behind many other government programs.
Social Security has been run like a pyramid scheme, where the first people to pay in get money back from the second wave of people who pay in, and the second wave get money back from the third wave, etc. This is so risky that pyramid schemes are illegal except when the government does it.
z
umr
You never did answer this question,
What is Hillary's position on Social Security?
Do you agree with her position? Why or whynot?
Folks,
I owe 1158 and 1244 replies. I never promised instant messaging. These are decent questions and this is not my only obligation.
Stay tuned.
1253,
No. I think it may have been "good" through the 50's but I think it has three basic infirmities: 1)It accumulates piles of money that invite political mischief; 2) The Cost of administering it are too high; and (3) It will always pay out on outdated actuarial assumptions.
The next obvious question, then, is "should it be abolished." That's tough because it has become a social contract and part of folks' retirement planning. I think there would have to be a very thoughtful "weaning" period that might have to start with folks who aren't even alive now. (Note: this is not a reference to a SS "fix". That is an entirely different topic).
Honest, if oversimplified, answer.
TYFCB
Now give Hillary's position try harder on this one.
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