The $4.7 Trillion Pyramid

[Eagle43]

Well, it's been a while since we visited this. Looks like the Democrats are winning the SS argument. So, here's a link to an article that agrees with them.
http://www.harpers.org/The4.7TrillionPyramid.html

It's an article against private accounts. Claims that the stock market is held aloft now by the constant influx of retirement dollars, making it a bubble. Article implies almost a plot to create a "bush boom" in the stock market so we can grow our way out of current economic problems.

There's several footnotes, including one bashing Chile's "success" story of private accounts.

Also one that claims that today's real wages are lower than 1964. Can this be true?

 

[moghopper]

Also one that claims that today's real wages are lower than 1964. Can this be true?

I guess that all depends on whose statistics you use.

Some would say we're working more, and the real $ / hour today is lower - but I'd have trouble believing that. I think most people just like to complain. I tend to think that some people are happier when they're miserable. I guess if you tell yourself everything is terrible, then when something good, or even not bad happens, then you're pleasantly surprised.

According to the "Labor Research Association", a "New York City-based non-profit research and advocacy organization that provides research and educational services for trade unions", real wages as expressed in 1982 dollars were 302.52/week in 1964 and 277.57/week in 2004.

http://www.laborresearch.org/charts.php?id=8

IN a 1997 letter, the Federal Reserve Bank of Chicago, tries to clarify this problem. "One measure of the real wage that has received substantial attention is the real hourly earnings series...It is obtained by deflating the average hour earnings figure that the Bureau of Labor Statistics (BLS) obtains every month from its Current Employment Survey (CES) of establishments by the BLS’s Consumer Price Index for Urban Consumers (CPIU)...
real hourly earnings peaked in 1972 and are currently about 16% below their historical high...
major methodological problems...they cover only wage and salary compensation. Fringe benefits and contributions for social insurance programs...are left out...earnings data
are also limited to production and nonsupervisory workers... nearly 20% of workers excluded from the average are more likely to be highly skilled and highly paid."

http://www.chicagofed.org/publications/fedletter/1997/cflmar97.pdf


The 1997 annual report of the Dallas Fed also had an interesting article in which they opined that there was a declining cost of living. If nothing else, it illustrates how difficult it is to compare costs over periods of time.

http://www.dallasfed.org/fed/annual/1999p/ar97.pdf

 

[Arif]

It's amazing that there is so much talk about SS now. I was watching CNN a few months back and they had Warren Buffett on. Lou Dobbs asked him about what he thought of the state of SS. As always he made a very great point. Buffett said this country should be worried more about the CURRENT trade deficit with China which is running over 80 billion (if I recall correctly) right NOW and SS won't be in trouble until 30-40 years from now. Seems like we should spend our energy on the trade deficit which is a more immediate problem. Also read somewhere that medicare is in worse shape than SS but no one is talking about that!