What are McCain's Plans for Social Security?

Mark Kleiman notes the implications of the McCain campaign's recent statements about taxes and Social Security:

McCain says: "Slash Social Security benefits", by Mark Kleiman: No, that's not a headline you can expect to read. But it's the truth.

Carly Fiorina says that McCain might raise taxes on rich folks as part of a Social Security deal.

Grover Norquist, speaking as the Grand Inquisitioner of the anti-taxers, more or less replies: "Bullsh*t! I wear McCain's b*lls on my keyring!"

Then comes the punchline:

A McCain campaign spokesman told ABC News Monday that McCain continues to oppose any tax increase as part of Social Security reform, notwithstanding Fiorina's comments.

"The lesson of history is that too many specifics at this point polarize the debate, that is the argument Carly was trying to make," Taylor Griffin said. "However, John McCain does believe that we can fix Social Security without raising taxes. As president, John McCain will call on Congress to develop a bi-partisan solution to Social Security — and if they won't, he will."

Three points here:

1. "Too many specifics at this point polarize the debate" translates into English as "If we told the retirees how completely we plan to shaft them, they might not vote for us."

2. The McCain camp seems to have invented a new idea: unilateral bipartisanship. If Congress doesn't come up with a bi-partisan plan, McCain will single-handedly come up with his own bi-partisan plan.

3. Since McCain has now committed to "fixing" the Social Security "problem" without raising taxes, and since the only two ways of getting projected revenues to match projected benefits is to increase revenues or reduce benefits, it follows that McCain is committed to cutting Social Security benefits. And that's before he has to reduce them again to accommodate the diversion of new money into private accounts.

So not only does McCain think that Social Security is "an absolute disgrace," he knows what he wants to do about it: he'll reduce pensions but not increase taxes on the wealthy.

This seems to me like Christmas in July.

First, I don't want to leave the impression that Social Security is a big problem - it's not. Some tweaks may be needed to bring revenue and benefits into alignment, but it's nothing that can't be handled relatively easily according to current projections.

But McCain believes there is a problem despite the projections (otherwise why would he be talking about fixing it?), and his plan for dealing with it appears to be to cut benefits (I count increasing the retirement age as a cut in benefits and, since you work and pay taxes for more years than before, an increase in taxes as well, so is he ruling this out?). Whether the problem is real or not, his choice of how to deal with it is telling.

Then here's the question. Why hasn't the Obama campaign opened their Christmas gifts and made use of them? Why haven't they gone after McCain's "disgrace" remark regarding Social Security? Have they said anything at all about that? Why haven't they hammered away at some of his statements and the inconsistencies surrounding them about carve-out privatization plans? Will they do anything with the implication identified above that McCain must be planning to cut benefits? Why so much silence from the Obama campaign on the Social Security issue?

Comments

[pgl]

Soc. Sec. itself is not a big problem but the General Fund deficit is. The benefit cuts envisioned by the Bush and McCain crowd are more designed to subsidize the General Fund deficit and less to solve this non-problem.

[Carolyn Kay]

Obama doesn't fight McCain on Social Security because, as Paul Krugman has said a number of times, Obama uses right-wing talking points on Social Security.

Obama scares the hell out of me.

Carolyn Kay
MakeThemAccountable.com

[mdm]

Oy...

Despite the acknowledgment there really is no SS crisis I will proceed with comments...

>>1. "Too many specifics at this point polarize the debate" translates into English as "If we told the retirees how completely we plan to shaft them, they might not vote for us."

Is this to anyone's surprise? McCain knows who butters his bread.

>>2. The McCain camp seems to have invented a new idea: unilateral bipartisanship. If Congress doesn't come up with a bi-partisan plan, McCain will single-handedly come up with his own bi-partisan plan.

I see McCain abusing the bully pulpit, in the vain of the current administration, that is, using the malleable media to propangandize the issue. It this really a surprise? McCain has a "base" to satisfy afterall. His "unilateral bipartisanship" will be forcing centrist Repugs or centrist Demos to support his agenda, lest they be pegged > (read "against" or "anti-American") when it comes to the current war (in today's terms), new war, or whatever takes its place in the spotlight.

>>3. Since McCain has now committed to "fixing" the Social Security "problem" without raising taxes, and since the only two ways of getting projected revenues to match projected benefits is to increase revenues or reduce benefits, it follows that McCain is committed to cutting Social Security benefits. And that's before he has to reduce them again to accommodate the diversion of new money into private accounts.

I think it is unlikely McCain's disaster capitalism will prevail here. The typical American's plight will continue to deteriorate, and unless there is a remarkable propaganda campaign, it will become more difficult to peg SS as a "disgrace" that needs reform. Though, I have been surprised before when it comes to things like this.

[mdm]

Carolyn Kay says:

"Obama scares the hell out of me."

You scare the hell out of me.

[anne]

Mark Kleiman:

"Bullsh*t! I wear McCain's b*lls on my keyring!"

Vile thinking, vile writing.

[anne]

"Why so much silence from the Obama campaign on the Social Security issue?"

http://krugman.blogs.nytimes.com/2007/12/03/why-i-get-mad-at-obama-about-social-security/

December 3, 2007

Why I Get Mad at Obama About Social Security
By Paul Krugman

So I just spent a fairly unpleasant 15 minutes on right-wing talk radio. And the host said — this is rough, not a verified quote — "Look, everyone knows that Social Security is going bust, and we'd all be better off if we could put our money in 401(k)s. Even Barack Obama says so!"

[Publius]

I wish I could remember the numbers more precisely, but the fact that SS had 16 workers paying in for each worker being paid out when SS first was created, versus ~4 workers paying in for each worker now, *IS* a cause for concern.

SS is a giant ponzi scheme. Whether it's 40 years or 80 years, the problem will only get worse -- the system itself is untenable.

Even if there *WERE* a SS lockbox (which clearly there isn't), you don't magically put N dollars in a box and have it multiply.

The secret to SS in the past was the same as any Ponzi scheme -- the gov't allowed more and more people to get SS, which meant that there were more and more people to pay into the system in the meantime.

We're running out of people.

SS isn't redistribution to the lower classes. It's redistribution from future generations to the current elderly.

The primary argument against SS alarmism is that the actual crisis might not be tomorrow or the next day, but it might be down the road.

Of course, those same people would never say that justification applied to environmental crises, which are equally, if not moreso, long-term.

(Sigh) I'm about to remove this site from my RSS feeds.

A more intelligent post on social security might say that there are serious structural problems with SS, but that the concept is worth preserving, and that since it will likely be a while before socially security goes bankrupt, we do have an opportunity to transition to a new, structurally-sound social security system, without leaving anyone in the cold.

But no, instead there's writing off the possibility that there's anything but superficial budgeting problems (gross mischaracterization), and eliminating the relatively attractive option of increasing the retirement age by calling it a (drum roll!) benefit cut!!! (ooooooooooh!)

Sigh.

[Sonia]

Social Security does not need any change in the near future but Medicare does and manageing Medicare and Health costs in general will require acceptance that cost effectiveness does matter. Rich societies can spend increasing amounts of income on social income replacement and on other public needs but not if the medical system is allowed to spend ever increasing public amounts on possible tiny increases in life expectancy,

[save_the_rustbelt]

Methinks a dysfunctional primary gave us two mediocre candidates.

Some of my Democrat friends are wistfully wishing Hillary was the nominee.

Hmmmmm.

[wjd123]

I agree with Mark that Obama's silence on this issue makes little sense. I'll set aside my point of view and try a half baked reason for Obama's silence.

Many seniors don't trust Obama. Perhaps he reasons that those seniors who don't trust him and won't vote for him don't need any encouragement to vote. McCain's scare will be believed before Obama's reassurance. Better to remain silent than help McCain to set up a scare game, at least that is, until the polls show the scare is getting traction. For now there is more political hay to be lost than gained by fighting with McCain over this issue.

I don't believe it either, but it's the best I could do on short notice.

[Joe]

The crux of the problem with social security is though, from actuarial basis it appears fine, the trust fund investments (US government securities) will require a substantial increase in taxes when the funds are needed. That is what the representatives (Republicans, Norquist, et al) of the well-off see coming down the road in say 2018. If you think through the whole phenomenon, it is actually quite illuminating about human nature's compulsion to put off for another day.

As an aside, and I know this is major confounding idea, but I recall the movie. "Its a Wonderful life". Despite the shenanigans that went on with MBS's and the current turmoil with GSE's, under a rigorous regulatory regime might it been feasible to undergird social security with mortgages.

I not convinced that this is not still feasible, after the smoke has cleared from our current troubles and the housing market returns to long-run equilibrium.

There are two glitches to that scheme though. One is we would have to raise taxes now to come up with the money to buy MBS's. Two is that the people who move and shake Wall Street, like those historically high return, low risks financial assets. We know whom is at the beck and call of the movers and shakers on Wall Street.

How about a comprehensive solution that not only mitigates future problems with social security but also stabilizes the US housing market? Perhaps we can start working on the problem now instead of facing a insurmountable problem ten years from now when draconian options are all that are available.

[Joe]

I know medicare is also a problem but eating is one thing, while getting medical care is another.

Given the fiscal circumstances of the US, the general question now is whether the rich are going to resist giving their fellow citizens the subsidence to live.

W/o despensing with markets, it is well within our ability to rearrange production and income so everyone could achieve a mutually-agreed level on Maslow's Hierarchy. We substantially accomplished that after the New Deal until sometime in the seventies. We have to get the argument near perfect then as Bush would say "propel the propaganda".

[save_the_rustbelt]

After reviewing the economic news this morning, Obama should be beating McCain like drunk farmer beats a rented mule.

Obama has been given an opportunity few candidates ever get, and what is he doing with it.

Enough of the kiddie crusade, time to get tough.

[Richard H. Serlinr]

"Grover Norquist, speaking as the Grand Inquisitioner of the anti-taxers, more or less replies: 'Bullsh*t! I wear McCain's b*lls on my keyring!'"

Now that's straight-talk!

[bakho]

I would save the SS comments for future debates on the subject. This is where the Obama position on SS will him most. There would be no better comeback to McCains fuzzy privatization talk than to say reassuringly that SS is fine and privatization gave us Fannie Mae. Don't turn SS into Fannie Mae. However, Obama has a nuanced position that will be difficult to explain and difficult to distinguish from McCain.

The other problem on this issue is that our "better press corp" is convinced that SS IS a problem and will attack any candidate or surrogate who flies against their conventional wisdom (as noted by PK).

Obama is going with a turnout strategy. In this strategy, many new voters are registered and a ground organization tracks them and drives them to the polls. We are seeing Obama open 25 offices in Indiana (he visits tomorrow with Sam Nunn and our popular Senator (Bayh @60%). Meanwhile, McCain is counting on tradition and has a single staffer who just this week released his phone number. Obama has high visibility. McCain is nowhere to be seen except infrequent big $$$ fundraisers.

This week, Obama visits the computer security center (CERIAS- Center for Education and Research in Information Assurance and Security) as a counterpoint to John McCain who cannot find the on ramp to the information super highway.

[Bruce Wilder]

str: "Some of my Democrat friends are wistfully wishing Hillary was the nominee.

Some of your "Democrat" friends should get a real friend.

