October 31st, 2006

A good article from Cato's Michael Tanner.

October 30th, 2006

Unfortunately, there is no punchline here.  The traditional, three-legged approach to retirement wealth--savings, Social Security, and pensions--has lost a leg.  In an article that is supposed to counter conventional wisdom,  MarketWatch claims that Americans are saving more than people realize.  This line of thinking suggests that we should not be concerned with low (or negative) savings because the the savings rate is not an accurate determination of consumer habits.  As MarketWatch puts it, "We're better savers than numbers show."

Where, one wonders, is all of this savings?  As it turns out, MarketWatch has the answer: in pension plans.  "Most Americans would hardly be saving at all if not for their workplace retirement plan," the article explains.  In fact, when the savings rate number is adjusted for pension savings, "That number becomes zero." 

Wow, what great savers we are!

MarketWatch does have a point about putting away more money than the savings rate suggests, though.  When the savings rate is negative, as it was in 2005, a savings of zero is actually better than the numbers show. 

We should note for those of you playing at home that whether you have negative money or zero money, you will not be allowed to compete in Final Jeopardy.  You'll be asked, instead, to go home and think about whether you were in fact a better player than the numbers showed.

October 27th, 2006

S4 Advisory Board member Tim Penny was on Fox News last night talking about the For Our Grandchildren pledge.  The former Congressman has been working with For Our Grandchildren to find support for Social Security reform among current members of Congress and this year's challengers.  "Signers simply commit to participating in an honest discussion about how to fix Social Security, with nothing ruled in or ruled out," Penny explains.  How could anyone be against that?

Even Rep. Charlie Rangel (D-NY), who opposes personal accounts and has prevented fellow Democrats from advancing reform, now says that he is willing to "come to the table" provided that others "work in a bipartisan way."  At the very least, Rangel's commitment means two things:

1) Rangel knows that Social Security is in trouble and needs reform.

2) He understands that the political parties need to work together in order to fix the system once and for all.

It's a bit strange that an acknowledgement of the basic facts represents progress for some folks, but we're happy to see the debate advance. 

The signing of For Our Grandchildren's pledge is a great step toward finding common ground and working out a solution, and we are hoping that all members of Congress commit to the honesty that we expect from our leaders. 

October 25th, 2006

Destiny's Child disappointed penniless men and PRA-lovers everywhere with their 1999 jumpoff, Bills, Bills, Bills.  The song hinted to prospective love interests that a relationship with Beyonce or one of the others hinged upon whether a man could pay the telephone bills and automo' bills of Destiny's Child.  It was a bold statement of irresponsibility that irritated independent women across the country.

Realizing their mistake, Destiny's Child came out with Independent Women in 2001, a song that recognized the importance of Social Security reform for women and placed Beyonce and the others at the forefront of the personal accounts debate.  "I depend on me," the group proclaimed, making it clear that they didn't want others supporting their retirement.  Furthermore, they asked that "All the honeys who makin' money" and "All the mommas who profit dollas" join the celebration of self-reliance.

Why did Destiny's Child change their views on personal accounts?  It's simple.  Once Destiny's Child started to sell some records, financial independence allowed them to remove unwanted interferences from their lives.  They realized that even though "it ain't easy being independent," it is more free and more satisfying.  "I worked hard and sacrificed to get what I get," the song explains.  Why put the results of your hard work and sacrifice into a program that won't be able to pay your bills?  Wouldn't it be better to invest the money and have ownership of it?

"Depend on no one else to give you what you want," Destiny's Child advises.  That goes for shoes and diamonds, but it also goes for security in retirement.  I like the knowledge that they bring.  Thanks, Destiny's Child.

October 24th, 2006

Guest Blog

Our Guest Blog today is from Allison Kasic Director of Campus Programs at the Independent Women's Forum

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Last week, the Independent Women's Forum released a new publication, Social Insecurity,authored by yours truly.

The goal of the paper was to package all the great Social Security research that is out there into an easy to read and enjoyable publication for college students.  As Chaz notes below, it is full of pop culture references.

IWF has a long history of putting out research on how SS reform would benefit women.  I wanted to use this new publication to show how young workers stand to benefit from reform.  Sadly, it's hard to find a voice of reason on most college campuses about SS reform (which is a good reason for you to start an S4 chapter on your campus if you haven't already).  Check out this example from my paper:

At my alma mater, Bucknell University, the economics department went so far as to say that there wasn't a problem with the Social Security system.  The department brought Dean Baker of the Center for Economic and Policy Research to campus to deflate the scare stories about Social Security.  All students in entry-level economics a required class for several majors were either offered extra credit or required to attend the lecture.  The same month that Baker spoke, the Bucknell University Conservatives Club sponsored a town hall meeting with Senator Rick Santorum on Social Security reform. Needless to say, Senator Santorum's visit took place with no support from the economics department.

If you read the resistance to the solution section of the paper, you'll note that there are a lot of people working very hard to make sure that you and I are stuck with a Social Security system that is a ticking time bomb of failure.  That's all the more reason for you to educate yourself about Social Security reform, tell all your friends, and take action to push for reform today.  Our generation can't afford to wait each day the problem only gets worse.

Social Insecurity is available on the IWF website here.

October 23rd, 2006

Several weeks ago, S4 co-founder Patrick Wetherille was invited to join AARP, a group representing the interests of people 50 and over.  AARP, formerly known as the American Association of Retired Persons, opposes personal retirement accounts despite Social Security benefit protection for its members.  Furthermore, the group encourages members to put their money in AARP investment funds but wants to prevent young people from investing a portion of our payroll taxes into similar, non-AARP funds.

So what did Patrick do with the invitation?  He joined AARP, of course!  He may look young, but if Patrick hikes up his pants and puts on some really serious sunglasses, he just might blend in with his new friends.  From there, he'll be able to speak up for all of the AARP members who support personal accounts. 

"AARP's arguments against personal retirement accounts run contrary to their goal of security in retirement," Wetherille says.  "More importantly, AARP's arguments run contrary to the views of a great number of AARP members who strongly support personal accounts in Social Security."

Check out the press release here.

October 19th, 2006

October 18th, 2006

Atlanta rapper Ludacris came out with a new record a few weeks ago, and he's got some strong words about personal accounts. Whether he knows it or not, Ludacris is most likely a supporter of personal retirement accounts. In his song "Mouths to Feed," Ludacris raps,

I'm 'bout supply and demand...

I'm the [expletive] future, I'm a working machine

Don't trust a soul, I'm the only one watching my green.

Though open to interpretation, "Mouths to Feed" seems to address the demographic changes that have resulted in fewer workers contributing to the Social Security benefits that each retiree deserves. We're working machines, but the money that we are paying into the system supports current retirees. And even though the program is running a surplus, no money is set aside for our eventual retirement.  Congress isn't watching our green, they're just spending it. 

In his most pointed criticism yet of the Social Security "trust fund," Ludacris points out that "If it don't make dolla' then it don't make sense." This is the same argument we've been making: young people could get a much better rate of return on our payroll taxes if we were allowed to invest in the market through personal accounts.

When it comes to Social Security, Luda tells it like it is. Thanks, Ludacris.