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January 09th, 2006Published!!!
January 09th 01:00:18 PM
S4 Education Director Nicola Moore had her book review of Nancy Altman's "The Battle For Social Social Security" published by America's Future Foundation's "Brainwash" magazine. This book was endorsed by Rock The Vote's Hans Riemer; fortunately Nicola is here to set the record straight.
Posted by Chris Schrimpf| Comments (0)
January 06th, 2006Sign of the Times
January 06th 05:31:13 PM
Business has figured out pay as you go doesn't work. When will Congress?
From today's Washington Post:
"International Business Machines Corp. said yesterday that it will freeze the pension plans of some 120,000 employees in the United States, effective at the end of next year, and will offer instead an improved 401(k) plan.
IBM's move is part of a corporate stampede away from traditional pension plans. IBM officials called the change essential to remain competitive with foreign and domestic information-technology rivals."
Posted by Chris Schrimpf| Comments (0)
Look Who Got Published!
January 06th 03:46:59 PM
S4's Evan Dent, got published in the Red Bluff Daily News, covering California's Tehama County. She points out that if our Congressmen can invest in their retirement, shouldn't we be able to invest in our own?
"This is a letter regarding the Dec. 17, 2005, letter, titled, 'Congressmen do pay into Social Security.' The author of the letter seemed to be implying that congressmen don't get a very good retirement deal as civic servants for the people of the U.S. I would argue that they get a much better deal than anything we have. Indeed, congressmen participate in the Social Security program that the rest of us do, but they also have another retirement program - the Thrift Savings Plan. This is a low-risk, low-cost retirement savings plan for federal employees where participants have their own personal retirement accounts.
The Thrift Savings Plan is a good model that should be used for Social Security reform. It is undeniable, with the demographics factor alone, that the current Social Security system is unsustainable. The American people will be faced with tax increases or benefit decreases unless the rate of return to investment of Social Security taxes can be increased. Why not allow all Americans the choice to participate in a retirement program that allows some of the tax dollars to be put into personal accounts where they can then be invested, creating personal nest-eggs for every working citizen? If the option to invest is good enough for our congressmen, it's good enough for us, right?"
Posted by Chris Schrimpf| Comments (2)
Looking Back
January 06th 11:54:41 AM
In 2000, Social Security was a winning issue, even in Florida. Reform is still a winning issue for those that embrace it.
From Cato:
"Despite ads attacking Social Security privatization, support for personal accounts remains strong in numerous public opinion polls. The New York Times released a poll of Florida residents Thursday in which 48 percent thought allowing individuals to invest portions of their Social Security taxes on their own was a 'good idea,' even after being warned that personal accounts 'would involve greater risk.' 46 percent were opposed. Strong majorities agreed, however, that the government should not bail out workers who make bad investments with their accounts. The fact that personal accounts can maintain that level of support even in a state where seniors make up more than a third of voters shows that fears of private investment have receded."
Posted by Chris Schrimpf| Comments (0)
January 05th, 2006FDR: The First Advocate of Personal Accounts
January 05th 10:13:07 AM
The idea that personal ownership and free-market innovation can improve society is not new. Indeed, the importance of freedom and the right to control one's future has been emphasized since our country was founded, which makes one wonder: who was the first advocate of Personal Retirement Accounts?
Believe it or not, it was Franklin Delanore Roosevelt.
On January 17, 1935, while outlining his vision for Social Security, FDR made the following statement to Congress:
"In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps thirty years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.." (emphasis added)
FDR was a realist as well as a visionary. As his statement to Congress makes clear, in the long run he believed self-supporting annuities could and should play the role in a social insurance system.
Now if only policymakers would listen...
Posted by Nicola Moore| Comments (0)
Thomas Friedman in the January 4th New York Times
January 05th 09:39:57 AM
Quotes U.S. Comptroller David Walker:
USA Today recently quoted David Walker, the U.S. comptroller general, as saying we are about to be hit by "a demographic tsunami" that will "never recede." The baby boomers total 77 million, and their first wave turns 60 this year. Unless we trim the Medicare and Social Security benefits promised to these boomers, the paper noted, America's "national debt will grow more than $3 trillion through 2010, to $11.2 trillion. The interest alone would cost $561 billion in 2010, the same as the Pentagon [budget]."
