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August 16th, 2005Social Security Lessons WITHOUT Rants on Iraq
August 16th 10:20:53 AM
News Flash! Paul Krugman of the New York Times wrote an inflammatory column yesterday about the Bush Administration!
This happens twice a week, you say? Oh. Sorry, didn't mean to alarm anyone. Anyway, it was Social Security that met Krugman's chopping block on Monday.
The first thing Mr. Krugman announced was that Social Security reform has "flopped" and "almost disappeared from national discussion." Which begs the question, of course, then why are you writing about it?
Mr. Krugman is paradoxically writing about Social Security reform while declaring it defunct, because frankly, he's scared. The conversation has neither flopped, nor has the topic disappeared from national discussion. The 70th birthday of the Social Security system brought with it renewed enthusiasm about the reform, as many acknowledged the problems inherent in the system.
Turns out, Mr. Krugman is lying about his real views. Oh, I'm sorry - was that a rude thing to say? Still, the fact remains that in 1996, Mr. Krugman voiced his support for the creation of Personal Retirement Accounts: "I like [Richard] Freeman's idea of providing each individual with a trust fund when young rather than retirement benefits when old, but we had better realize that this is a significant change in the character of the social insurance system...The Ponzi game will soon be over, thanks to changing demographics..."
Mr. Krugman, the people have spoken, and they agree with you. A whopping SIXTY-SIX PERCENT of young people support the creation of Personal Retirement Accounts, and, in a recently-released poll, people over the age of 55 support PRAs by almost a 2-to-1 margin. More than half of those surveyed also said that they wished they had the opportunity to invest in a PRA when they were younger.
Forgive me if I'm wrong, but a policy reform can be considered dead in the water only after writers in premiere national newspapers stop writing about it. Clearly the people aren't ready to let go yet, Mr. Krugman, and, apparently, neither are you.
Posted by Erin Robert| Comments (0)
August 15th, 2005AARP Members support Personal Retirement Accounts by More than a 2-1 Margin
August 15th 05:21:58 PM
A poll that the media failed to report on found that:
"Voters age 55 and older think offering personal retirement accounts to young workers is a good idea by almost a two-to-one margin... with AARP members slightly more likely to say personal accounts are a good idea than non-AARP."
Among the other findings:
By 3-to-1 senior voters think that Social Security is not sound
Among the other findings:
By 3-to-1 senior voters think that Social Security is not sound
Also by a 3-to-1 margin seniors think it would be irresponsible if Congress does not reform Social Security
The majority of seniors think it would costs more to reform Social Security later than it would today
Sixty percent favor reforming Social Security so long as nothing changes for them.
Sixty percent also think young voters should be offered personal retirement accounts
Half of all seniors wish they had had the opportunity to own a PRA
Posted by Chris Schrimpf| Comments (1)
AARP shoots itself in the foot with their current research
August 15th 02:50:11 PM
So the AARP has released their periodic survey about the state of social security. We at S4 feel a little guilty that we didn't chip in for the research, because the numbers make our case for us.
Of course, after paying all of that money for the survey, they've got to use the data somehow. Lets go one-by-one through their findings and explain why they need to put the rose-colored glasses down.
2005 Social Security Anniversary Survey data demonstrate that the primary focus on personal or private accounts during 2005 has broadened and strengthened positive attitudes towards Social Security rather than weakened them.
Does the data lead to this conclusion? No.
On the contrary, 12 percent of respondents (up from 9 percent in 1985) think it would be better to phase out Social Security and require people to rely on private retirement plans.
Nor does the survey show that there are any positive attitudes about Social Security to "broaden and strengthen". 50% of respondenced answered "Agree completely" or "Agree somewhat" to the question In theory, Social Security is still a good idea, but I doubt that this country can afford it anymore. Furthermore, only 10% of respondents answered "Very confident" to the question How much confidence do you have in the future of the Social Security system?
Even if you discount all of the evidence and agree with the AARP, can one really say for sure that alleged increases in support for Social Security are a result of "the primary focus on personal or private accounts during 2005"? You can say it, but there's no evidence to back it up.
When asked which sources of retirement income on which they plan to rely, Social Security is rated a very close second to money accumulated through savings and investments. Furthermore, Social Security is ranked as the most important source of income respondents expect to rely or actually do rely upon, in retirement.
It sounds to me like more people plan to rely on income accumulated through savings and investments instead of Social Security. Wouldn't it be nice if we could allow these people to invest some of their Social Security payments in higher yield stocks or bonds?
Over the past 20 years, Social Security continues to be regarded as an important governmental program by most adult Americans.
No argument here. We at S4 agree that Social Security is important. That's why we're working so hard to protect it from a financial crisis a short 12 years away.
A substantial majority of non-retired adults reject the notion of getting out of the Social Security system.
We also agree here. Social Security should be restructured, but remain as an important retirement security program.
Most non-retired Americans agree that "Maybe I won’t need Social Security when I retire, but I definitely want to know it’s there just in case I do."
Well, if we want Social Security to be there for future retirees, something has to be done now. If we leave the system alone, we're looking at large benefit cuts or tax increases.
Americans would pay more now to maintain and ensure that Social Security will be there for them when they retire.
One has to read this carefully. The respondent is agreeing to pay more up front so that Social Security will be there for them when they retire. Nobody said they would pay more now to receive the same or lesser benefits in the future. I call this the "pot committed" answer. Current workers are "pot committed" to the program and would rather pay more to get something back than get nothing back. Personal accounts eliminate this difficult choice.