[Ken Houghton]

Far be it for me to defend Obama--I look at a candidate's positions and advisors, and therefore never believed he was more "liberal" or "progressive" than HRC, let alone John Edwards--but it's a question of timing.

Use "SocSec is a disgrace" now, and you get a couple cycles of attention. Use it in October, reminding people, and you get some votes from people who were distracted by other things.

Those (of us?) who would like him to be using it now are people who are desperately looking for a sign that he's not just a Blue Dog who Said the Right Things to get elected from a "liberal" district.

Not to minimize the value of "signalling," but the one thing GWB kept saying in 2004 was that HE wanted to reform SocSec, and it (1) didn't hurt him at all in the general election and (2) came as a "surprise" to many Dems when he actually tried to do it the next year.

[Barkley Rosser]

Publius,

You clearly have not been around here before. These demographic numbers are a phoney scare. Most other high income countries have the ratio, or near it, 2 to 1, that we might have by around 2030. They are all paying their old age pensions fine, with those in Germany more generous than ours now, and they are lending money abroad, not borrowing like we are. Our demographics are much more favorable than theirs. Of all the things to worry about, this is the most ignorant.

anne,

What is it with you and Grover Norquist. Fine, let us stay away from his personal life, but indeed the guy is the most influential pusher of the idea that taxes must always be cut and never raised in the country, and he is indeed the guy who more than anybody else got McCain to change what had been a pretty sensible position on fiscal policy some years ago to drinking the GOP Party Line Kool-Aid nonsense on this.

[Lafayette]

MT: Why so much silence from the Obama campaign on the Social Security issue?

Because they haven't a clue?

What in the primaries, said by Obama, or in his platform, indicated he "had a plan". Other than to change Washington

Uh, excuse me, Mr PotUS Candidate but, uh, aside from Iraq and Israel, don't you think the moment is upon us, uh, to get a bit specific about what matters? I mean, uh, if you've got some time left over in your busy campaign.

[TigerPaw]

Why does Obama have what appear to be strange ideas about SocSec? Americans have this strange idea they have a left-wing party and a right-wing party - they don't.

By the standards of just about every other country on earth they have a right-wing party (Democrats) and a lunatic right-wing fringe fascist party (Republicans).

Is it any wonder Obama says things that might undermine social democratic programs like SocSec?

[robertdfeinman]

The US is in the midst of the biggest economic collapse since 1929 and the chattering classes are talking about everything else under the sun. GM stock price reached a 50 year low yesterday. There are similar things happening with other blue chip firms.

Someone who followed the privatization advice over the past 40 years and put their money into 401K stock funds has now seen their investment nearly wiped out. How much more evidence does one need that only government can provide a real safety net?

Just look at some of the other discussions today: foreign exchange rates, Fannie and Freddie, housing collapse, bank failures - should I go on?

McCain is the dog who finally caught the car. He's been chasing the nomination for decades and finally got it, only he doesn't know what to do next. He has no policy ideas, only dislikes, furthermore in the interim he has gotten old and forgetful. It really isn't a good use of time to discuss him.

Obama is a conundrum: he is a centrist, but progressive idealists see things in him that don't seem to be there. They have two choices they can push him to become more like who they wish he was, or they can accept the fact that we are going to have another Clinton-type centrist administration. The difference this time is that he and his advisers also have no idea what to do about all the simultaneous crises.

You cannot have a society which has behaved foolishly for 60 years and is now reaping what it sowed fix itself over night. I like to refer people to Germany in the 1920's. The economic collapse was forming for years while the government dithered. When 1923 happened there was nothing to be done but suffer.

Apparently Obama isn't bold enough to suggest the kind of radical things needed. Several financial institutions should be nationalized, the dollar should be formally devalued, taxes should be raised on those sectors that can afford it and social services should be quickly ramped up.

Let's see expanded unemployment insurance, national health care for anyone out of work, a new version of the CCC and WPA.

How bad does it have to get before people realize that "capitalism" doesn't work? What you get every time is cronyism, corruption and tax farming, yet the right is now making a big push try to explain that it's not the reality that is the problem but that their fairy tale utopian ideas haven't been given a real chance.

What's to be done? McCain is irrelevant. "What did you do during the collapse of 2009, daddy?"

[LJM]

Doesn't McCain get social security payments? Then there's the big chunk of money he gets in disability payments from the military after his POW years. How much government money should he collect on top of his senate salary? Then there are all those other "old" legislators. Should they draw a salary with a sure pension from those jobs when they leave office, while still drawing SS? Perhaps, since they are paid entirely by taxpayer money, they should be willing to pay more in taxes themselves and give up their benefits, like they want to ask the rest of us to do.

[Robinia]

Tend to agree with Anne on this:

Mark Kleiman:

"Bullsh*t! I wear McCain's b*lls on my keyring!"

Vile thinking, vile writing.

But, it does raise an interesting angle on their perennial "Must fix Social Security" talking point. Perhaps they mean "fix" in that other, veterinary-and-farm-animal sense: remove its balls so it is easier to handle and incapable of reproduction. After all, nothing scarier to a right-winger than a social program that works and has high consumer acceptance-- what if that kind of thing were to replicate! Heavens!

Meanwhile, just can't understand how you can reify the phony SS "crisis" (at most dire prediction a problem decades away) while IndyMac crumbles, Fannie and Freddie teeter, and the stock market is a roller coaster. Um, was there a crisis here somewhere?

[Andrew Biggs]

A couple points:

First, if Social Security is so small a problem, then presumably the benefit cuts required to fix it wouldn't be huge. Yet the language of 'slashing' benefits implies otherwise.

Second, while Sen. Obama has ruled out raising the retirement age or reducing benefits, his proposal would likely fix less than a fifth of the long-term deficit. So maybe the reason he's not focusing too much on Sen. McCain's plans is that he knows he may ultimately have to reduce benefits as well.

Rubber meets road, Social Security is a smaller problem than Medicare but a larger problem than most others, and there's no easy way to fix it.

[Lafayette]

Kaleidescope politics

rdf: Apparently Obama isn't bold enough to suggest the kind of radical things needed.

Presidents don't get elected on the Left in America. They might get elected on the Center Left -- but first they show their Centrists values and then they kinda sorta drift Left. Hoping nobody notices.

So, as much as I, or others, may rant about specifics ... I really do not expect many from BO. That he did not do so in the primary was attributed to "handling smarts", according to which a candidate never, never gets specific in a primary.

I figure he'll keep on with that strategy in the homestretch. He will slalom in between the raindrops trying not to get too wet.

Hey, what if it works .... ?

What would you do? What would I do? Hell, probably not run for PotUS since it means compromising so many personal values, some innate. But, what's a candidate to do in the kaleidescope politics of today's America?

[Bruce Webb]

Publius "I wish I could remember the numbers more precisely, but the fact that SS had 16 workers paying in for each worker being paid out when SS first was created, versus ~4 workers paying in for each worker now, *IS* a cause for concern."

Publius thanks for doing my blog whoring for me. That statistic is bogus and based on a total misunderstanding of the history of Social Security. You might try my recent post at AB Soc Sec XXXI: What is Title 1 and what does it have to do with worker/retiree ratio. Here is a hint, no one was eligible for monthly benefits under the program we currently think of as Social Security (Title 2) until 1942. Prior to that people drew benefits from a general fund welfare plan known as Title 1. In fact the phase in of Title 2 ultimately led to an effective tax cut for general fund taxpayers.

"SS is a giant ponzi scheme. Whether it's 40 years or 80 years, the problem will only get worse -- the system itself is untenable."

Two lies. SS is insurance, workers pay premiums in, survivors and retirees take benefits out. It differs from standard insurance products like life insurance and annuities only because the Full Faith and Credit of the United States (which translates to the power to tax) means Social Security doesn't have to keep the same amount of retained capital but does in fact have a Trust Fund that is now 3 1/2 times the required minimum. Moreover the problem is not getting worse, over the last ten years the outlook for Social Security has steadily improved, having done nothing since 1997 the payroll gap has dropped from 2.23% to 1.7% and the date of Trust Fund depletion pushed back from 2029 to 2041, a rate which if sustained means Social Security will never in fact go broke. If you look at the numbers, which clearly you have not. Why did I call that post 'Soc Sec XXXI'? Because there were thirty posts that preceded it. Try reading a few of them, you might learn something. Social Security Posts on Angry Bear

"A more intelligent post on social security might say that there are serious structural problems with SS, but that the concept is worth preserving, and that since it will likely be a while before socially security goes bankrupt, we do have an opportunity to transition to a new, structurally-sound social security system, without leaving anyone in the cold."

A more intelligent comment might come from a guy that did less sighing and more actual research into the current state of Social Security. Which might lead that theoretical commenter to do less lecturing and more listening to people who might actually know more than stale talking points. But rather than think and read Publius will delete his RSS feed.

Social Security is not broken. Social Security under current projections will STILL pay out a better real benefit after Trust Fund Depletion (if it happens and it well may not) in 2041 than today. Social Security 'crisis' in numeric crisis is no crisis at all, which is why the doomsayers never introduce numbers into evidence.

[Lafayette]

Pert-time retirement

AB: and there's no easy way to fix it.

Maybe. Maybe not.

How about, instead of extending the retirement age to 67, people were let onto retirement benefits at 65, but required to work part-time and pay into the SS? For as long as they felt like working, but at least for another two years (to age 67).

Are there jobs for these people? I figure there are plenty of "lite jobs" they can do. And, those jobs can remain attractive if retirees, working part-time (4 hours a day), are not required to pay, for instance, payroll tax. Or, their income tax is reduced by a certain percentage amount.

And, I'll bet part-time retirement will extend their lifespan. Some studies seem to say so, but nothing conclusive has yet been obtained.

[Bruce Webb]

"The crux of the problem with social security is though, from actuarial basis it appears fine, the trust fund investments (US government securities) will require a substantial increase in taxes when the funds are needed. That is what the representatives (Republicans, Norquist, et al) of the well-off see coming down the road in say 2018."

Joe define "substantial". People use all kinds of alarmist rhetoric about the vast borrowing needs after shortfall (tax income lagging cost) in 2017. But simple thinking would show this is bogus, if revenues were enough to cover cost in 2016 and continue to be collected in 2018 how much gap could actually develop in between? Which might, but generally doesn't, lead inquiring minds to seek out the answer. But to save everyone time I'll give you the link. Table VI.F7.—Operations of the Combined OASI and DI Trust Funds, in Constant 2008 Dollars, Calendar Years 2008-85 [In billions] Adjusted for inflation we will need to come up with $18 billion in borrowing in 2017. By 2020 this figure is up to $77 billion which is to say not even half of the current stimulus package. There is a time between about 2036 and 2041 when borrowing needs for Social security begin to approach current general fund deficit levels but the notion that financing the draw down of the Trust Fund is some earth shattering event can come only if you never actually look at the year by year dollars. Which to repeat is why doomsayers never deliver any hard numbers except bogus PV projections over the (God help us) Infinite Future Horizon..

[Bruce Wilder]

My general view is that the Republican Party has only one policy: redistribute income and wealth from the middle class to executives running giant corporations and obscenely rich folks.

