Mr. President? About Social Security...

OK. For a very long time, the primary function of (0.00 / 0)

government was seen to be as a source of rewards for supporters and threats or punishment for the recalcitrant.  That's how come we had public officials doling out rights left and right:

fishing rights
grazing rights
mineral rights
etc.

Now that the natural resources have been largely depleted, the benefits available for distribution are contracts and long-term revenue streams from bonds.  Collecting taxes and spending them on the spot doesn't fit into this scheme because there's no revenue stream trickling down.
While contracts for services may have a built-in profit, administering a contract is a lot more work than collecting interest on a bond.  That's why the latter are preferred.
When the federal government borrows from the Social Security Trust Fund and pays the money back with interest, the financial middlemen are cut out.  And that's why they object.  They see a huge pot of money and they want a crack at administering it and collecting their usual fees.

We need to remember that when Republicans are opposed to something, it's because they're for something else.  And that something is usually connected to putting money in their pockets.

---

by: hannah @ Tue Feb 17, 2009 at 18:43:21 PM CST

NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO (4.00 / 4)

NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO !!!

I've long suspected that all the money I've put in over the years somehow won't come back to me in full later on, thanks to people monkeying with FDR's legacy.  But I'll be damned if that happens under a Democrat's watch.

Here's Dean Baker:

The second reason why this task force is strange is that Social Security doesn't need reforming. According to the Congressional Budget Office, it can pay all scheduled benefits for the next 40 years with no changes whatsoever.

...In short, the vast majority of baby boomers will be approaching retirement with little other than their Social Security and Medicare to support them. And now President Obama is apparently prepared to appoint a commission that will attack these only remaining pillars of support.

It is especially infuriating that this task force is likely to headed up by economists who somehow could not see an $8 trillion housing bubble. The incompetence of such economists has inflicted enormous pain on billions of people around the world. However, unlike people who fail in other professions, economists who mess up on the job just get promoted so that they can do even more harm.

My guess is that this task force will not be very popular except at the Washington Post and on Wall Street.

birch, finch, beech

---

by: Dean Barker @ Tue Feb 17, 2009 at 18:47:46 PM CST

Sounds pretty serious (4.00 / 1)

I can't imagine Gregg has any juice with Obama right now, though.

Dean Barker linking to Dean Baker confuses me ...

---

by: JimC @ Tue Feb 17, 2009 at 21:23:18 PM CST

Sometimes when I meet (4.00 / 2)

people in "real life," and the subject of my blogging comes up, I'll get a "OMG, you're that awesome economist!"

Awesome.

But more preferable is the odd fan email I'll get for Dean Barker, the Michael Jordan of yachting.

birch, finch, beech

---

by: Dean Barker @ Tue Feb 17, 2009 at 21:30:20 PM CST

[ Parent ]

Funny (0.00 / 0)

There is a Michael Jordan of yachting?

---

by: JimC @ Tue Feb 17, 2009 at 21:31:51 PM CST

[ Parent ]

People in real life (0.00 / 0)

I don't know how to embed pictures so here's a link to a comic strip I came across this morning that seems apropos.

http://news.yahoo.com/comics/n...

...the Doo Dah Man once told me you've got to play your hand. Sometimes the cards ain't worth a dime if you don't lay 'em down.

---

by: rambler american @ Wed Feb 18, 2009 at 05:32:44 AM CST

[ Parent ]

People in real life (0.00 / 0)

I don't know how to embed pictures so here's a link to a comic strip I came across this morning that seems apropos.

http://news.yahoo.com/comics/n...

...the Doo Dah Man once told me you've got to play your hand. Sometimes the cards ain't worth a dime if you don't lay 'em down.

---

by: rambler american @ Wed Feb 18, 2009 at 05:32:44 AM CST

[ Parent ]

I don't know how to embed pictures... (4.00 / 5)

but evidently I'm twice as good at posting comments.

...the Doo Dah Man once told me you've got to play your hand. Sometimes the cards ain't worth a dime if you don't lay 'em down.

