Mar 31 2005
A Political Price to Pay?
The one thing I love about our President is his unfaltering ability to convince himself that no matter what the evidence, opinion polls, or reality disagree with his policies, he is on the right side of the issue.
Take for example the recent Social Secuirty ‘crisis’ sham. Everyone knows that support for his plan is waning, yet he continues to put forth the perception that it’s everyone else in the country who’s wrong, not him. Recent polls show a vast majority of Americans don’t agree with his ‘plans’ for social security reform, especially the foundation of those ‘plans’, private investment accounts.
Yet, he had this to say to members of Congress yesterday as a warning if they don’t support his plan:
“Now is the time to fix it, and I think there is a political price for not getting involved in the process.”
The fact is, hardly anyone - GOP or Democrat - is involved in the process, even the GOP congressmen he had on stage yesteray with him!
And yet, according to Bush, there’s going to be hell to pay if congressmen and congresswomen agree with the majority of their constituents and don’t back his ‘plan’! Talk about a strong argument! …
“Support my plan or else 60% of Americans will agree with your decision not to come election time!”
I can see members of Congress trembling now…
I really don’t understand the Democrats who insist that SS doesn’t need reform. I mean, it’s one thing if you disagree with the Bushites’ plan, but I don’t understand the disagreement with the need to do something.
But a lot of Democrats DID agree SS needed help during Clinton’s presidency, Matt. You can chalk this one up to our favorite theme in Washington–partisanship. Of course SS needs some work, but Dems will be damned if they let a Republican president take credit for it. Although I personally think private accounts are a terrible idea, I don’t have a problem with either a collective investment account OR a higher tax rate on the wealthy.
That’s exactly my point. The Dems were fine with it during Clinton.
What the Dems were fine with back in the mid-late 90’s isn’t what’s ‘on the table’ today. In fact, when the topic of privatization came up back then, the Dems were against it. So that’s the reason they’re not going along with Bush’s plan for reform - they don’t believe in privatization.
As for all the talk about why the Dems don’t ‘have a plan’, I don’t really get the criticism. That’s like me announcing I’m having a huge party next year, and then blaming the guests for it’s eventual failure becuase they didn’t bring the food, set up valet parking, or hire a DJ.
The President has no right to criticize anyone for not having their own plan, when as the person who brought this issue into the spotlight, he has yet to do so himself.
Dan, yeah, and rock on. That would make total sense if the Democrats were saying “Hey, privatization is the sux0rz”. Instead, though, they’re saying “it’s not a problem right now”, which is what I don’t get at all.
Dan, how can you be an apologist for your political party at this point? mwarden and Les hit it right on the head. SS needs fixing and the Dems are playing politics. It’s not Bush planning a party and forgetting to park the car for the DJ or whatever you were trying to say above … the Dems are playing politics.
Sorry about the late response, been a busy week…
I’m not being an apologist for the party, I’m just pointing out that Bush brought this issue up, and he shouldn’t rely on Dems to figure out the details for him.
What is the Dems plan on Social Security? I think like most people, they believe in long term solvency. How we get that is where the contention comes in.
Even the Pres. is now saying that his plan for private accounts would do nothing to ‘fix’ social security, and others have pointed out that his private accounts would actually cost us more in the long term. And yet he keeps talking about it as the answer to our problems.
The fact is that a majority of American’s don’t see Social Security as a top issue right now. They see things like the economy, our security, heath care, and Iraq as the main issues of the day and I don’t think it’s wrong of the Dems or the GOP to listen to people and adress those needs first, before tackling an issue that only the President see’s as critical.
mwarden said, I really don’t understand the Democrats who insist that SS doesn’t need reform. I mean, it’s one thing if you disagree with the Bushites’ plan, but I don’t understand the disagreement with the need to do something.
Dan says, I don’t think it’s wrong of the Dems or the GOP to listen to people and adress those needs first, before tackling an issue that only the President see’s as critical.
:) I guess the Dems don’t get it, hey mwarden?!