It is why we are fighting in Iraq for Halliburton and Exxon/Mobil. It is why Bush cut taxes and ran huge deficits. It is why Bush, and now McCain, so urgently wants to "save" Social Security. It is why the National Labor Relations Board is hostile to unions. It is why we had the Bankruptcy Bill. It is why we don't have National Health Care, but do have the most expensive health care in world history. It is why we had banking deregulation, followed by a housing bubble and borrowing boom, followed by a banking crisis and a wave of foreclosures, which will wipe out the home equity of about half the home "owners" in the country.

"Reality made me do it" is a favorite rhetorical trick in American politics, aimed squarely at the least informed, swing or "independent" voter. The ignoramus voter does not understand politics, doesn't understand why there is all this partisan bickering all the time, and just wants the good folks in Washington to "solve problems" in Broder-style bipartisanship.

So we get Martha Raddatz of ABC News, a frequent guest on Washington Week in Review, "reporting" from Iraq that Obama's withdrawal plan is not what she wants "may prove difficult". "Instead of any time-based approach to any decision for withdrawal, it's got to be conditions-based, with the starting point being an intelligence analysis of what might be here today, and what might lie ahead in the future. I still think we still have work that remains to be done before I can really answer that question," [Maj. Gen Jeffrey]Hammond said when asked how he would feel about an order to start drawing down two combat brigades a month.

Asked if he considered it dangerous to pull out if the withdrawal is not based on "conditions," Hammond said [from Sadr City], "It's very dangerous. I'll speak for the coalition forces, men and women of character and moral courage; we have a mission, and it's not until the mission is done that I can look my leader in the eye and say, 'Sir, Ma'am, mission accomplished,' and I think it is dangerous to leave anything a little early." See Reality requires that we stay in Iraq a hundred years; "men and women of character and moral courage" say so. Wasn't that subtle?

But, hey, now the Right can "fact-check" Obama on Iraq.

It is the same narrative with Social Security. Tim Russert, NBC Washington Bureau chief and the "Press" in Meet the Press, regularly asserted that Social Security is unsustainable, and, of course, praised the "moral courage" of those straight-talkers, who would address the problem, and make the "hard" decisions.Here's a sample:
If--the facts are simple: When Social Security began, Franklin Roosevelt, genius, he--the life expectancy at that point was 63. He made eligibility for Social Security 65...It was a--was a very popular program. There were 45 workers for every retiree and life expectancy was exactly that age. Now we're approaching two workers for every retiree. Life expectancy is 78 going to 85. You're going to have 80 million people on Social Security and Medicare for about a fourth of their life, for three to 20 years. Everyone knows that, and yet when you present it to Al Gore, he'll say, "No problem. I'll take the surplus and it'll pay for it." Even his own Secretary Treasury written volumes of reports--trustees reports, will say, "No, it doesn't work that way."

In 2005, Russert ambushed Rahm Emmanuel on Social Security with a quote from . . . Bill Clinton Do you suppose Congressman Emmanuel left that encounter muttering "damn that Clinton"? Krugman is an idiot.

The news Media is owned and operated by forces and interests completely hostile to liberalism and the Democratic Party, forces and interests enthusiatically represented by the Republican Party. That's the "reality that compels politicians". The Media -- and I include PBS and NPR and the Associated Press as well as the NY Times and Washington Post, the television networks and cable news nets -- work hard for the causes of Right. They constitute a propaganda machine for the Right and all its causes and interests. They destroyed Al Gore. They swift-boated Kerry. And, Obama runs shy of them. duh.

Personally, I am pretty much over the narcissism of "why doesn't Obama say exactly what I would like him to say . . . he'd be wildly popular!" I hated the way he handled FISA -- hated it, hated it, hated it. But, I can't blame him for the way the Media has insisted that he's flip-flopping on his Iraq policy. To do the kind of Puma tea-reading anne offers is shameful.

On Iraq, Obama, much of the time, is making the case, as Atrios says, that Bush has been a bad Emperor. For those of us, who really would rather that the U.S. was not an Imperial power, that's not comfortable. But, 1.) that's how to appeal to the part of the electorate that's marginal to a Democratic majority -- wishing for a pure peacenik majority is self-delusion (if you really want to change that, it is going to take more than one election cycle, and it will require actually winning this one); 2.) the Media imposes real limits on moving the Overton window within the space of this campaign.

And, regarding how Obama handles Media favorite Son, John McCain, I'd make wider allowances than most commenters, here, for the fact that the Media is a Republican propaganda machine. That John McCain is even talking about Social Security is a gift. And, if I were in the Obama campaign, I would not be in a hurry to shut him up or shut him down on Social Security.

But, beyond the desire to keep McCain in a hole and digging, I really would not assume that the Media is Obama's friend, in any way, shape or form. The Media is more "the enemy" in this campaign than McCain and the Republican Party. The Media control "the facts" and "reality" as it will be perceived by the critical 25% of the electorate, who are not critical consumers of political news and who might change their minds for any number of superficial reasons. Even when the Media lets a negative image through its filter, as in the case of Phil Gramm's "mental recession" -- it will be thoroughly denatured. The Media is not going to tell the American People the truth about who McCain is, who backs McCain, or what McCain's agenda may be. The Media's bosses wouldn't like it. Instead, the Media will tell us about how McCain and Obama are so much alike! It won't matter if Obama is better on fiscal responsibility or the corruption of lobbyist influence, because, by the time the Media is finished, McCain will be the same or better on these issues. And, the Media will make them the same on Social Security, as well, if it comes to that.

[Bruce Webb]

As to Obama.

First of all despite some 'clarification' by advisor Jason Furman over the last week we do not in fact know what Obama's plan is. Andrew Biggs gives it his best shot with Estimating the financing effects of (potential) Obama proposal, but the brackets give the game away, Furman in fact fuzzed up the question so badly that you have to suspect they just want the whole thing to go away.

A second possibility is that Obama is actually listening to another top economics advisor Jeffrey Liebman. Liebman is a former Clinton staffer whose day job now is as a Professor at Harvard's Kennedy School. If you visited his website you might find the Liebman-MacGuineas-Samwick Non-Partisan Social Security Reform Plan known familiarly as LMS. Now some of Obama's statements would seem to rule out straight out adoption of advisor Jeffrey's plan, then again from conversations with co-author Samwick I know that Democrat Liebman ideally would favor a less stringent plan than McCainite MacGuineas and former Bushie Samwick would accept. But just about everything Obama and surrogates have said about Social Security would align with a kind of LMS-Lite. Which is one of the things that worried me about Obama from the start, when I saw the words 'Obama economics advisor Jeffrey Liebman' last fall I went 'eek! Not THAT Jeffrey Liebman!'. But so it proved.

On the odd chance that anyone wonders why I am so opposed to LMS, I put up a post on AB in May called LMS, Solvency and 'Crisis'. It turns up boiling down to how you define 'solvency'. If you define 'solvency' as delivering full benefits to retirees you end up in one place, if you define 'solvency' as meaning 'sustainable solvency' as in not increasing burdens on future taxpayers you end up in another, quite different place. LMS is all about achieving sustainable solvency at the actual expense of wage worker taxes and benefits. It does have a surface plausibility that might attract someone who like Obama is trying to appeal to the center and to independents. Which is why I worry.

[ken melvin]

We've had socialism, communism, terrorism, ... all these bogus bogeymen. Social Security is another to keep us from looking behind the screen at the real, really big, problems. It's not look over here - deniality. We do need to turn the ship of state around but I don't think either candidate has an idea in hell what's going on let alone what to do about it. Rather choosing between a young man and an old man who both want to be president but offer little else rather their case of the wants, we need some one who has a grasp of what's happening - see's the big picture. Energy, resources, economics of this age, ...; neither of these two have a clue.

[ken melvin]

The issues, unfortunately, don't matter. All McCain, or Obama for that matter, needs do is give the voters a reason to vote against the opposition (or not vote at all). McCain can go around telling different audiences different things or do nothing (doing nothing might well be the better choice) and win. The republican party apparatus w/ their 'sources' will supply the negativity required to get people to not vote for Obama.

[ken]

Obama is not going to go to bat for us to save social security. It is not his issue.

Obama is not going to go to bat for us to protect our right to privacy. It is not his issue.

Obama is not going to to bat for us to keep church and state seperate. It is not his issue.

What is his issue? Getting himself elected is his one and only issue. It is the only thing he has ever worked on throughout his political career. He'll do and say anything to get elected. Obama is all about himself.

[Bruce Webb]

Andrew Biggs: "Rubber meets road, Social Security is a smaller problem than Medicare but a larger problem than most others, and there's no easy way to fix it."

Well lets define 'easy'. Under the standard Intermediate Cost projections the current payroll gap (amount needed to raise FICA in 2008 to pay full benefits in 2041) is 1.7% which depending on where you think the real incidence of the employer match falls means a household earning $50,000 in wages (roughly the median) would be paying $425 in extra FICA tax with perhaps another $425 in foregone income (treating the employer match in textbook terms). This works out to $1.16 a day in actual tax for a reasonably placed earner or 33 cents a day for an entry level worker earning $10/hour. Which seems kind of 'easy' to me.

Moreover the cost of that fix has been dropping over time. Now some would argue that that trend of improvement has stalled or rightly point out that the big improvement we saw in 2008 was due to a one time change in immigration assumptions not likely to be matched. Then again the big change in the negative direction in 2006 was mostly due to a one time change in interest assumptions, so that knife can cut both ways. But if for the sake of argument we agree that the SSA's Office of the Chief Actuary is doing its professional best then the actual practical cost of the fix could be paid for by bringing a thermos of coffee to work instead of stopping at the latte stand.

I understand that some people are adverse to tax increases on principle and so would rather chain me to my desk for some extra months or years, me I think $1.16 a day would not shatter my world. (Particularly since that amount is based on what look to me to be some fairly pessimistic economic assumptions.)

[Dickeylee]

Ken, they might not have a clue now, but I'm willing to bet that Obama has the capacity to grasp the facts and learn on the run. Mccain, not a chance. he graduated in the bottom 1% of his Annapoilis class, and has admitted to not understanding economics, and he's right up there with Sen Stevens in not having a clue as to those internet "tubes".

[rdan]

How come the word 'idiot' isn't used over here?

[pgl]

"The crux of the problem with social security is though, from actuarial basis it appears fine, the trust fund investments (US government securities) will require a substantial increase in taxes when the funds are needed. That is what the representatives (Republicans, Norquist, et al) of the well-off see coming down the road in say 2018."

Joe sees this through there is no SSTF reserve prism as if all those payroll taxes I've been paying for 25 years are to make up for the Reagan and/or Bush43 tax cuts sine spending cuts. In Joe's world, we have only unified deficits and not a separate accounting for the General Fund fiasco v. the Social Security surpluses. Thank goodness we have Bruce Webb who does not see the accounting in such a batshit insane way!

[pgl]

"How come the word 'idiot' isn't used over here?" asks my Angrybear colleague rdan. Well, it is simple. When FA who does use the word to describe anything left of Antilla the Hun decides to attack the integrity of Mark Thoma, FA decides to attack Mark not at his place but at our place. Of course, FA's attacks are based on FA's two favorite tendencies: (a) dishonesty, and (b) cowardice. Alas, we Angrybears tolerate the abuse of our blog by rightwing trolls who wish to attack folks like Mark, which IMHO is a disservice to excellent bloggers like Mark. Maybe we should give the rest of the blogging community the right to police our comment box and delete such offensive comments at will!

