Ken Mehlman Lies to me.

[Eidolon Faer]

Okay, Maltheos...

1. We've been "fixing" social security every few years for as long as I've been alive. We need to "fix" it now to push back the 2048 doomsday date. We needed to fix it when Clinton was in office and when Gore ran on a lockbox scheme. We "fixed" it during the Carter years, and during the Reagan years too. The boat has been threatening to sink for 40 years.

What Bush is proposing is not simply buying a new and more-expensive bucket to bail with. He wants to actually plug the hole in the bottom of the boat. Which solution requires the political will again?


2. Your car insurance example is a flawed one. That only pays out if you do something you're not supposed to do. Everyone dies eventually so life insurance is a more-relevant example. Or perhaps buying an annuity.

If you have an annuity and you die, the payments keep coming to your wife or kids or whatever for the agreed-upon term. The money is part of your estate. If you die with Social Security coming in, your heirs get nothing, but do you get a refund of the unused amount you paid in? No. Uncle Sam keeps it. It's a sucky deal. If a bank tried crap like that they'd be sued into oblivion or shut down.

It's about like a life-insurance policy that refuses to pay out because you're dead.


3. Why is there vehement objection to the plan when no specific details have been proposed? The 401(k) is very popular. And most would agree it has been remarkably successful. It proves that private retirement accounts work well on a large scale, and give the lie to most of the objections to the plan I've heard. The only major flaw with the 401(k) is that not everyone contributes to one, either because of foolishness, or an inability to afford the contributions after Social Security is withheld. This proposal would obviously solve both problems.

[Partha]

3. Why is there vehement objection to the plan when no specific details have been proposed?

Funny, the man talked about 'fixing' Social Security in 1999. He's had 5 years, and has yet to have a specific plan to show.

[Eidolon Faer]

He's been a bit distracted by 9-11. Perhaps you've heard of it?

Also, given the steady erosion of the Democrat Party in Congress, perhaps Bush feels he can finally get the bill passed despite partisan obstructionism.

Perhaps Bush believes that by forcing "The Party of No" to begin parroting a line that "Social Security is hunky dory, nothing to see here! Nope, no problems at all!", they will somehow manage to alienate the four or five members of their base who have functional braincells.

But don't worry, Partha, you're safe.

[Partha]

He's been a bit distracted by 9-11. Perhaps you've heard of it?

So, what you're saying is, once he gets a single problem, he has to devote 100% of the resources of government to it? That he is unable to put together a team inside the White House to craft the relevant legislation? Facinating.

[Partha]

Oh, and as a by the way, if it was really ME who one could accuse of a lack of functioning braincells, one wouldn't attempt to link me with the 'hunky dory' crowd, especially since in an earlier post I said:

Now, that doesn't mean I oppose all changes to Social Security.

Once again, the forces of reading and comprehension triumph, and Eidolon's argument is left bleeding it's misbegotten life out on the sand.

[maltheos]

Okay, Maltheos...

1. We've been "fixing" social security every few years for as long as I've been alive. We need to "fix" it now to push back the 2048 doomsday date. We needed to fix it when Clinton was in office and when Gore ran on a lockbox scheme. We "fixed" it during the Carter years, and during the Reagan years too. The boat has been threatening to sink for 40 years.

What Bush is proposing is not simply buying a new and more-expensive bucket to bail with. He wants to actually plug the hole in the bottom of the boat. Which solution requires the political will again?

Private accounts will not "Fix it" -- It is estimated that by adding private accounts we will introduce an even more significant financial shortfall ( on the order of trillions of dollars) into the system prior to the present end date. Thats like fixing a leaky boat by drilling annother hole for the water to drain out of. Now, I have yet to see any hard details about what cuts or changes he proposes to make to shore up the system for the long haul. Lots of chicken little type noise, but no hard facts. If he comes up with a plan that looks to work I will support it, but the private account cure seems far worse than the disease.

2. Your car insurance example is a flawed one. That only pays out if you do something you're not supposed to do. Everyone dies eventually so life insurance is a more-relevant example. Or perhaps buying an annuity.

If you have an annuity and you die, the payments keep coming to your wife or kids or whatever for the agreed-upon term. The money is part of your estate. If you die with Social Security coming in, your heirs get nothing, but do you get a refund of the unused amount you paid in? No. Uncle Sam keeps it. It's a sucky deal. If a bank tried crap like that they'd be sued into oblivion or shut down.

It's about like a life-insurance policy that refuses to pay out because you're dead.

I agree car insurance is not the best analogy, though not for the reason you propose. Car insurance is (generally) a lump sum payout type of policy. Lets try using medical insurance as an annalogy -- that type of policy generally tends to pay slowly over an extended period of time. You don't expect your medical insurance to be great investment -- you have it to avoid being financially destroyed when the worst happens to you. As to your life insurance analogy have you ever heard of term life -- it only covers you for a fixed number of years. You can buy that, pay for the policy and the day after the end of term it is worth precicely no money. SSI is a manditory insurance policy taken out to prevent us from drowning in destitute retirees. It is not an investment account, but it can be a keystone in an investment plan by providing a hedge versus risk.

As to your anuity example, there are specific financial instruments called life anuities that behave very like social security. They will for a certian period pay benefits to your survivors, however once that period is done they will continue to pay you, with such payments terminating upon your death. That sounds almost exactly like the way social security works it.

3. Why is there vehement objection to the plan when no specific details have been proposed? The 401(k) is very popular. And most would agree it has been remarkably successful. It proves that private retirement accounts work well on a large scale, and give the lie to most of the objections to the plan I've heard. The only major flaw with the 401(k) is that not everyone contributes to one, either because of foolishness, or an inability to afford the contributions after Social Security is withheld. This proposal would obviously solve both problems.

My objection to this plan is that what details I have heard thus far make me extremely sceptical about it. I have no issue with 401K plans as such. They are wonderful instruments. However IRA's and other such instruments do exist as well. I am strongly sceptical that SSI withholding is a major cause of lack of retirement saving. My guess is that most people want their money now and not later -- we americans are a people who do not invest or save well.

[Klast Brell]

Social Security is best described as an anuity.