Now hold on one second, Yeah Boy. Let’s not assume all Dems have blinders on when it comes to SS reform. Is the Democratic leadership playing politics with this issue? Of course. Democrats don’t want Bush messing around with SS, period. We have fundamental differences in how we view the SS crisis–yes, crisis–but we’re not about to let Bush use fear tactics to push his bullshit “private individual investment accounts” plan through!
Dan and I disagree to an extent on this issue…
If it means we have to downplay the severity of SS’s impending problems to win public support, I say do it! Bush set the template for the manipulation of public perception when he overstated the national security threat posed by the Hussein regime. Can’t you see that’s precisely what the Democratic leadership is doing with SS? Take a look at the 1990’s, for Christ’s sake! Clinton wanted SS reform, didn’t he? His proposed reforms, however, didn’t employ the same reckless strategy that Bush’s does! That’s the difference here!
It’s not that Democrats “don’t get it”. It’s that Democrats will use every means necessary to stop the Bush administration from hastily employing a Social Security “reform” package that has NO CHANCE WHATSOEVER of fixing Social Security!
If it means we have to downplay the severity of SS’s impending problems to win public support, I say do it!
I am maddened somebody would think that way. It’s not you against me Les! This is not a friggin’ game. I don’t play politics, maybe you do, but that’s crap if you do. Let’s fix SS and quit acting like babies.
No, it’s not you against me, Yeah Boy. It’s one party against another, and the American people are stuck in the middle.
What’s better? Putting a SS reform package in place that actually helps SS, or wasting time and energy passing a piece of garbage “reform” plan that does nothing to avert the impending crisis?
Please keep one thing in mind here–I’m a liberal, NOT A YELLOW DOG DEMOCRAT! We’re not on opposing sides with this one. I want to fix the problem and so do you. Unfortunately, Bush’s plan DOESN’T DO THAT! Why not wait until we have a plan that does? If it means the Dems gotta’ use a few dirty tricks to kill Bush’s “plan”, I say do it! Why is that a bad thing? The system isn’t perfect, friend! Sometimes you have to fight fire with fire! :)
Please keep one thing in mind here–I’m a liberal … If it means the Dems gotta’ use a few dirty tricks to kill Bush’s “plan”, I say do it!
I am glad I am not a liberal.
We’re not on opposing sides with this one. I want to fix the problem and so do you.
I agree. :)
Why not wait until we have a plan that does?
Why don’t you tell me a plan that would work? The libs/dems don’t seem to have one.
Ok…
How about a COLLECTIVE investment account as opposed to an INDIVIDUAL investment account plan? That way everybody stands to earn 10-12% on their investment, not just the stock market savvy! This way, those that make the wrong investment decisions–and there would be many–won’t be left out in the cold.
Or how about raising the tax bracket on the wealthiest Americans? I know that’s a hot topic for your side, but it would work! They’re still going to live the life of luxury. It’s not like we’re endorsing Soviet politics here!
Come on, buddy. Why are you “glad you’re not a liberal”? Agendas require political strategy, and these are the cards we’re dealt, no? Blame the Democrats and the Republicans, not those who are forced to use the parties to achieve real progress. :)
Why don’t you tell me a plan that would work? The libs/dems don’t seem to have one.
Neither does the President, or any GOP lawmakers.
And while you’re glad you’re not a liberal because they’re blocking GWB’s plan, I can only assume you were glad you were a conservative when the GOP blocked Clinton’s plan in the mid-late 90’s. So despite trying to appear to be on the moral high ground, and casting Dems as obsctructionists, you were probably in the same situtaion, on the other side of the argument, which makes you a hypocrite :)
Don’t take that the wrong way or anything, I’m just once again pointing out the fact that what was acceptable ‘then’ is an outrage now when Dems do it. (Insert fillabusters, policy decisions, and going to war examples here)
How about a COLLECTIVE investment account as opposed to an INDIVIDUAL investment account plan? That way everybody stands to earn 10-12% on their investment, not just the stock market savvy! This way, those that make the wrong investment decisions–and there would be many–won’t be left out in the cold.