[Joe]

Mr. Webb:

My humble apologies. You are correct and anyone who desires a better understanding of the issue should go to the link you provided.

Forgive my carelessness.

By all means, let's make sure we have our facts straight. The better to ward off the ostensible arguements of the our opponents.

Joe

[evagrius]

Social Security is considered to be in crisis because it hasn't been eliminated.

Once it's eliminated, crisis solved.

[CJM]

Obama will certainly exploit this disastrous box McCain has put himself in, especially as a way to erode McCain's advantage with high turnout seniors. But the campaign doesn't want to muddy his main focus this week on foreign policy.

However, via Ed Kilgore, the LA Times is reporting that the coalition that defeated Bush's feeble SS "reform" attempts is getting back together to raise a ruckus on McCain's double-talk "bipartisan policy". It makes sense to have a division of labor between campaign and grassroots. Have the grassroots stir up the heat so it's an issue that will continue to have legs regardless of what the candidate's message-of-the-day is. Then have the candidate take advantage of the attacks when the time is ripe (convention week and debates especially).

[Joe]

pgl

When the government securities in the trust fund mature, the general fund must pay the face value or they must be rolled over.

That's some pretty non-batshit crazy accounting.

Apparently based on Mr. Webb's excellent contribution, the trust fund could roll them over for some time while the general fund continues interest payments (from general revenues, i.e. income taxes ect.) on the face value.

I don't think I'm bat shit crazy, apparently I was just a little ignorant. Not to worry, Mr. Webb straighten me out.

Joe

[kthomas]

No mention of the generational gap here. You baby bommers sure did mess things up. Seems to me you learned nothing from your Greatest Generation parents.

[Joe]

PGL

When the government securities in the trust fund mature, general revenues (i.e. income taxes) must be used to pay off the face value or they can be rolled over while general revenues continue to pay interest on the principle.

That's some non-batshit crazy accounting.

Mr. Webb's excellent contribution makes it evident that the securities can be rolled over for some decades.

I'm not batshit crazy but just a little ignorant. Not to worry Mr. Webb straighten me out.

Joe

[Cynthia]

It's very disturbing to me that a nontrivial number of our political leaders are focused on fixing Social Security when there are much bigger and more pressing problems that need fixing -- namely our shaky banking system, our bloated healthcare system, our ill-conceived Middle East policy and our antiquated energy policy. This reminds me of a physician who chooses to focus on fixing a patient's broken leg when his respiratory, cardiovascular and neurological systems are all going down the tubes.

[Icarus]

KThomas,

That's because that self-inflicted "greatest generation" is complete hogwash. That generation doesn't deserve any special accolade, and frankly, they have to get over themselves. And, we need to move into the 21st century.

Social Security needs to be reframed (before being eventually eliminated) to be considered supplemental retirement income only.
People need to learn to save, invest, and prepare for the economic realities...and not rely on the central govt to manage that.

As well, we need significant reform with medicare/aid. These programs need to be reformed, as they don't pay for the services they provide, and further incentivize physicians to turn away patients.

[robertdfeinman]

The trolls just keep coming back. How do they live? Do they not read the papers, but just have some sort of RSS feed that scans for certain keywords and then pop in to repeat their same talking points?

From the lastest (above):
People need to learn to save, invest, and prepare for the economic realities...and not rely on the central govt to manage that.

This, while the stockmarket is undergoing a massive meltdown, while blue chip stocks are selling at 50 years lows and while (formerly) respectable banks are being reorganized.

Exactly what are the "people" supposed to invest in? General Motors at $10 per share? And where are the "people" supposed to get this excess income to use as investment? The middle class hasn't seen any real increase in income for decades, while their cost of living has gone up.

I guess looking at the data, which has been presented here and elsewhere time and again, is just too boring for our slash and dash expert.

This is the tragedy of this moment, there are still too many people who remain clueless. There is a discussion going on at TPMcafe about a new book by a couple of rightwing apologists. They are in the forefront of the latest effort to deny history. "It wasn't the libertarian, free market, greed is good policies that we trumpeted that have led us to this state, it was just poor implementation by the GOP."

This joins the growing list of books by the architects of the Iraq disaster who also claim they had nothing to do with the present situation. It shows that bullies are cowards after all. They run and hide when it comes time to take responsibility for your actions. Pathetic.

[Movie Guy]

It is interesting that the news media and bloggers haven't forced nor encouraged either Presidential candidates to turn their attention and commentary to the more difficult issues facing the United States and the world.

Social Security is so far down the list of pressing issues that it's humorous to see it on the blogs or flowing from the lips of either candidate.

This, of course, illustrates why the U.S. economy is in its current state.

This is what happens when the news media, bloggers, and others let the candidates control the "presidential" discussions.

Screw the chatter about Social Security. Screw a whole lot of the "presidential" focus and drag them over to the hot issues that Ben Bernanke addressed in his testimony today.

If either one of these guys is supposed to end up serving as one of the leaders of the free world, then the presentation on key issues of global concern must be addressed at length. Otherwise, you might as well just elect a teenager to run the country.

Come on. Force these bastards to deal with the heat. Bernanke's heat. That's where the rubber meets the road.

The economic problems of the U.S. may take down the global economy. What is their grand plan for fixing that?

[kthomas]

bravo, rdf. bravo.

[Publius]

Bruce,

Thanks for your reply. First, let me apologize for my tone. Your point that my understanding lacks a current statistical foundation is well-taken, but that doesn’t make the logic of Msr. Thoma and yourself any less shoddy. I am willing to be convinced, but your points fail to do the job. I am fully willing to add RSS feeds that present strong counter-arguments to my de facto positions, in fact I embrace them (e.g., Dani Rodrik), but shallow politically-motivated posts drive me mad (I speak less of you, than Msr. Thoma).

Back to the show:
“…Prior to that people drew benefits from a general fund welfare plan known as Title 1. In fact the phase in of Title 2 ultimately led to an effective tax cut for general fund taxpayers.”

This is misdirection. I read your post, it is correct in stating that Title 2 was fundamentally different than Title 1. But the argument that this transition is what is responsible for the taxpayer-beneficiary ratio is no more than speculation. What is not speculation is that the government expanded the number of people eligible for SS as the years went by, which means that the taxpayer burden grew as well.

I call it a ponzi scheme, you say “SS is insurance, workers pay premiums in, survivors and retirees take benefits out.” If you have taxed the Boomers an average of N% for their parents’ SS benefits, and then tax a later generation N+X to pay for the boomers’ benefits, and then the next generation N+X+Y for the previous generation’s benefits, what does that look like to you? The only way you stave off this cycle is by adding more new taxpayers than beneficiaries, which would be an unsustainable demographic shift.

If you’re arguing that Social Security works because enough people die before they take out benefits that you can therefore subsidize the living of the survivors, I think you are grossly misrepresenting the system; if you aren’t, then it’s not insurance. It’s a low-yield savings account that is subsidized by tax revenue, either by expanding the number of taxpayers or raising the taxes. The earlier you came to the party, the richer your benefits and the lower the price you pay. The later you come to the party, the poorer your benefits and the higher price you pay.

But it’s not a ponzi scheme.

“Moreover the problem is not getting worse, over the last ten years the outlook for Social Security has steadily improved, having done nothing since 1997 the payroll gap has dropped from 2.23% to 1.7% and the date of Trust Fund depletion pushed back from 2029 to 2041, a rate which if sustained means Social Security will never in fact go broke.”
I would love to read all of your posts on everything, but I’m afraid you’ll have to be a little more demonstrative within the posts if I’m too be tempted. The logic: A=true, b=true, so C must = true, doesn’t work … You’ve got a bit of logical disconnect, but given your familiarity with the numbers (I’ll be honest, I haven’t read a Social Security book since college, though I studied it quite a bit at the time), I’ll allow the possibility of C=true, but alas, won’t take your word for it.

“Social Security is not broken. Social Security under current projections will STILL pay out a better real benefit after Trust Fund Depletion (if it happens and it well may not) in 2041 than today.”

Just to make sure we’re on the same page. If someone were to lay out the following bet, would you take it?
In 2041, the US will be able to pay out the same SS benefits to each person who qualifies as beneficiary (in real dollars), without reaching deeper into taxpayer pockets than the current rate?

If you respond to this post at all, I do hope you respond to this final question.

[Publius]

Let me be a bit more specific:

In 2041, the US will be able to pay out the same SS benefits to each person who qualifies as beneficiary (in real dollars) as they did in 2000, without reaching deeper into taxpayer pockets than the current rate?

[anne]

"Bullsh*t! I wear McCain's b*lls on my keyring!"

"What is it with you and Grover Norquist?"

Vile sexist thinking, vile sexist writing. Get it?

[ken melvin]

Thanks rdf. The simple world of the simple assed minded never existed outside the very small societies and their small minds. Large, complicated societies are simply beyond their ken. And, yes I suppose 'twould be nice if they admitted the harm done by their dogma these past few but, of course, that's not gonna happen given their limited ability to understand complex matters. What better example of appealing to the limited than the likes of Grover with his about getting rid of public education, social security, ..., fannie and freddie, ... these things most essential large complex societies?

[anne]

http://www.eurekalert.org/pub_releases/2008-07/hsop-pmt071408.php

July 15, 2008

Poll: More Than 2/3 of Massachusetts Residents Support Health Reform Law

BOSTON, MA ― Two years after the implementation of a health care reform law aimed at providing health coverage for nearly all Massachusetts residents, public support for the law remains high. According to a new poll by the Harvard School of Public Health and the Blue Cross Blue Shield of Massachusetts Foundation, over two-thirds (69%) of Massachusetts residents support the law. Just over one in five (22%) oppose the law and approximately one in ten (9%) say they do not know enough about it to give an opinion. Since the law's passage in 2006, public support has increased slightly (69% in 2008 compared to 67% in 2007 and 61% in 2006). The poll was conducted June 10-23, 2008.

Other signs of public support for the law include the following:

* 77% support providing subsidized coverage
* 58% support requiring individuals to have insurance
* 71% say the law has been successful at reducing the number of uninsured in Massachusetts

"The poll was taken during a time of much public discussion by legislators and policymakers about the high costs of the plan due to greater-than-expected enrollment numbers," said Jarrett T. Barrios, president of the Blue Cross Blue Cross Blue Shield of Massachusetts Foundation. "We think this shows the public's strong support for the law."

In the two years since the law's passage, approximately 350,000 Massachusetts residents have gained health insurance coverage.

A key component of the law is a mandate requiring all Massachusetts residents to have health insurance or pay a fine. A majority of the public support this individual mandate (58%) while slightly over one-third oppose it (35%). Support for the mandate has also increased slightly since the law was passed (58% in 2008 compared to 57% in 2007 and 52% in 2006).

The law requires businesses that employ more than 10 people to provide health insurance for their employees or pay a fine of up to $295 per employee per year. The public is highly supportive of this provision with three out of four expressing support (75%) and one in five opposition (21%). Support for this business requirement has also risen slightly since 2006 (75% support in 2008 compared to 70% in 2006).