---

by: rambler american @ Wed Feb 18, 2009 at 05:34:57 AM CST

[ Parent ]

The Michael Jordan of Yachting (4.00 / 2)

How many times do you have to retire, lose all your money, and come back to be the Michael Jordan of Yachting?

---

by: This Was The Moment @ Wed Feb 18, 2009 at 16:47:54 PM CST

[ Parent ]

You "retire" from yachting (4.00 / 2)

and see whether you can cut it blogging.

---

by: elwood @ Wed Feb 18, 2009 at 17:06:24 PM CST

[ Parent ]

Nothin' but NET (4.00 / 2)

heh

...the Doo Dah Man once told me you've got to play your hand. Sometimes the cards ain't worth a dime if you don't lay 'em down.

---

by: rambler american @ Wed Feb 18, 2009 at 17:42:25 PM CST

[ Parent ]

Then there's Dean Broder n/t (4.00 / 2)

---

by: elwood @ Wed Feb 18, 2009 at 05:03:13 AM CST

[ Parent ]

I hope you're right, elwood (4.00 / 1)

I don't really want to have to go out and actually organize folks to work against our new president.  

---

by: susanthe @ Tue Feb 17, 2009 at 22:09:10 PM CST

i'm doing some social security reading... (4.00 / 1)

...and i thought you might enjoy this quote...

"Until a few days ago, it appeared that an omnibus bill to make social security solvent and extend supplemental unemployment benefits would be enacted this week. I would have gladly signed this vital measure to relieve legitimate worries about the economic security of so many.

Now, however, a selfish special interest group and its congressional allies are attempting to make this vital economic security bill a legislative hostage. But let me make absolutely clear that an unrelated rider amendment--based on a campaign of distortion and designed to prove that the banks and other financial institutions can still have their own way in Washington--has no place in the bill pending before the Senate.

We should not accept an amendment designed to prevent the collection of taxes that are already owed on interest and dividends, even if the financial institutions find it inconvenient.

This morning, I have strongly urged the leadership of the Senate to take whatever steps may be needed to free the economic security bill from this blatant attempt at legislative hostage taking. The social security and unemployment insurance lifeline that extends to millions of Americans across the breadth and width of our land cannot be permitted to be severed by the obstructionist tactics of a Washington lobby and its congressional friends. As I said last week, it would be far better if the bankers spent less time lobbying and more time lowering interest rates."

...from ronald reagan.

--we are making enemies faster than we can kill them

---

by: fake consultant @ Wed Feb 18, 2009 at 00:54:42 AM CST

On Trojan Camels (4.00 / 2)

Under the radar an extremely rich jerk named Petersen has donated about $1 Billion (yep with a b) to the campaign to eliminated Social Security. He calls his campaign I.O.U.S.A. It claims to be about all the borrowing we are all doing including most significantly the Republican greed machine - but he doesn't talk about that much. While the borrowing sucks, it comes mostly from people who work watching the buying power of their wages decrease while we give $800 billion to those that stole the first $800 billion. We mustn't let this camel stick his nose in our tent. Camels smell bad particularly trogan camels. Do you know where your trojan camel has been lately?

---

by: xteeth @ Wed Feb 18, 2009 at 07:03:05 AM CST

On cuts.. (4.00 / 1)

Sooner or later we're all going to need and wisen up and recognize the fact that the hole in the Social Security trust fund is very real and we're going to need to address it.  I don't understand what all the complaining is about.  We're going to need a commission to generate some political cover for alterations that increase revenues and cut spending (the only two ways to fix the problem), and it needs to be bipartisan.   Say what you will about the unfairness of cutting benefits for those who have already paid into the system or the raising of payroll taxes (or raising the cap on payroll taxes, which wouldn't solve the whole problem), but this is a real problem and it needs real action.

