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| 12/24 |
| 2005/4/13-14 [Finance/Banking, Politics/Domestic/SocialSecurity] UID:37162 Activity:very high |
4/13 Stop the Presses - (John Corzine(D) says print more paper money to
fix Soc. Sec. problem!)
This is same dipshit whose idea to stimulate the economy in 2002 was
a 300$ one time refund to tax payers. More incredible is this
guy is from Goldman Sachs. Wait, Robert Rubin of LTCM and
Mexico bailout fame is also from Goldman Sachs...
http://www.nationalreview.com/murdock/murdock200504120929.asp
\_ Just because you don't understand the concepts behind it doesn't
mean he is a dipshit. Also, that you don't realize you're reading
an article that oversimplifies the point to make political hay makes
YOU the dipshit.
One more thing:
"The idea that the pay-as-you-go concept is a sound
savings and retirement system is a fraud."
This should have been a tipoff. SS is NOT a "savings and retirement
system."
\_ you know more than Milton Friedman, interesting.
\_ you think Milton Friedman's word is gospel, interesting.
\_ no, just disagree.
\_ No shit sherlock, it's a big ass government funded pension
system that relies upon current taxpayers to fund past
generations, which is a problem because life expectancy
has drastically increased in general resulting in that
system being potentially insolvent within our collective
lifetimes. This is why it's an issue, this is why
it probably needs to turn into a "savings and retirement"
system in the long run. Are the Pubs right in saying it will
become insolvent in XYZ year? Perhaps. But if the Dems want
to appear semi-coherent about the issue they need to do their
homework and show how the system will NOT become insolvent
based on any given set of projections vs. what the Pubs are
saying. Are personal accounts the answer if there is a problem?
Maybe, but the flip side to that coin is that you are leaving
the decision making process for retirement up to individuals,
and the majority of individuals couldn't financially plan
their way out of a paper bag. Perhaps this may change if we
gave them the responsbility, who knows. Anyway, the issue
has been broached, and it needs to be addressed one way or the
other.
\_ It isn't a "pension system" either. It's societal insurance.
It's us as a society saying "if you contribute to this society
we will guarantee you a baseline level of support when you
are elderly or can't work anymore." It's insurance. If it
turned into a "savings and retirement" system, it would no
longer be a guarantee. The Dems are coherent on it. The
administration itself has stated that private accounts do
absolutely NOTHING to affect solvency. The Reps are
purposefully incoherent because they're doing marketing. And
you're just an idiot.
\_ Question 1: What was life expectancy when SS was enacted?
Question 2: At what age were you allowed to collect SS
income?
\_ Increases in life expectency were predicted pretty damn
reliably by the actuaries. The discrepancies have been
taken care of by tweaks in the system and increases in
productivity. This is a red herring, and does nothing
to support switching to privatization even if it weren't.
Privatizing puts us trillions more into debt and moves
those insolvency projections UP.
\_ Why have you not answered the question?
\_ Because the answer would be irrelevent. The
system has evolved for 70 years.
\_ Then let's evolve it again.
\_ By removing the guarantee and adding $2+T
to our debt. Great.
\_ Yep, and it'd get rid of the IOUs, which
aren't a guarantee anyway. Congress can
just change the retirement age whenever
they like. Some guarantee.
\_ yes they ARE a guarantee. And if you
think they're not then sell me any
treasury bonds you hold. I'll give
you a nickel on the dollar if you
think they're worthless. As long
as this country has its constitution,
those bonds are an absolute guarantee.
\_ If the market collapses and the
economy tanks, it's not a
guarantee. Just like private
retirement.
\_ Even then you're wrong. Those
bonds go away when this country
goes away.
Check amendment 14, paragraph 4
\_ 65 and 63. Insert argument about avg. life
expectency vs. expectency after adulthood here.
we've rehashed this dozens of times.
\_ Then what are *those* numbers? What was life
expectancy after adulthood then vs. now?
\_ It really doesn't matter because comparing
SS structure now to then is apples to
oranges.
\_ You could make SS instantly solvent by raising
the retirement age up to 80.
\_ You could make SS instantly solvent by
raising the retirement age up to 80.
\_ As we have told you dozens of times before,
the original SS actuaries accurately
predicted that lifespans would increase.
They even guessed what the lifespan increase
was going to be pretty accurately. The
fact that you cannot comprehend this fact
and insist on hammering at a Red Herring
just indicates that you are not too well
informed yourself. The real problem is
demographic and is caused by the baby
boom generation retiring. No one could
have predicted that. This problem will
fix itself, btw, in about 70 years.
\_ Oh no, nobody could have predicted that
the baby boomers would retire!
\_ Not in 1933, they couldn't.
\_ Hey, this scheme did help a capitalist democracy get out of debt
once before...
\_ You mean WWII?
\_ The post-WWI German government decided to just go nuts
printing more Deutsch marks. Surprise-surprise they got
insane inflation.
\_ And people mock those who point to this kind of thinking as the
reason it was bad to leave the gold standard.