Another key component of the law is providing free or subsidized coverage for Massachusetts residents whose incomes fall below 300% of the Federal Poverty Level ($63,600 for a family of four or $31,200 for an individual). Over three-quarters (77%) of the public support this subsidized insurance program while 18% oppose it....

[Bruce Webb]

Joe no apologies needed. In fact I get a little more curt than necessary sometimes and probably should do more apologizing of my own.

Under intermediate cost assumptions the entirety of the Trust Fund rolls over until 2023 and then only starts getting tapped in a small way. There is a real though manageable financial burden in the years from about 2035 to 2040, but in constant dollars never approaching the 2008 projection.

More interesting to me is Low Cost. Under the Low Cost alternative the Trust Fund rolls over indefinitely and only partial paydowns on interest need to be made. You can see the result in Table VI.F7 for constant dollars, but if you want some real eyeopening numbers check out it in current dollars in VI.F8. You can see this is visible form along with some discussions of what Low Cost would mean if and when in my Soc Sec II: The Shape of Low Cost. Low Cost outcomes are by no means guaranteed, though I don't see them as being as unlikely as some others do, but should they happen they would land us in a whole different world on matters that extend beyond Social Security to things like the long bond, current account deficits, and the affordability of tax cuts.

The net effect of Low Cost would be to discount interest on the Trust Fund by about 75% and/or simply allow us to right off most of that debt as simply not being needed to meet Social Security payments. Which would no doubt seem unjust to some but could be justified based on some time shift considerations. If everyone who paid in the extra principal between 1983 and 2023 (when Low Cost starts requiring interest transfers) ends up getting full benefits there is not a lot of inequity involved by simply abrogating unneed Trust Fund debt/assets after say 2055. Either way I don't suspect it will be my problem.

[anne]

http://www.pnhp.org/news/2008/july/national_health_insu.php

July 15, 2008

National Health Insurance: Could It Work in the US?
By James E. Dalen and Joseph S. Alpert - American Journal of Medicine

The US health care system, which depends on private, for-profit health insurance, is not working. It is time for national health insurance!1,2

One would expect that the US, with its well educated population; high standard of living; well trained physicians, nurses, and other health professionals; and well equipped hospitals and diagnostic facilities would provide optimalcare to all its citizens.

A further reason why Americans should expect optimal health care is that the US spends much more for health care than any other country. We pay about twice as much as other countries. In 2005, the per capita health care expense was $6401 for Americans, compared to an average of $3114 in 30 industrial nations in the Organization for Economic Co-operation and Development.3 And, our health care costs keep escalating faster than the rate of inflation.4

We pay more; but we get less for our money! We do not have the world's best health care. The World Health Organization ranked the US health care system the 37th best of 191 countries, and last among 17 industrialized countries in 2000.5 Our health outcomes: life expectancy, infant mortality, and immunization rates are well behind other industrialized nations.3 In a 2000 survey, 60% of our citizens said that they were dissatisfied with their health care.5

The major reason that our health outcomes are poor is that more than 46 million Americans have limited access to care because they don't have health insurance.6 Millions of others have inadequate access because they have inadequate insurance. A New York Times/CBS poll in 2007 found that 28% of Americans were without health insurance at some time in 2007, and 61% who were uninsured did not obtain needed care.7

Even though we spend more on health care than any other country, we are the only industrialized country that does not ensure access to health care to all its citizens. The primary source of health insurance in the US is employment-based private (for-profit) insurance which covers 61% of the non-elderly population.6 However, the number covered by employment-based insurance is decreasing8 because some employers, especially small employers, can not afford to provide insurance. The cost of health insurance continues to exceed the rate of inflation. From 2002 until 2007 the cost increased by 78% while the inflation rate increased by 17%.9 As the cost increases some employers stop providing health insurance, or provide insurance with fewer benefits and higher co-pays. Others shift a larger percent of the premium to their employees forcing some employees to drop their health insurance.

More than half of the uninsured are employed, or the dependents of employed persons.6 They lack insurance because their employer doesn't provide it, and they can't afford private health insurance. Private health insurance for a family can cost more than $12,000 per year.8 For many older Americans, and for those with "prior conditions" (ie, any known health problem!), the cost of insurance, if it is available, can be out of reach.

Given the high cost of health care, very, very few Americans can afford to pay for health care out of pocket. As a result, Americans without health insurance receive less primary and preventive care and have poorer health outcomes. The bottom line is that the mortality rate for the uninsured is higher than for the insured.10

Our fragmented system of health care, with thousands of health insurance providers, has enormous administrative costs, and for some providers, enormous profits. Only about two-thirds of private health insurance premiums are spent on health care; the rest goes to administrative costs, costs of billing, and profits for the insurance company.11 The overhead in our health care system is more than twice that of countries with a single payer. Administrative costs account for 31% of all health care expenditures in the US, but only 17% in Canada's single payer health care system.12

In addition, we pay more than twice what other countries do for prescription drugs,13 because, unlike most of the rest of the world, we have no controls on the price of prescription drugs. The Medicare Modernization Act legislation forbids Medicare from negotiating prices with drug companies.14 Many Americans with chronic conditions can't afford the prescription drugs that can prevent strokes and heart attacks and other conditions leading to death or hospitalization. Multiple studies have shown that many Americans fail to fill or renew prescriptions, or take fewer doses than prescribed because of the costs.15,16

The combination of the excess administrative costs, excess profits, and the excess cost of prescription drugs in the US health care system greatly exceeds what it would cost to provide health care to all uninsured Americans.17 We can decrease health care costs and provide health care to all Americans by adopting mandatory national, non-profit health insurance. The insurance could be financed by a payroll tax shared by the employee and the employer. Premiums would be community-based; that is, they would not be dependent on age or medical history. Patients would have free choice of physicians who would be paid fee-for-service, and have free choice of hospitals and other health care providers....

[Icarus]

Silly Robertdfeinman,

You mistake personal responsibility with right wing rants, and that's essentially why the redistributionist ethic you and your cohorts incessantly expouse is less and less arresting...

Even Obama is moving right...Is he now a troll? Do you have anything more than silly aspersions?

Banking suffers, Auto suffers, Airline suffers, Construction suffers...no doubt. And, a well designed portfolio of diversified investments could/would/should account for that.

And, we must measure such investments over time...not just in a 3 year period.

And, to answer your question about middle class savings...we need to instill an ethic of restraint. Each child costs $150-200k over a lifetime. Have 1 less, and use that money to save/invest/retire.
Also, profligate consumption must stop...People spend too much on Xmas, on eating out, on clothes which are unnecessary, etc, etc. They must live with less, and save accordingly, despite the ploys of advertisers.

Yes, the economy will change based on the hopeful prudence of the 'middle classes'...that's a good thing.

RDF...you can blame everyone else for the problems of the US middle class. You can...and will. As will others on this blog.
But, the bottom line is that the argument is old, tired, and unconvincing. There are just too many people who'll succeed in the US, from various class segments...proof that it is a desireable place to live, and that the whiners are committed to their own pathetic indolence and imprudence.

The Trolls are winning.

[Bruce Webb]

Publius first let me note that you cite no source for that 16 to 1 factoid. It is used rather widely to suggest demographic shifts that in fact really didn't happen or at best it ignores lag effects.

Under Title 2 it required five years to get vested after which one birth year of workers is eligible for retirement. The ratio at that point will be quite high, given a 44 year worklife you would expect the initial ratio to be about 44 to 1. That rate will drop by half in the second year to 44 to 2 or 21 to 1, in the third year the ratio would drop to 44 to 3 or about 15 to one. That ratio will continue to drop even if no demographic changes happen at all until everyone in retirement age is covered by the system something you would expect would have been largely completed by the early to mid fifties. If you care to explore this further all Social Security Reports back to 1942 (when monthly benefits started) are available at http://www.ssa.gov/history/reports/trust/trustreports.html (in fact they recently added 1941).
The following table only goes back to 1950 Table V.A2.—Social Security Area Population as of July 1 and Dependency Ratios, Calendar Years 1950-2085 but clearly shows that the ratio had largely stabilized by 1960 (2nd column from right).

There are projected changes in the ratio due to changes in mortality, but in point of fact Boomers are offset almost 1 to 1 by Millenials who are entering the work force as we speak.

[Nick]

Why is it that people are still hoping the Obama campaign will make some solid statement about something? His campaign has perfected the art of saying nothing of substance and leaving all decisions to whatever is the most politically palatable at the absolute latest time the decision needs to be made. Making any statement agreeing with or challenging anyone else's ideas in anything more than an abstract undefined manner would commit himself to a course or specific plan of action, something he has skillfully avoided thus far.

I have full confidence he will be able to carry his non-committal, vague, undefined rhetoric platform through the November elections. This will make the election, once again, a choice between the evil you know (McCain/Bush) and the evil you know nothing specific about (Obama/Kerry). It worked well for Bill Clinton though, so there's some precedent for success. I guess we'll see in November if the populace dislikes McCain's policies enough to elect a complete unknown to the most powerful position in the world.

[save_the_rustbelt]

"People need to learn to save, invest, and prepare for the economic realities...and not rely on the central govt to manage that."

There is nothing wrong with this, and actually we need some more personal responsibility, AS LONG AS we remember that there are some people, through no fault of their own, who fall behind. Also, children cannot be responsible adults because they are not yet adults.

I would never want to leave my fate in the hands of the government, short of some immense catastrophe at which time all of the normal rules no longer work.

[Fred]

If Obama is a true politician, meaning someone with a swollen ego, towering ambition, few to no personal convictions, who will say anything to get elected and then do anything to get re-elected, then that is a HUGE improvement over the ideologues we have in power now. Someone who will do what it takes to get re-elected IS NOT going to start wars that can't be won, IS NOT going to allow the economy to be wrecked by crooked financial operators, IS going to do what it takes to keep unemployment down, IS going to do what it takes to deal with our busted health care system. I'll take intelligent amorality any day over stupid fanaticism.

[robertdfeinman]

I don't usually debate with trolls, especially (as usual) their first step is to start with personal insults, but...

If the "trolls" win you will be the first to suffer. You are not part of the ruling class. You are just a poor working stiff, with, I imagine, few assets that can be shielded from economic collapse.

In addition, statistically speaking, you will get old and sick at some point in your life. I guarantee that your modest assets (that you so carefully save for) will not cover your costs. One round of cancer chemo-therapy costs about $100K these days. Several months in a hospital can run to five times this. Will your "savings" cover this?

You are fool, but you won't realize it until it's too late at which point all of us bleeding heart liberals will pay for your care anyway.

[Icarus]

Actually Robertdfeinman,

I'm not a working stiff...the planning I speak of allows me to move past the predictable problems you've outlined.

And, it's quite sad that you despise insults, but begin with calling someone with an opposing viewpoint a "troll". Are you not aware of your own childishness?

So...to cover things...my assets will be more than modest, and, I will take reasonable care to prevent anything catostrophic.

But, that said...there is always risk in life...and, we all die somehow.