Les, you might want to take a look at Bush’s plan (or, at least what he has laid out so far). It’s pretty much what you are suggesting. People paying into SS would have the 8-10% tax continue to go to FICA and the remaining 2-4% would go into a broad mutual-fund-like investment account very similar to the current Thrift Savings Program that federal employees already have available to them (see: http://tsp.gov). There is only a very trivial decision that one would make: essentially, whether to invest in international stocks, small business stocks, general common stocks, government bonds, or a fixed income investment fund. It is not as if people are picking a stock here and a stock there to invest.
The two problems with this plan are (a) someone has to pick these stocks, and it would be difficult to keep this process from corruption, and (b) we have to do something to account for the 2-4% lower FICA income. (a) is tough, and (b) probably should be accomplished by lowering benefits. This is unpopular because it is unfair to those who paid the full FICA tax and aren’t getting the full benefits.
The reason you were probably confused is that you saw Bush saying “Look, you can invest your money better than the government can.” These words still puzzle me, because it would be the government doing the investment on behalf of you, and you have relatively little choice in the matter.
To be honest, the only beef I have is that I can’t opt out altogether and have that 2-4% go into my own pocket where I can ACTUALLY INVEST IT MYSELF. (Although, this would never happen because certain people would opt out for the wrong reasons, spend the money, and then fall into another social program where we are essentially undoing what the PRAs are trying to accomplish.)
So, knowing this, is this something you think could help?
Dan, you are reading what you want to read, not actually what I said …
Here is the comment: If it means the Dems gotta’ use a few dirty tricks to kill Bush’s “plan”, I say do it!. Liberal Les (an admitted liberal) wants the Dems to use dirty tricks, that’s why I said I’m glad I’m not a liberal. If liberals think like that, I’d rather not participate.
I can only assume …
I can only assume that since you live in Wisconsin, you drink beer, eat cheese, look like a hillbilly, worship the Packers, drive a truck with glass packs, dual exhaust, have a gun in the back window and say “ey” a lot.
Is my assumption correct? Probably not, that’s what’s wrong with assumptions.
mwarden - you beat me to it … oooh that would have felt good.
Incidently, does that ease your mind a bit, Les?
Right, but it’s OK when the GOP uses ‘dirty tricks’.
FWIW, I do think the solvency issue of Social Security needs to be addressed. As I’ve said repeatedly though, I personally don’t think it’s a ‘crisis’ and a few simply adjustments would address problems we’re facing, just like they did in the early 80’s when we were in a similar situation.
Guys, you’re missing a key point of my argument here. Matt, I’m not suggesting that Bush’s plan allows for indiviual stock selections. The problem arises from entrusting the general public with the authority to decide how that 2-4% is utilized. That decision is hardly trivial! It’s a system that assumes everyone is going to understand market trends and economic nuances, and I’m hardly convinced that everyone is qualified to make those choices with such a large–yes, large–chunk of their financial future!
To alleviate fears about potential corruption, there are always safeguards. An independent, non-partisan management structure, answerable to the public, would work. Since it would be a public financial entity, accounting practices and all financial activity would be available to anyone who asked.
Coincidentally, Yeah Boy, I don’t mind the Dems using the “dirty tricks”–i.e. playing politics–if it means Bush’s SS plan is stopped, that’s all. It’s not like they’re lying about why we should start a war or anything. You still didn’t answer my question why you think that’s such a bad thing. Do you really like Bush’s SS plan? Do you honestly think it’s going to protect everyone?
What plan of the Presidents is there to even like? He continually refuses to put one forth.
Guys, you’re missing a key point of my argument here. Matt, I’m not suggesting that Bush’s plan allows for indiviual stock selections. The problem arises from entrusting the general public with the authority to decide how that 2-4% is utilized. That decision is hardly trivial! It’s a system that assumes everyone is going to understand market trends and economic nuances, and I’m hardly convinced that everyone is qualified to make those choices with such a large–yes, large–chunk of their financial future!
Les, I actually think you might be missing the point. I’m not sure if you just skimmed over what I wrote or what, but once again no individual is deciding anything about how their money is being invested, except for whether they would like to invest in government bonds (but not which ones), international companies (but not which ones), small companies (but not which ones), common stock (but not which ones), or a fixed income retirement fund. Which stocks are being invested in is still being decided by the government, which, like I said, seems to be exactly what you were suggesting.