---

by: fontasj @ Wed Feb 18, 2009 at 08:55:26 AM CST

A little more context. (4.00 / 2)

1. The claim that the fund is in serious trouble is based on the Trustee's "middle" projection. Each year the accountants prepare three projections. Over the years the middle one has been way too pessimistic. For many years the date when the fund would be drawn down, moved out one year per year. The problem is not as severe as the Trustees have claimed.
2. It isn't true that "alterations that increase revenues or decrease benefits" are the only events that improve the program's finances. For example, demographic changes - another bubble or a change in average lifespan - would do that. So would decisions by workers to retire early - for example because their 401-Ks were so robust. Increases in average wages would result in a bigger trust fund without changing the system.
3. The diary - did you read it?? - specifically objected to putting Republicans on any commission. Their objective is to kill the program. Don't let them in the operating room.
4. And the notion that we need a commission to provide political cover is Beltway conventional wisdom based on a contempt of the public. The only thing a commission will do is provide a smoke-filled room out of the public eye.

---

by: elwood @ Wed Feb 18, 2009 at 10:00:43 AM CST

[ Parent ]

RE: A little more context. (0.00 / 0)

In regards to point 2, I would just point out that it is probably not the best idea to rely on economic growth/growth in wages and good performance in the financial market to fix the hole in the trust fund.  It doesn't really matter which projection you look at, at least everyone with experience in budgeting knows that there is a hole that needs to be fixed, and that it needs to be fixed with actual solutions, not just a reliance on favorable projections of economic growth and a smaller trust fund hole.

For the sake of my argument, I am relying on the figure presented here: http://www.ssa.gov/OACT/TR/TR0...

---

by: fontasj @ Wed Feb 18, 2009 at 11:40:53 AM CST

[ Parent ]

Link... (0.00 / 0)

It didn't do the best job linking, the figure is Figure II.D4.

---

by: fontasj @ Wed Feb 18, 2009 at 11:42:24 AM CST

[ Parent ]

Read your own link. (0.00 / 0)

Look at II.D7. It DOES matter which projections you accept.

Regarding "relying on" optimistic projections: you are "relying on" historically pessimistic projections.

And you really can't speak for "everyone with experience in budgeting."

---

by: elwood @ Wed Feb 18, 2009 at 12:58:57 PM CST

[ Parent ]

You guys are looking at it from different perspectives (4.00 / 3)

Elwood: you are focused on the political debate over S.S. as it's been framed during the past couple decades and making sure that the S.S. debate stays clear of any more GOP schemes designed to destroy it.

At this point I think the public has little appetite for privatization of anything, beyond the popular distaste for Bush's S.S. initiative that we saw 4 years ago.  We can admit that there may be structural weaknesses in the S.S. system now without yielding any ground in the argument over how it's paid for.

From Jeff's perspective, it doesn't really matter how bad the projections are.  If the trend is downward at all it's possible we may reach insolvency in our lifetime, if not yours.

Apart from the unfair way that Social Security is paid for, the way benefits are distributed is inefficient and reinforces inequalities in society.  Given the public attitude right now and this Administration's realist/technocratic bent, I'd say studying this issue more - and whether you call it a commission or anything else is really not important - is a good idea.

It's time we steer by the stars, and not the lights of every passing ship

---

by: Andy Edwards @ Wed Feb 18, 2009 at 13:24:38 PM CST

[ Parent ]

OMB (4.00 / 1)

I was intrigued by the bit about OMB being in the driver's seat, but Jane's source is a National Review guy speaking out his elbow. He says OMB always gains power in the early days of an administration, which is a reasonable assumption (they know where the money is), but it is an assumption. I could just as easily say a young, freshly victorious administration would blow off OMB altogether.

Unless Jane knows something I don't about the NR guy.

---

by: JimC @ Wed Feb 18, 2009 at 11:13:22 AM CST

I believe Orszag is widely respected (4.00 / 1)

He came to OMB from the Congressional Budget Office. People in both parties tend to believe his numbers, and he has spent his time providing impartial analysis.

---

by: elwood @ Wed Feb 18, 2009 at 11:24:09 AM CST

[ Parent ]