If I had a choice to extend my life for a few months, and spend all my savings (to the detriment of my family), or, die gracefully from whatever malady...I would chose the later. I don't think we should spend countless dollars at the very end of life. People die...it's just nature. Whether cancer, old age, heart failures, etc...there is a point where the cost has to be considered. Tough choices, no doubt...but, having Terry Shiavo situations is reprehensible.

[Icarus]

And RDF...

One round of Chemo doesn't necessarily cost $100k...

And, like a responsible adult, if you have insurance, it's not cost prohibative.

[2slugbaits]

Mark Thoma asked,

"Then here's the question. Why hasn't the Obama campaign opened their Christmas gifts and made use of them? Why haven't they gone after McCain's "disgrace" remark regarding Social Security?,

Well, one reason might be that it's not Christmas. By that I mean it's not good political strategy to get your message lost with scattershot attacks. It's clear that over the next two weeks the Obama campaign has decided to focus on Iraq and Afghanistan as part of his upcoming visit to the region next week. I would just let McCain continue talking nonsense about Social Security. When a candidate is digging himself into a hole the best thing to do is hand him a sharper shovel. If Obama starts attacking McCain's position this far away from the election then it gives McCain an opportunity to look like he's the only candidate with a plan to fix Social Security. Nevermind that Social Security doesn't need fixing, the political fact is that a lot of voters think it needs to be fixed. Obama doesn't want to be put in the position of having to defend a "do nothing" approach to Social Security even if that is the right policy choice. The best thing to do is to keep the tape of McCain's comments on cutting Social Security benefits and then role it out mid-October. Then the issue looks like McCain wanting to gut Social Security rather than looking like the hardnosed realist who wants to fix the long term problem.

[anne]

http://www.nytimes.com/2007/11/16/opinion/16krugman.html?ref=opinion&pagewanted=print

November 16, 2007

Played for a Sucker
PAUL KRUGMAN

Lately, Barack Obama has been saying that major action is needed to avert what he keeps calling a "crisis" in Social Security — most recently in an interview with The National Journal. Progressives who fought hard and successfully against the Bush administration's attempt to panic America into privatizing the New Deal's crown jewel are outraged, and rightly so.

But Mr. Obama's Social Security mistake was, in fact, exactly what you'd expect from a candidate who promises to transcend partisanship in an age when that's neither possible nor desirable.

To understand the nature of Mr. Obama's mistake, you need to know something about the special role of Social Security in American political discourse.

Inside the Beltway, doomsaying about Social Security — declaring that the program as we know it can't survive the onslaught of retiring baby boomers — is regarded as a sort of badge of seriousness, a way of showing how statesmanlike and tough-minded you are.

Consider, for example, this exchange about Social Security between Chris Matthews of MSNBC and Tim Russert of NBC, on a recent edition of Mr. Matthews's program "Hardball."

Mr. Russert: "Everyone knows Social Security, as it's constructed, is not going to be in the same place it's going to be for the next generation, Democrats, Republicans, liberals, conservatives."

Mr. Matthews: "It's a bad Ponzi scheme, at this point."

Mr. Russert: "Yes."

But the "everyone" who knows that Social Security is doomed doesn't include anyone who actually understands the numbers. In fact, the whole Beltway obsession with the fiscal burden of an aging population is misguided.

As Peter Orszag, the director of the Congressional Budget Office, put it in a recent article co-authored with senior analyst Philip Ellis: "The long-term fiscal condition of the United States has been largely misdiagnosed. Despite all the attention paid to demographic challenges, such as the coming retirement of the baby-boom generation, our country's financial health will in fact be determined primarily by the growth rate of per capita health care costs." ...

[anne]

"It's clear that over the next two weeks the Obama campaign has decided to focus on Iraq and Afghanistan as part of his upcoming visit to the region next week."

http://www.nytimes.com/2008/07/14/opinion/14obama.html?ref=opinion&pagewanted=print

July 14, 2008

My Plan for Iraq
By BARACK OBAMA

Chicago

"As president, I would pursue a new strategy, and begin by providing at least two additional combat brigades to support our effort in Afghanistan. We need more troops, more helicopters, better intelligence-gathering and more nonmilitary assistance to accomplish the mission there."

More, more, better, more. I'm like all, "hooray."

[Bruce Webb]

What is not speculation is that the government expanded the number of people eligible for SS as the years went by, which means that the taxpayer burden grew as well.
Well you could quantify that. The biggest addition would have seem to come with the addition of survivors which would have increased the burden, but also cut down on societal expense to house and feed orphans, so probably about a wash. Other people added don't change the relative burden, the system is after all Pay/Go, their future benefits offset by their current contributions. Plus you missed the significance of Title 1. As time goes on recipients of Title 1 would in turn pass away and so decreasing the taxpayer burden.

By the way all of your assertions could use some links. Because while I can see where some of your points are coming from, some just seem pulled out of the air.
If you’re arguing that Social Security works because enough people die before they take out benefits that you can therefore subsidize the living of the survivors, I think you are grossly misrepresenting the system; if you aren’t, then it’s not insurance. It’s a low-yield savings account that is subsidized by tax revenue, either by expanding the number of taxpayers or raising the taxes. The earlier you came to the party, the richer your benefits and the lower the price you pay. The later you come to the party, the poorer your benefits and the higher price you pay. Well if I was arguing that I probably would have said it. First the fact that some people pay insurance and never collect is just a feature of most insurance plans, if you want to call that a 'subsidy' fine.

Second people tend to want to work from very narrow definitions of insurance when it comes to denying that Social Security is in fact insurance. Social Security is in fact two insurance plans. One Old Age/Survivors is a blended plan that starts as a straight out insurance against a worker dying leaving survivors (mostly limited to minor children) and then converts to an inflation protected annuity. I think that most people would think the claim that annuities are not insurance to be odd or at best technical hairsplitting. Certainly annuities and cash value insurance are considered at least insurance produts. As for DI that is a straight out insurance plan that terminates at full retirement age at which point recipients get shifted to OAS. You could duplicate the effects of either OAS or DI via plans available from an insurance broker, its insurance because it functions as insurance.

As to your party analogy you got it exactly backwards. Because initial benefits adjust with real wages late comers actually get a better deal over time. For example the current scheduled benefit for 2041 is 60% better in real terms than the one a similarly situated beneficiary gets today. If benefits have to be cut to 78% in that year to match current revenue you still end up with the equation 78% of 160% = 125%. 'Crisis' in context meaning Gen-X getting a 25% better check than my mom does today. Well cry me a river, this whole notion that Boomers have screwed over younger workers is deliberate propaganda. People who repeat 'Ponzi' are themselves the victims of a fraud scheme. Basically you have been played on this one. When you reduce it to numbers it all falls apart. Which is why doomsayers rarely resort to numbers.
I would love to read all of your posts on everything, but I’m afraid you’ll have to be a little more demonstrative within the posts if I’m too be tempted. For a guy that can't be bothered to document your own claims you seem oddly picky here. And I can't address your A, B, C argument unless you tell me specifically what you think each of them are. If you have questions about my conclusions or methods lay them out. Simply asserting that there is a 'logical disconnect' means nothing to me, as far as I can see you are just a screen name who has no natural call on me to defer to your authority on logic or for that matter anything else.

In 2041, the US will be able to pay out the same SS benefits to each person who qualifies as beneficiary (in real dollars), without reaching deeper into taxpayer pockets than the current rate? (First of all I rarely abandon a Social Security thread until the last dog dies, if anyone has a question generally I'll get around to it. If not repost it on whatever the most recent of my AB series (currently Soc Sec XXXIII) or at my website (bruceweb.blogspot.com) and I'll get right back to you.)

This question as stated doesn't make sense. Everyone who collects benefits in any future year will get the same percentage of scheduled benefits as then current revenue and claims on the Treasury allow. So in that sense I would happily take that bet, that is mostly a matter of mechanics. Now conceivably benefits would fall to levels where the poorest workers needed to be subsidized, but given the 78% of 160% = 125% equation I don't see much risk of having to rebalance benefits or any inherent need to go back to the taxpayer. And if we did have to the money required is not that significant at 1.7% of payroll now or 3.54% of payroll in 2041 if the taxpayer concerned was limited to wage workers, much less if spread across the entire pool of income and taxpayers, which I think is what your question implies.

Your mental model seems to have built in a tsunami, where the reality is that we just have a slightly tricky wave to ride. We can do nothing and even with the pretty pessimistic numbers baked into Intermediate Cost assumptions still pay out a better real benefit than today. We got kids without insurance today who will be those same retirees of 2041. Worrying about contingent events that are fairly unlikely to happen while ignoring the here and now is kind of ridiculous and mostly serves to cover an ideological hostility to Social Security. Because certainly the case has not been made numerically, though I welcome efforts to try. Heck give me a good enough scheme and we can probably front page it at AB (I'll have to run anything submitted by the site manager, but he is pretty open).

[anne]

http://www.nytimes.com/2008/07/16/us/politics/15cnd-obama.html?hp=&pagewanted=print

July 15, 2008

And he has spoken of reducing American combat forces in Iraq and adding as many as 10,000 more troops to battle al Qaeda and the Taliban in Afghanistan and Pakistan....

Pakistan population 164.7 million
Afghanistan population 31.9 million
Iraq population 27.5
Iran population 65.4

More, more, better, more. I'm like all, "hooray."

[robertdfeinman]

Even better than the duped working stiff troll is the "I've got mine and the hell with everyone else" type.

Congratulations, you win the self-centered egotist prize for the day. Don't be so sure that you will be able to pay for you health care. Insurance companies cancel coverage and deny treatments that they don't wish to pay for.

That's why government-administered universal services are preferable. If they are done right there is no gaming the system. Perhaps you should watch a couple of those movies where some guy of privilege is forced to find out how the other half lives. I think Eddie Murphy was in one of them.

Or you could go back to the Prince and the Pauper.

Shame on you.

[anne]

http://www.pnhp.org/news/2008/april/physician_opinion_ti.php

March 31, 2008

Physician Opinion Tips in Favor of National Health Insurance
By Charles Bankhead

INDIANAPOLIS — A majority of U.S. physicians support national health insurance, according to findings from a nationwide survey.

Almost 60% of 2,200 physicians surveyed said they favor government legislation to establish a national health insurance plan, Aaron Carroll, M.D., and Ronald Ackermann, M.D., of Indiana University, said in a letter published in the April 1 issue of Annals of Internal Medicine.

The results represented a 10-point swing in physician opinion since a similar survey was conducted in 2002 and seem to leave practicing physicians and organized medicine staring at each other across a wide philosophical chasm.

In the 2002 survey, 49% of respondents favored national health insurance. Given that the U.S. has about 800,000 physicians, the 10-point swing means that 80,000 physicians have changed their minds about national health insurance in the past five to six years.

The American Medical Association, the largest body in organized medicine, has traditionally battled the concept of a government-run national health insurance plan.

In a statement, Edward Langston, M.D., who chairs the AMA's board of trustees, noted that the Indiana survey does not define national health insurance.

Also, he cited an AMA proposal to expand coverage and choice through tax credits that would provide the most money to those who need it most: lower-income Americans. Our plan gives individuals choices so they can select the appropriate coverage for themselves and their families, and it promotes fair rules that include protections for high-risk patients and greater individual responsibility.

