Social Security Reform - Today's News............

Headline in the Paper

Bush pushes forward - Republicans Wary

The reason is that Congress knows that it needs Senate Democrats to get anything passed at all. Bush is starting to lose support in his own party.

The debate in the last few days is that Bush is Calling SS a crisis and the Democrats are comparing that to when he called IRAQ a crisis (Now almost everyone agrees, that IRAQ is a crisis).

The only proposal that Democrats will listen to is removing the Cap on the current $90K Max on Income in exchange for Private Accounts. This puts the GOP in the position of 'raising taxes' -

They're nervous, as they have to run for re-election - Bush doesn't. Messing with SS and raising taxes are not good things to run on.

The betting money is that a stalemate will develop much faster than the Clinton Health Care plan. Bush will be a lame duck about 60 seconds after taking the oath of office on Thursday.

[sgeeeee]

If it's true that we will reach stalemate, then John Galt and I will agree on something political for perhaps the first time -- Stalemate with this administration in power would be great.

Hmmm...if the domestic agenda is stalled, he'll have plenty of time for new foreign involvments.

[sgeeeee]

Hmmm...if the domestic agenda is stalled, he'll have plenty of time for new foreign involvments.

Yeah, but he ran out of soldiers before he ran out of enemies. And now he's producing enemies faster than they can find people willing to enlist as soldiers. I think this administration has shot their wad on foreign involvments too.

[Michael]

Private accounts, and reduced benefits for future retirees are a done deal. The market will rise for several years, and deficits will go on as far as the eye can see. The deficits will be "off budget", of course, so that the government can pretend they don't exist. Equities and inflation hedges may be the way to go, at least for awhile.

Private accounts, and reduced benefits for future retirees are a done deal. *

A done deal? - What planet do you live on? I'll put a side bet on it with you.

- Private Accounts is a 'Code Word' for taking away SS . Bush was talking to the the 20 somethings. To get this thru taxes will have to be raised.

Luckily, the young have Congress looking out for them. Bush used up all his capital on Iraq. This is a Stalemate if I've ever seen one.

[LEX]

I would suggest that the closest the Congress and the President ever get to providing me as a taxpayer good government is a stalemate...its what we call in Arizona a Mexican Standoff, both sides hold each other off with six guns drawn. *Perhaps while the two greatest impediments to the personal well being to the average American Peasant do mutual battle we "citizens" will be able to live within the status quo of a payroll tax system that is at least capped at 90K and a social securitity system that is not yet declared bankrupt, despite rumours of its early demise. *I do not honestly believe the Congress and the President even understand the immediate implications of their tax and social security policy blunders much less have the ability to manage them for the long term.

I hope they keep each other very busy running in place for at least the next four years.

Private accounts, and reduced benefits for future retirees are a done deal. ...

I hope that prediction is incorrect. I just sent letters to my senator and congressman for the first time to tell them what I thought about the Social Security proposals being floated....not that they will listen to me.

[charlie]

Scott Burns of the Dallas Morning News had an
interesting article on this subject today:

ihttp://www.dallasnews.com/business/scottburns/

Cheers,

Charlie

[charlie]

oops.......

http://www.dallasnews.com/business/scottburns/

I hope that prediction is incorrect. *I just sent letters to my senator and congressman for the first time to tell them what I thought about the Social Security proposals being floated....not that they will listen to me. *

parnass,

You bet they'll listen! *- Why, because there are about 100 Million of you out there. And they know that.

This is the reason that SS has always been called the 3rd leg of politics. This will be driven home this year. Mark my words!

[Bob_Smith]

I just sent letters to my senator and congressman for the first time to tell them what I thought about the Social Security proposals being floated....not that they will listen to me. *

I did too. And so did my wife, and my adult children, and my brothers, and my parents, and anyone else I can convince to do so.

Scott Burns of the Dallas Morning News had an
interesting article on this subject today:

ihttp://www.dallasnews.com/business/scottburns/

Cheers,

Charlie

Just finished reading the Scott Burns article. His 'plan' won't fly at all! - National Sales Tax! - Wait a minute, I've already paid income taxes on my money! - Now you want to tax it again!