As for using an independent commission, etc., etc., etc…. yes, that’s what we’d probably end up doing. Unfortunately, that won’t stop corruption of it.
Dan, I agree. The guy doesn’t have his shit together, really. But, part of the problem is that too many people are arguing about whether there is a problem to solve, rather than how to solve it. I wish we could get beyond that initial step, personally.
Republicans are saying there’s a crisis. Democrats are saying there’s no problem. Everyone’s playing politics and no one’s solving anything.
Yeehaw.
Matt, we’re going in circles here. :)
Read my post again. What you’re explaining is precisely what I disagree with! I’m not saying they would choose which individual bonds, stocks, whatever, to invest in. I have a problem with the fact that they are choosing *between* bonds, stocks, small businesses, etc.!
How will everyone grasp the risks associated with fluctuations in the bond market upon their retirements? How will everyone understand the pros and cons of international vs. domestic investment? They won’t! Some people are going to choose the right channels for their investments, and some aren’t, plain and simple. They’re not all going to enjoy positive returns. It has nothing to do with choosing the right individual stocks or bonds, which is what I believe you think I’m implying, correct?
I don’t agree with everything on the link I’m giving you here, but check this out:
http://www.socsec.org/publications.asp?pubid=503
You have to be kidding me. The comparative levels of risk can be summed up in about 3 sentences. We could even come up with a color coded system, if you would like. Any further confusion could be cleared up with a quick phone call to SS.
Sorry for misunderstanding what you were saying. I guess I just didn’t think this could be what you were suggesting.
You can’t dismiss these concerns as irrelevant, Matt. I think you and I would have a good shot at choosing the right avenues for our money, but I work in the financing industry, and I can tell you this much about people: They’re freakin’ morons! You wouldn’t believe how incredibly uninformed people are about the most basic economic principles. How’s the bond market doing right now? You really think everyone understands the relationships, directly or indirectly, between the various markets? No way. I see it on my job every day, and those people are the ones that would suffer from Bush’s proposal.
Interesting idea on the color coding, but who’s going to put their money in the market associated with red, for example? ;)
And I think the tougher question that needs to be answered is, wouldn’t people simply pick their favorite color in the scheme to put their money into regarless of the risk level it represents?
Some people are morons, so no one should have a choice in anything, right? Everything should be decided by the government, because we know there certainly aren’t any morons there, right?
Why do we let anyone invest in the stock market, then? They could lose their money, you know!
These are long term and diversified investments. It really doesn’t matter how the bond market is doing right now, as long as it makes more than the current 0% (or, negative, if you like to account for inflation).
If you work in the financial industry, then you should understand that allowing people to make a choice in this matter is only further diversifying the investments of SS monies. Let’s say we go with your idea and EVERYONE must invest in the avenue that the government chooses. Now, something turns and that avenue turns out to be a bad choice. Everyone loses lots of money instead of just the percentage who chose that avenue. Now we have to somehow take care of many more people.
This is, of course, only if you are considering the worst case scenario (which is what you seem to be considering).
Why do we let anyone invest in the stock market? Because that’s their own money, not money set aside for SS, and they have every right to take risks with it.
Look, I’d rather let an independently regulated body designed specifically for this purpose handle these investment decisions than people who are poorly equipped to make these choices on their own any day of the week. I guess this essentially breaks down into the acute differences in how we view the role of government, Matt.
Your point about diversifying SS monies still doesn’t account for the disparity in knowledge amongst the public, or, for that matter, plain ol’ luck! There’s still going to be winners and losers. Why not put our best “team”, if you will, on the field–i.e. the aformentioned independent body–and let it do its thing? The worst case scenario you just mentioned is just that–a highly improbable worst case scenario. Would you agree?
Because that’s their own money, not money set aside for SS, and they have every right to take risks with it.
That’s the point of the 2-4% that would be invested in PRAs.
That 2-4% is diverted from FICA. I was talking about funds independent of tax money already destined for FICA under the current system.
I don’t want to see that 2-4% diverted in the proposed manner. Fair enough?