"This AMA proposal for covering the uninsured builds on what's great in our system — world-class medical innovations and research, and doctors dedicated to the health of their patients," said Dr. Langston.

"Many claim to speak for physicians and represent their views," said Dr. Carroll. "We asked doctors directly and found that, contrary to conventional wisdom, most doctors support national health insurance."

The findings came from a random sample of 5,000 physicians from the AMA Masterfile. The survey instrument consisted of two questions:

* In principle, do you support or oppose government legislation to establish national health insurance?

* Do you support achieving universal coverage through more incremental reform?

For both items, respondents could express their support or opposition on a five-point scale.

The survey also elicited information about membership in physician organizations and demographic, personal, and practice characteristics.

About 500 questionnaires were undeliverable, 197 were returned by physicians no longer in practice, and 2,193 were completed (51% response rate) and returned to Drs. Carroll and Ackermann.

Overall, 59% of respondents expressed support for legislation to establish a national health insurance program (28% "strongly" and 31% "generally"). Additionally, 32% opposed national health insurance (17% strongly and 15% generally), and 9% of respondents had no opinion.

By medical specialty, the survey showed that some form of national health insurance was favored by:

* 83% of psychiatrists
* 69% of emergency physicians
* 65% of pediatricians
* 64% of internists
* 60% of family physicians
* 55% of general surgeons

About 55% to 60% of physicians representing medical subspecialties, pathology, and obstetrics and gynecology also favored national health insurance.

Specialties whose physicians opposed national health insurance were surgical subspecialties (about 45% support), anesthesiologists (40%), and radiologists (30%)....

[Bruce Wilder]

anne: More, more, better, more. I'm like all, "hooray."

Utterly vile and useless. Observe the idle hatred.

[Bruce Wilder]

Rahm Emanuel and Social Security - Tim Russert: A Gallery of Gotcha Moments - TIME
Russert: Let me turn to Social Security and put a quote up on the board. "...the looming fiscal crisis in Social Security. ...If nothing is done by 2029, there will be a deficit in the Social Security trust fund, which will either require...a huge tax increase in the payroll tax, or just about a 25 percent cut in Social Security benefits." Do you agree with that?
Emanuel: ...Democrats believe in individual retirement plans as a supplement to Social Security. Republicans believe in individual retirement plans as a way to supplant Social Security. Fundamental difference.
Russert: But do you believe there is a looming fiscal crisis in Social Security?
Emanuel: Looming — I think the crisis — if you want to use the word "crisis" — that we have today, it applies to the fact that people do not have retirement plans on top of Social Security. What crisis implies, Tim, is immediacy. OK?
Russert:...But I'm going to bring you back to that quote. Do you agree that if we do nothing, we'll have to either raise taxes or cut benefits?
Emanuel: ...Who's that quote — the quote is from?
Russert: Let me show you.
Emanuel: No. Who's it from, I asked.
Russert:Let me show you.
Emanuel: OK.
Russert: William Jefferson Clinton.

Krugman is an idiot. and, anne is our precious little puma.

[2slugbaits]

anne,

Krugman's point about conventional wisdom inside the beltway is exactly why it would be a mistake for Obama to get into an argument with McCain over "fixing" Social Security. It's a lose/lose trap for Obama. If Obama goes along with inside the beltway conventional wisdom, then he has to propose a fix, which is sure to anger a lot of his base. If he disagrees with inside the beltway conventional wisdom and argues that there is no Social Security problem, then it hurts him with a lot of low information voters because it makes him look like a do nothing candidate. It's a trap. He's smart to just focus on Iraq and Afghanistan over the next few weeks. He should hold off on Social Security until late in the campaign and then do a drive-by job on McCain by rolling the tape and making it look like McCain wants to gut Social Security, but not give McCain enough time to respond and turn the debate into an argument about fixing Social Security.

Paul Krugman is great economist, but his political skills are lacking.

[anne]

http://krugman.blogs.nytimes.com/2007/11/11/why-barack-why/

November 11, 2007

Why, Barack, Why?
By Paul Krugman

The great Social Security debate of 2005 was a seminal moment for American progressives. Conventional fiscal wisdom in the Beltway was that the aging population is THE big problem — when the truth is that grim long-run fiscal projections mainly reflect projected health care costs. * And conventional political wisdom was that the Bush administration's fear-mongering on the issue would work.

But a determined defense by progressives in the media, on the blogs, and in Congress beat back one spurious argument after another, while the American people made it clear that they really want a program that guarantees a basic retirement income that doesn't depend on the Dow. And Social Security survived.

All of which makes it just incredible that Barack Obama would make obeisance to fashionable but misguided Social Security crisis-mongering ** a centerpiece of his campaign. It's a bad omen; it suggests that he is still, despite all that has happened, desperately seeking approval from Beltway insiders.

Substantively, this is wrong — and the tone-deafness is hard to understand. Tim Russert doesn't vote in Iowa.

* http://krugman.blogs.nytimes.com/2007/11/09/good-sense-from-the-cbo/

** http://www.nytimes.com/2007/11/16/opinion/16krugman.html

[anne]

Mark Kleiman:

"Bullsh*t! I wear McCain's b*lls on my keyring!"

Vile sexist thinking, vile sexist writing. Get it?

Bruce Wilder:

Krugman is an idiot. and, anne is our precious little puma.

Vile sexist thinking, vile sexist writing. Get it?

[anne]

http://krugman.blogs.nytimes.com/2007/10/30/obama-and-social-security/

October 30, 2007

Obama and Social Security
By Paul Krugman

As a policy matter, I don't understand why Obama would choose to make a big deal of the small Social Security funding shortfall * — which may not even exist.
As a political matter, I don't understand why he would essentially try to undermine the first big victory progressives won against the Bush administration and the rightward tilt of the Beltway consensus.

This isn't 1992. The DLC isn't the Democratic party's leading edge. The center isn't somewhere between Joe Lieberman and Jon McCain. I can't understand how Obama can be this out of touch.

* http://openleft.com/showDiary.do?diaryId=2114

[2slugbaits]

anne,

Thanks. The more you post Krugman's columns the more you keep making my point for me. The correct response to "conventinal inside the beltway wisdom" regarding Social Security is far too complicated and nuanced to be argued 4 months before a Presidential election. Notice that it took a "determined defense" by Krugman and others to "beat back one spurious argument after another" before Bush's Social Security plan was finally tanked. And those fights were not in the middle of a Presidential campaign. It would be political suicide for Obama to get into a Social Security fight right now. He needs to shut up and keep his powder dry until the end of the campaign.

[Dickeylee]

Anne, Tim Russert won't be voting anywhere from now on...

[2slugbaits]

From anne's post, Krugman says:

As a policy matter, I don't understand why...

As a political matter, I don't understand why...

I'm quite sure that Krugman doesn't understand. Krugman is an economist, not a political tactician. I'm glad he understands his limits.

[Dickeylee]

And Anne, Bruce Wilder makes me proud to be a Dem, but you've really gone "One Flew Over the Cookoo's Nest" here lately.

[2slugbaits]

Dickeylee,

Oh, I don't know. I grew up in Chicago and one's life status was never an impediment to voting early and voting often.

[Dickeylee]

2slugs, what about Buffalo?

[Bruce Wilder]

I wish he understood his limits.

[BJ Feng]

"3. Since McCain has now committed to "fixing" the Social Security "problem" without raising taxes, and since the only two ways of getting projected revenues to match projected benefits is to increase revenues or reduce benefits, it follows that McCain is committed to cutting Social Security benefits. And that's before he has to reduce them again to accommodate the diversion of new money into private accounts."

The author missed a third possibility, which is to decrease government spending elsewhere to fund any SS shortfalls. The SS Fund is already mixed into the General Fund, all the surplus goes into funding programs out of the General Fund anyways, there is no reason why the opposite can't happen in the future where money is taken from the General Fund to support the SS Fund.

At least McCain can be commended on his stance not to increase taxes further. SS taxes are highly regressive and a harmful because they directly punish working. And since the SS Fund and General Fund are mixed anyway, any increase in SS taxes would not necessarily be devoted entirely to SS, currently all SS surpluses are not saved, in that they do not reduce or affect the future liability the government faces with SS.

And contrary to Krugman's column, Obama's plan is to raise the SS cap which amounts to a tax hike. This is even more foolish and deceptive than McCain's "wait and see" approach as any additional SS revenue we get today will absolutely have no impact on the amount of future SS liabilities. The additional SS revenue will be spent, the current deficit would be reduced under the assumption of no additional spending, but with Obama, you can be sure there will be additional spending.

The truth is that if you are adamant about fully keeping SS benefits, there is no need to raise taxes until we run a SS deficit. Neither Obama nor McCain have devised a system where current surpluses can be saved to reduce future liabilities so raising more revenue now while we have a surplus is useless.

Of the two, Obama's plan is worse and should be blasted by everyone here. Obama would raise taxes to be spent on non SS programs while McCain would do nothing. Sometimes it is better to do nothing.

[Bruce Webb]

2slug called this one right

If this was a straight out policy debate where all agreed that the proper starting point was the numbers then it might make sense to go after McCain. But it isn't instead certain perfectly identifiable people stratigized back in 1983 about the way to kill Social Security once it reapproached crisis, an event they were fully convinced would come about and reasonably soon. Entire organizations and operations were built up around the 'Crisis' narrative of which Cato's Project on Social Security Privatization is but a single example. And it is not just organizations that are committed, people like Michael Tanner have essentially made this their profession. Like a huge ocean liner it takes some time to turn around and at some point it becomes too late to change course. Which doesn't mean scuttling the ship and taking to the liferafts instead you have to hope that you will reach port anyway

So these guys are stuck with a narrative built around 'Crisis' which in turn has been allowed by design to be defined as 'Social Security won't be there for me'. It is too late to try to suddenly say, 'Well okay its going to be there, at least mostly, and no plan we have actually gets you a better fix at a lesser cost than simply accepting a potential benefit reset in 2041, or tax increases now, or alternately then. But really what workers need to be concerned about is not their own material interest in the median to long term but instead to focus on 'sustainable solvency'. Meaning less potential possibility of some rich guy having to write a check to support seniors.' Well it just doesn't have the same sizzle as 'Flat broke' or 'bankrupt.

So they are stuck with their story and cannot simply give it up. So they won't, they will fight this out until the last dog dies, which means continuing their misleading rhetoric and avoiding a data based discussion at all costs.

I have been working this issue in any place that could stand me for a long, long time. I long ago figured out that I was not going to be able to make the overall narrative shift, to change the course of the ship. I have induced a couple of people to jump ship but realistically until the ship actually runs aground on that big rock of Solvency the course in set and Captain and Crew will doggedly steam ahead.

At what point will Solvency become undeniable? Well in 2005 I would have said by 2008. We had some less than steller numbers in 2005 and 2006 and by 2007 I would have said they will crash with the 2010 Report. Well given the current state of crisis in oil/housing/food/credit I am going to have to bump that forward to maybe 2012. Recognition of long term Solvency is coming, its just a matter of time and numbers. But 2008 is not yet the time to take this one to the people, after all they know what they know because afterall 'everyone knows----'. New Deal Democrat put up a post at Democratic Underground with the rather provocative title 'Everything you know about Social Security is wrong', and putting up some numbers developed by me and Barkley Rosser. And it is really odd how resistant even people who very strongly identify as Democrats to the idea that Social Security actually works as designed. It is not that they don't want it to be true, it just goes against everything they have been taught for the last 25 years.