\_ But what Corzine is saying is what is happening. The current solution
to our massive deficit and liabilities is a printing press. I mean
it's not like we are actually going to raise taxes to pay for it.
\_ But what Corzine is saying is what is happening. The current
solution to our massive deficit and liabilities is a printing press.
I mean it's not like we are actually going to raise taxes to pay for
it.
it, or cut spending. |
| 12/24 |
|
| www.nationalreview.com/murdock/murdock200504120929.asp traveled April 5 to Parkersburg, West Virgin ia to visit the so-called Social Security Trust Fund: a filing cabinet f illed with paper. "There is no trust fund just IOUs," backed by no eco nomic assets whatsoever, Bush noted. In a conference call with journalists, Corzine said: "US Trea sury securities have the ability to be paid under any circumstances base d on the ability of the government to print money." While Corzine's pres s secretary denies this comment was a concrete proposal, at this writing , the senator proudly highlights this quote on the front page of his web site. So, as Corzine sees it, come 2041, when the federal government's plunging tax revenues will cover only 70 percent of its exploding pension obliga tions, Washington will trigger Treasury Department printing presses to f inance Social Security checks. Inflating the currency is a dreadful idea that has landed much of Latin A merica in massive trouble. Like a latter-day Evita Peron, Corzine smiles upon the Argentine economic model: skyrocketing prices, a currency as d isposable as Kleenex, and rising social chaos. Democrats have said many silly things in their crusade to scuttle Preside nt Bush's personal retirement accounts, but this must be the stupidest. is r ight when he says this, but that doesn't mean we don't have to be worrie d about it," Friedman adds by phone from his San Francisco apartment. "It's never advisable to print too much money," Friedman warns, due to en suing inflation. It's a hidden for m of taxation, but it's taxation nonetheless." Asked what to expect if Corzine's concept were implemented in 2041, Fried man predicts: "It's going to be a serious problem." "The 1970s give us a clear indication of what this wou ld be like, but this would be the 1970s magnified," says Krzysztof M Os taszewski, actuarial program director and professor of Mathematics at Il linois State University in Normal, Illinois. "There would be inflation o nly if the Federal Reserve accommodates the federal government and actua lly adds the money supply. If they do, this could be substantial, becaus e the shortfall amounts to about a quarter of Social Security benefits, and there will be a simultaneous, probably larger, Medicare shortfall, a ll of this amounting to something like 5 percent of GDP. So realisticall y this kind of inflationary policy could lead to a shock five time stron ger than the current oil price increase, which already has slowed the ec onomy and is felt throughout." Ostaszewski, an adviser to the Cato Institute's Project on Social Securit y Choice, sees trouble brewing much sooner. "I actually think that the pressure will start around 2008. That will be exactly 62 years after 1946," the year the first baby boomer was born. T he youngest boomers then could opt for early retirement. Either we do something before 2008, or 2008 will become a crucial election. Similarly, the Medicare crisis will star t in 2011, because Medicare benefits start at age 65." "In any case," Ostaszewski adds, "in 2031, Social Security alone already will be missing 2 percent of GDP, and if this is monetized, as Senator C orzine suggests, then we are looking at a 2 percent increase in inflatio n every year. So, imagine having this inflation scenario starting with c urrent 2-percent inflation: 2 percent, 4 percent, 6 percent, 8 percent, ... This, of course, would cause a disaster in our bond marke t, and the value of the currency. For anyone to propose that, as governm ent needs money, we should just create money supply is really quite dang erous." Steve Hanke, a Johns Hopkins University professor an d a Forbes columnist. "The thing that isn't being said is that the money going into the trust fund IS NOT SAVED in capital letters. It's just a captive pool of money that the government taps into to finance general government expenditures other than Social Security." "I think the senator should be much more worried about a clear accounting on Social Security," Hanke continues. "The idea that the pay-as-you-go concept is a sound savings and retirement system is a fraud. As concerne d as the senator has been about transparency in corporate governance, he should pay equal attention to transparency in government accounts. That would include quite a massive restructuring and a lot more transparency in the Social Security system." "The monetary base (M0) runs roughly 7 percent of GDP," he says in moneta rists' parlance. This is "$768 billion M0 right now versus $12 trillion nominal GDP. The Social Security benefit/receipts gap will be about 25 percent of GDP in 2042, I think. So printing that gap with high-powered money would dilute the dollar by 25/7 or 36 percent in the first year, so it would weaken that much at l east." This economist defines "high-powered money" as "MO" This includes physic al cash plus bank reserves. "Turkey used to do this (assume some of the budget deficit is printed)," he continues. "Until they dropped six zeroes from their currency last Ja nuary 1, the Turkish lira was 135 million per dollar." "You're right to make a big deal of it," he adds, requesting anonymity. " The negative consequences are huge, whether the government prints the mo ney, raises taxes to pay the benefits, or suddenly cuts the benefits." Senator Corzine deserves a sliver of credit for finally hinting at a Demo cratic answer to Social Security's mounting woes. With that pat on the b ack, the Garden State's senior senator should step away from the printin g presses and go back to the drawing board. |