Scott Burns has sunk to new lows in my Book. He even admitted that he voted for Bush twice. - What did he expect. Hell will freeze over before they adopt the Burns plan.

Expect SS to be a major Campaign Issue for 2008 - This will start in 2006 - Next year. Once the details are out, the public will have a major outcry.

In a nutshell - Democrats will propose eliminating the current 90K cap on the payroll tax. The GOP will propose borrowing the money for now, and screwing the very young and unborn for the future.

Scott Burns will not get nominated by any party. He may get 2 write-in votes.

[farmerEd]

>>In a nutshell - Democrats will propose eliminating the current 90K cap on the payroll tax. The GOP will propose borrowing the money for now, and screwing the very young and unborn for the future.

If someone came to this forum and admitted that they have not yet saved enough to retire yet, and that they were getting close to needing to retire, and asked if it would be a good idea to borrow some money and it invest that borrowed money in the stock market to see if they could make up for the savings shortfall, I wonder how many people here would support that "plan"? Probably not many...when it comes right down to it, that is what Bush's plan is...

[Hyperborea]

If someone came to this forum and admitted that they have not yet saved enough to retire yet, and that they were getting close to needing to retire, and asked if it would be a good idea to borrow some money and it invest that borrowed money in the stock market to see if they could make up for the savings shortfall, I wonder how many people here would support that "plan"? Probably not many...when it comes right down to it, that is what Bush's plan is...

Hey, that sounds like the carry a mortgage and invest in the stock market debate! *

[ESRBob]

My concern is that Bush will buy off the people already collecting SS (and those within a few years of collecting) by saying, nothing will change for you. Then he'll go to everybody under 30 and say, "look at what a private account managed by us will do for you. Who gets nailed is people between 30 and 60. That's us, especially those of us not still paying into the program (early retired or much-reduced income earners). No private accounts for us. Gee, would they let us fund them from savings instead of wages?

It is the wage-indexing vs inflation indexing that will be the blunt instrument of choice. Lowenstein reckons if that were done originally, benefits today would be 1/4 of what they are now. 300 instead of 1200 -- arrived at by matching that original goal of 40% of someone's salary in 1940 and just updating it for inflation. The overall rise in living standards above and beyond inflation, paid for by real rise in wages, takes you from $300 to $1200.

Bernstein calls it, to paraphrase, keeping up with the wage-earning Joneses and figures ER's have only a decent chance of doing so over time.

Even Cola'd pensions are subject to this erosion in relative standard of living, lest anyone start feeling too safe. Only SS seems to have taken the approach of adjusting us for wage growth instead of just inflation.

Looks like I'm in for a lifetime of learning how to cut more costs every year. Either that or hope for Cut-Throat's stalemate. Course this will come up again -- we'll need a series of stalemates...

[Nords]

Headline in the Paper

Bush pushes forward - Republicans Wary

Tomorrow's headline:

White House quote: "Quack, quack"

[Michael]

Who gets nailed is people between 30 and 60.

More like 40 to 55. However, the hit for someone in their mid 40s is only about 10%. The larger number applies to those under 40, but the President has promised that their private accounts will more than make up the difference.

[BigMoneyJim]

The larger number applies to those under 40, but the President has promised that their private accounts will more than make up the difference.

If I were to not care about the uneducated private investors getting fleeced, being 34 and more or less investment savvy would this plan actually benefit me? (I figure on working another 15-25 years, unfortunately, depending upon returns; and I already have 40 quarters of SS contributions, FWIW.)

For the record, though, forced self-directed private accounts, among other things, sounds like a turkey shoot for CFP's and investment companies looking to fleece the uneducated investor. I'm not a big fan of benefitting while screwing others. (If I were I'd probably run out and get a CFP certification right now.)

[JWV]

Another viewpoint:

http://www.cepr.net/columns/weisbrot...ony_crisis.htm

Judy