The same as the Pentagon's! So either Social Security and Medicare shrink or the Pentagon shrinks -- because higher taxes seem to be out of the question for now. If history is any guide, Americans will prefer Social Security and Medicare over paying to make the world safe for China, India, Russia and Iran to pursue their interests.
If so, the world may soon test out one of the most important theses of Mr. Mandelbaum's book: that the greatest threat to global stability is "not too much American power, but too little."
Posted by Chris Schrimpf| Comments (2)
January 04th, 2006A Must Read
January 04th 01:08:20 PM
Robert Samuelson in the Washington Post on "Our Retirement Paralysis":
As noted by recent cover stories in Newsweek and Business Week, the first of the roughly 77 million baby boomers turn 60 in 2006. J. Walker Smith of the polling firm of Yankelovich Partners told Newsweek that many boomers "think they're going to die before they get old" -- a reference to one survey in which boomers defined old age as starting around 80. Business Week asserted that fifty- and sixtysomethings consider their "middle age a new start on life" to indulge hobbies, begin new careers or remarry. These portraits of vigorous baby boomers clash with another reality: Their huge federal retirement benefits may seriously damage the economy and American politics.
Our continued unwillingness to address this disconnect counts as one of 2005's big stories. We should ask ourselves: Why? After all, the need is well known. Consider the Congressional Budget Office's just released projections. By 2030, Social Security, Medicare and Medicaid may cost 15 percent of national income -- almost double their level in 2000 and equal to 75 percent of today's federal budget. Left alone, these programs would require massive tax increases, cause immense deficits or crowd out other important government programs. We also know of at least partial solutions: curb costs by slowly raising eligibility ages and cutting benefits for wealthier recipients.
read on:
Still, we fiddle. The paralysis is understandable. No one wants to offend older voters, so we dance around the issues without truly engaging them. President Bush's ill-fated plan for "personal" investment accounts in Social Security was a perfect example. The president complained about unaffordable entitlement spending but never said how his plan would cure that problem. There was a reason: It wouldn't. In its first decades, it would mean more spending, not less. Government would pay for personal accounts and traditional benefits.
Democrats correctly saw Bush's proposal as a political attempt to steal their signature issue -- Social Security. For younger voters, the "personal accounts" might make the program a Republican product. It might cease being liberalism's crown jewel. Naturally, Democrats and the AARP denounced Bush's plan. People shouldn't depend on "risky" stocks for Social Security, they said. By July, an NBC/Wall Street Journal poll found that 57 percent of the public thought personal accounts a "bad idea." Even many Republicans abandoned Bush.
Doubting Bush's motives is easy, because in 2003, he had engaged in a similar political makeover for Medicare, through his drug benefit. It aimed to ingratiate the president with elderly voters in 2004. But the potential cost is huge. By 2015, the drug benefit could increase Medicare costs by 30 percent, says the CBO. All of Bush's complaints about runaway entitlement spending reek of hypocrisy.
But ascribing today's deadlock exclusively to Bush's clumsy partisanship is too glib. It ignores the many years in which Democrats have shamelessly exploited for political advantage any threats to Social Security and Medicare benefits. It also overlooks the deeper and more intractable source of our stalemate: competing moral claims.
If we were creating Social Security and Medicare today, we'd set different terms. The first baby boomers hitting 60 include George W. Bush, Bill Clinton, Donald Trump, Diane Sawyer and Susan Sarandon. It's doubtful we'd provide benefits for any of these wealthy people. Indeed, we'd probably be less generous toward many affluent retirees, because we'd question why age alone (not need) should qualify people for government assistance. We'd also note vast changes since 1935 (Social Security's creation) and 1965 (Medicare's):
In 1935, about 6 percent of the population was 65 and over; now, it's nearly 13 percent and headed toward 20 percent in 2030.
Life expectancy at 65 was less than 13 years in 1935; now, it's 18 and rising.
In 1965, one of three payroll jobs was in manufacturing, mining and construction; now, that's one in six.
Health spending increased from 6 percent of national income in 1965 to 15 percent in 2003.
People live longer, are healthier (77 percent of those age 65 to 74 rate their health as "good" or "excellent'') and have less grueling jobs. They can work longer and receive benefits later. We'd set higher eligibility ages. It's too expensive for government to support them for 20 or 30 years. We'd concentrate aid on the neediest and the oldest, including people whose longevity exhausted their savings. We'd regard this as a moral and practical obligation of a decent society.