In the place I hang out I am generally considered 'Mr. Answer Guy' and acknowledged as the go-to guy on lots of stuff. But when I tell them about Social Security they just shake their heads sadly. Clearly Bruce is just around the bend because after all 'Everyone knows---'. If I can't convince friends that have seen me face to face everyday for years and know that I never just make shit up on this, and I can't, I am not going to think I can turn the whole national ship on a dime.

Plus it doesn't help that Obama has people on his economic team that are openly associated with the concept of 'Sustainable Solvency'. It is hard to make a bold move when some of your own people are tugging on your coat. I would be incredibly surprised if Obama did anything but play defense on this and last weeks comments by Jason Furman bear that out, Furman did nothing but fuzz up the issue and punt it to the next Congress.

[2slugbaits]

BJ Feng,

Talk about fixing Social Security is just that, talk. It was a lively issue in 2000. Today it doesn't even register as a top 5 issue according Quinnipiac's latest poll. McCain is just trying to manufacture a wedge issue. McCain knows that most of his support comes from older voters and he is trying to make them think a President Obama doesn't care about Social Security and he (McCain) does and wants to fix it. It's the old GOP playbook. The fact is that the next Congress isn't even going to consider Social Security "fixes" even if they were a good idea...which they're not. Obama and the next Congress will do well to take care of Iraq & Afghanistan, pass universal healthcare and bring down the structural deficit. Those would be huge accomplishments.

BTW, it's Obama that would prefer to do nothing. McCain is the one who is out there talking about today's workers having to fund Social Security as being some kind of "disgrace." If that's so, then it's been a disgrace since day one. So evidently McCain wants to make some big changes???

[2slugbaits]

"2slug called this one right

Well that's amazing. A case of a stopped clock being right twice a day? :->

[Bruce Webb]

BJ Feng it is not really true that Social Security surpluses are simply blended with the General Fund. For certain purposes they are accounted together, for others like in the Budget or in Social Security Reporting there is no such mix, the lines between the Trust Funds and the General Fund in fact remain clear and bright.

Plus there is every reason to resist paying for Social Security out of the General Fund, it would be unwise on both political and policy grounds.

And people are complaining now about simply having to pay back the money they borrowed, shortfall in 2017 is already being presented as some huge crisis, suggesting that a future shortfall should be funded out of Social Security is to concede that Social Security is broken in the first place. A point Democrats, if they knew it, shouldn't be conceding at all.

Left alone Social Security might need some action around 2027 under Intermediate Cost Assumptions. Under Low Cost assumptions it might require some action in the opposite direction (i.e. tax cuts) about 2023. We certainly don't need to move on this until we know which way the economy will be going in around 2012.

"Nothing' is the numerically proven plan for Social Security since 1997. And while it may be frustrating to some, the numbers continue to show that 'Nothing' is the right plan for 2008 and 2009.

[Icarus]

Robertdfeinman,

Now you're really sounding pathetic. Is it either/or? You're either a Troll or a working stiff? You just continue to sound like a unimaginative redistributionist who really belongs in a collectivist nation.

The key to a healthy life is healthy living...not some dependence on govt dispensed health care. You should learn the difference.
And, a prudent life, with proper planning, and financial responsibility prevents many of the calamaties you depend on for your opinions. Try it. It just may work.

And, relying on the government is not a progressive solution. Whether healthcare, education, pensions, or many other things we should ask our citizens to take care of privately, the govt is suboptimal. Poor service, poor quality, poor results.
It's no wonder the wealthy try their best to disengage from govt services...

Is this where I suggest a piece of literature for you, which details the horrors of state-centered living, and the economic demise it can cause?

This is not about ego...this is about getting people to engage in behavior which promotes financial and material security within a capitalist system. Relying on handouts isn't the answer.

Shame on you.

[Bruce Webb]

And BJ there is in fact no reason to think that increases in payroll tax would not show up in Trust Fund balances as legal obligations for Treasury to pay if and when. Your contention that these different funds are totally fungeable is simply not right as a matter of law or a matter or practice. Every dollar and penny ever sent to Social Security has been spent for Social Security or has been creditied to a Fund to be drawn upon for future Social Security needs.

The confusion seems to rise from a failure to understand the nature of a bond. Once I buy a bond from the Treasury the dollars no longer belong to me, they become General Fund dollars. Same with Social Security, once the Trust Funds are credited with Special Treasuries the dollar surpluses are not Social Security's at all, they are all General Fund dollars. As long as Trust Fund accounting is honest, and its track record on that is impeccable, there is no blend.

The idea that there is is actually just a component of the larger 'Phony IOU' argument and is just as bogus.

[anne]

"Obama would raise taxes to be spent on non SS programs while McCain would do nothing. Sometimes it is better to do nothing."

No, no, no.

http://krugman.blogs.nytimes.com/2008/06/18/baselines-shmaselines/

June 18, 2008

Baselines, Shmaselines
By Paul Krugman

Wise words from the Tax Policy Center: *

"There is an easy way to cut through this palaver. Forget the baseline. Just think about three numbers: How much would either candidate collect in taxes as a share of the Gross Domestic Product? How much is government likely to spend? And, how much would they have to cut that spending to keep the national debt from ballooning.

"TPC estimates that in 2013, Obama would collect revenues of 18.2 percent of GDP. McCain would bring in about 17.8 percent. Spending that year would be about 19.5 percent, according to the Congressional Budget Office, assuming the Iraq war will be winding down."

The key point, again: because of all those middle-class tax cuts in the Obama plan, he collects only 0.4% of GDP more in taxes than McCain. The tax collection comes from different people: lower and middle-income Americans would be substantially better off under the Obama plan. But where is the money for health care reform?

* http://taxvox.taxpolicycenter.org/blog/_archives/2008/6/17/3749641.html

[anne]

"It's no wonder the wealthy try their best to disengage from govt services..."

Quite the lie, but keep trying.

[anne]

http://www.mulchblog.com/2007/06/full_disclosure_who_really_ben.php

June 12, 2007

Full Disclosure: Who really benefits from federal farm subsidies
By Ken Cook

Environmental Working Group finds that the top 1% of beneficiaries * received 17% of the crop subsidy benefits between 2003 and 2005. Their average benefit was $377,484 per person for the 3 program years or over $125,000 apiece annually....

"It's no wonder the wealthy try their best to disengage from govt services..."

[Barkley Rosser]

Bruce Webb,

Keep in mind, please, that James Galbraith is one of those who has been identified as an adviser to Obama. Jason Furman is senior to Liebman, and he strongly defended social security over on Maxspeak and was a main leader in the battle against the Bush plan. We do not know how all this will turn out, but Obama has people around pushing the argument that nothing needs to be done.

Furthermore, I have seen nothing that contradicts what Obama has said all along, that he supports a certain kind of tax increase for social security. I would prefer he not support that, but he has not supported cutting benefits or privatization. Obama's plan still does not seem destructive or damaging to me, although I would prefer to do nothing.

BJ Feng,

I have not seen McCain say "wait and see." I have seen him calling social security a "disgrace" and calling for benefit cuts and starting private accounts, but no tax increases. He has a sort of plan that resembles the one that Bush pushed that got shot down and for good reason. I am not a big fan of Obama's, but I see it as much better than McCain's, no comparison.

kthomas,

Oh brother, another ignorant generational warrior. Those who have made out best on social security are those who retired in 1971 when the COLA went in and have continued to live. Gotten great benefits that they paid doodley-squat for. Since 1983, baby boomers have been paying high fica taxes so the Greatest Generation could get their COLAized bennies.

The baby boomers may be responsible for a lot of things, including electing Ronald Reagan and George W. Bush who massively increased our budget deficits. But on social security the baby boomers have been highly responsible.

Icarus,

It is "not progressive" to "rely on a handout from the government" for health care or old age pensions? Well, that is what they do in all other high income countries, where they spend much less on medical care but have much better outcomes in terms of life expectancy and infant mortality, and are also doing just fine paying their old age pensions, despite not having as favorable demographic balances or projections as we have here in the US.

[anne]

http://www.mulchblog.com/2007/06/full_disclosure_who_really_ben.php

For instance, we continue to find that farm program benefits are highly concentrated in the hands of a small minority of subsidized individuals and operations, even after multi-million-dollar payments to large cooperatives have been disaggregated and attributed to individuals. Environmental Working Group finds that the top 1% of beneficiaries * received 17% of the crop subsidy benefits between 2003 and 2005. Their average benefit was $377,484 per person for the 3 program years or over $125,000 apiece annually....

"It's no wonder the wealthy try their best to disengage from govt services..."

[Dickeylee]

Icarus, what makes you think we're not a "collectivist" nation? So the Fed window being open to the commercial banks these last few months isn't "redistribution"? Bear Sterns isn't redistribution? Public highways, public education, your water district? Fannie and Freddie, FICA for IndyMac, etc...the list is really endless. You're just another I've got mine Republican.

[Dickeylee]

Good job Barkley.

[gordon]

This might sound silly, but at its simplest the US Govt. is running a big deficit and needs money to pay for bank bailouts and the Iraq/Afghanistan wars. The Social Security system has money. So the only real issue is how to get hold of it.

Sometimes we make simple things sound too complicated because we're so damned clever and know so damned much. People who make decisions are often pretty simple souls, like the housebreaker whose logic is along the lines of; "You've got stuff. I want stuff. I'll take your stuff".

[Publius]

Bruce,

Thanks for the reply. As far as my ideological position, I am very supportive of compulsory savings (e.g., social security), but I will admit that I am very skeptical that setting aside a relatively small amount of money for 45 years and putting it in an uncompetitive government bond will adequately support someone living with no other income for 10-20 years.

Color me skeptical.

Yet another reason I am skeptical is that the the pay/go nature of the system is PRIMED for nailing the current taxpayers at the expense of the retirees. If there really were a lockbox (not saying this would be ideal in any other way, but for this purpose...), I'd have no problem with the Boomers simply getting THEIR money with interest back.

So I am inclined to believe that the SSA is paying out benefits based on how many boomers are alive and how many benefits they were promised, *RATHER THAN* receiving their share of the Boomers' SS sum + interest. Who foots the difference in this case? Little Jimmy! (Everyone loves little Jimmy!)

So that's my bias in this situation. Now, I wouldn't be surprised if you indeed really like the idea of social security, and perhaps you might be willing to acknowledge that your perspective might cause YOU to overlook or ignore some contradictory evidence.

Now I pride myself on being open minded, so I will take another look at the material you provided.

Returning to my larger question. Someone posted this quote from Bill Clinton. Is it true?

"If nothing is done by 2029, there will be a deficit in the Social Security trust fund, which will either require...a huge tax increase in the payroll tax, or just about a 25 percent cut in Social Security benefits."

Now, Bill Clinton is a pretty smart guy. And a Democrat (I know, I know, he's no Ralph Nader!) I am not saying that he's right, and you're wrong. The masses are not always right, so I won't dismiss you, but the burden of proof lies with you (of course, this being the internet, you don't have to accept it...)