Well, if that's what present conditions suggest, why do we tolerate a system that automatically pays many people who are well off and in good health? The answer is that people who have been promised Social Security and Medicare benefits believe they have a moral claim to receive them, even if -- absent the promise -- their claim would be dubious. True, people need to plan their futures. But the moral logic also rationalizes self-interest and selfishness. The compromise is to unwind gradually those promises that no longer make sense and are ultimately unworkable.
Until we challenge this moral logic -- the crux of entitlement politics -- public opinion will resist change and our paralysis will continue. The responsibility for this failure is widespread: among liberals, who like massive government programs; among conservatives, who fantasize about "free market" alternatives to Social Security and Medicare; among pundits and "experts," who speak of the "entitlement crisis" in meaningless generalities or incomprehensible technicalities. Our resulting inaction compounds many future dangers of an aging society: higher taxes, slower economic growth, squeezed government spending for non-elderly programs and more conflict between younger taxpayers and older beneficiaries.
Posted by Chris Schrimpf| Comments (0)
Social Security reform should be a top priority
January 04th 12:14:29 PM
Arnold Kling, PhD MIT, writes about an unpersuasive argument against reforming Social Security. Check it out!
Posted by Chris Schrimpf| Comments (1)
January 03rd, 2006Cookies Offer Lesson in Selfish Politics
January 03rd 09:45:29 AM
S4 has been passing out cookie jars to members of Congress that support reform. Now an attorney in Cincinnati extends the metaphor, writing in the Cincinnati Enquirer:
"The other day, my young son asked 'Dad, where are my cookies?' He started to sob. I could see the disappointment in his eyes. So, I pulled him close with a reassuring hug, apologized, and explained that I threw them out because I thought they were just crumbs. I thought he wouldn't notice.
Crumbs, indeed, but to him, it was all he had. It was what he looked forward to enjoying. He exclaimed that he was mad at me. I completely understood.
In the moments thereafter, I thought in my 'grown-up' view of the world: 'Son, if you are mad at me for this, just wait until you find out what my generation has set in place for you and your generation.'
Among the things that you should and will be mad at us about is that we have allowed our elected representatives to spend on indulgences rather than the basics that good government should provide and to overspend for our generation's whims without concerning ourselves for you and your generation...
read more
You will be mad at us because we have:
Built up a federal yearly budget deficit that strangles our budgetary flexibility.
Let the pressing needs of entitlement reform sit on a shelf ignored.
Saddled your generation and those beyond it with a national debt that creates a deficit on everyone's shoulders of nearly $30,000 per person.
Raised the standard of living of everyone else in the world in the name of a catchy global "rising tide" without realizing that the tide ebbs somewhere else (here in the United States) and therefore lowers your future standard of living.
Allowed our government to deteriorate into decision-making based upon what is good for factious party allegiances rather than what is good policy for generations.
Allowed perversely applied labels to define our politics wherein the ideas behind the labels are repugnant to the tenets that have historically defined the labels.
Let our politics be hijacked by a culture of division that creates outward hostilities to our fellow men and is contrary to the claims that we are a tolerant society mindful of the Judeo-Christian ethics that set our country's principles.
Placed the control of the purposes of our government in the hands of a few who demonstrate repeatedly that their aim is not for our or your generation, but for their self-enrichment, self-gratification and appeasement of their benefactors.
Son, I am sorry, and in the future I will be more careful when I place my determinations on your cookies. I will see your bits and pieces as more than just crumbs. I know you are mad at me and I am sorry for throwing away your cookies. But now I am also mad at myself and what I have allowed to happen. Please forgive me.
But now, let's go get a few more cookies, and we will leave even the smallest crumbs for you - if someone else doesn't get to them first.
Posted by Chris Schrimpf| Comments (0)
Another year, another $160 billion
January 03rd 09:29:51 AM
S4 wishes all personal account advocates a Happy New Year. We are still working hard in Washington and across the country to continue the momentum for personal accounts. A lot of progress was made in the last year, but a lot of work is still to be done. As we start a new year it is important to note that every year politicians wait for reform costs our generation $160 billion. That is a steep price tag, and one of the reasons we aren't going away.
Posted by Chris Schrimpf| Comments (0)
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