More Americans now, compared to a decade ago, agree their families would be hard hit if Social Security were cut. Furthermore, fewer Americans think people who receive Social Security benefits would do very well without their benefits.
This is exactly why we should allow people to invest in personal accounts that are not only more secure than the current system because everyone owns their share, but personal accounts invested in a mix of stocks and bonds (or even treasury bonds) would earn a higher return than the current system.
The erosion of confidence in the future of Social Security between 1985 and 1995 has been partially reversed in 2005.
They're really digging for compliments. Even though we have shown from the numbers that people don't have much confidence in the current program, the AARP is going to go and argue that this "lack of confidence" has been "partially reversed". Likewise, I could argue that a survey that says that 98% of respondents oppose murder (down from 99% a year ago) is a "partial reversal" even though those supporting murder increased by only 1% from 1% to 2%.
So what does the survey say about personal accounts specifically?
Using numbers right from the AARP's questionaire, it is quite easy to show that the public would support personal accounts.
In response to the statement: The government made a
commitment to people a long time ago about Social Security being there for them when they retire; the government can't break that
commitment., 80% either "Agreed strongly" or "Agreed somewhat". It has been shown that the only way to be sure that the government meets that commitment is to have personal accounts that are owned by everyone, instead of a giant slush fund that gets spent as part of general revenue.
In response to the statement: It would not be fair to people who
are retired or near retirement to
make major changes to Social
Security that would affect them., 85% "Agreed strongly" or "Agreed somewhat". That's why it is so great that personal accounts are optional. No one is forcing anyone to participate.
Furthermore, 88% believe that Social Security payments are too low or about right, and 79% believe payroll taxes are too high or about right.
So lets summarize. Most Americans have lost confidence in the structure of Social Security, but they feel we should do something to keep it around for our grandchildren. They also think that benefits are too low and taxes are too high, and they could do better investing their own money than giving it to the government.
Posted by Jeremy Tunnell| Comments (2)
FDR Supported Personal Accounts
August 15th 12:11:20 PM
The creator of Social Security, FDR, recognized the need to create a more sustainable system, "in the important field of security for old people, it seems necessary to adopt … voluntary contribution annuities by which individual initiative can increase the annual amounts received in old age."
For more on FDR's statement click here.
For more on past Democratic support for reform click here.
Posted by Chris Schrimpf| Comments (0)
Pelosi Doesn't Trust You
August 15th 11:52:57 AM
We've posted before about Nancy Pelosi's misleading comments about Social Security, but she continues to make them as seen on the social security choice website:
"Social Security has never failed to pay promised benefits, and Democrats will fight to make sure that Republicans do not turn a guaranteed benefit into a guaranteed gamble," said House Democratic leader Nancy Pelosi of California.
As Andy Roth writes:
"A guaranteed gamble? That's a loaded accusation.
Is a voluntary personal account containing only treasury bonds a gamble? Or even an account containing a conservative, diversified mix of stocks and bonds a gamble?"
Howard Dean doesn't think so.
Posted by Chris Schrimpf| Comments (0)
August 13th, 2005Howard Dean no different than the AARP?
August 13th 11:24:35 AM
We have already established that the AARP rails against personal accounts, all the while selling retirement packages loaded with stocks to their members.
Well, according to his financial records, it looks like Howard Dean, staunch opponent of any attempt to allow people to invest Social Security taxes in stocks and bonds, happens to hold almost 2.5 million in....you guessed it...stocks and bonds.
This looks like a classic case of hypocrisy to me.
Posted by Jeremy Tunnell| Comments (0)
August 12th, 2005MYTH-BUSTING THE TRUTH SQUAD
August 12th 04:08:30 PM
Americans United to Protect Social Security, is a group that "seek[s] to counter an all-out campaign by the White House in support of its proposed overhaul of Social Security." Supported by a plethora of liberal groups, AUPSS has taken a one-sided approach to this debate, calling into question whether the debate over Social Security "privatization" is about reexamining the welfare state or just one more petty partisan squabble.
AUPSS uses a group dubbed "The Truth Squad" to attack the claims made by those who support instituting Personal Retirement Accounts in the Social Security system. It’s time to debunk some of the "truths" this group purports...
TRUTH SQUAD MYTH #1: Adding private accounts to Social Security does not add one day to the solvency of Social Security, as even senior White House advisors have now conceded. In fact, George W. Bush has been advocating privatization since he ran for Congress in 1976, and told people back then that Social Security would be bankrupt by 1988 without privatization.
Been there, done that; Social Security insolvency has been a recurring topic since its creation in 1935. That is why the 1983 commission, chaired by now-Federal Reserve Chairman Greenspan, was convened: to address the impending funding crisis.
The result? An increase in taxes and a reduction in benefits (through a COLA adjustment) – the 19th the system had seen since its inception in 1935. Here we are, 22 years later, addressing the same problem. Isn't it time to solve the system permanently, so we don't have to redress this issue twenty years from now? The late Democratic Senator Patrick Moynihan sat on both the 1983 and 2001 Presidential Committees to Strengthen Social Security and supported the integration of Personal Retirement Accounts into the current system in 2001: tax breaks did not work the first time around.
TRUTH SQUAD MYTH #2: Congress should only consider changes that strengthen the system's finances. The first step is making a commitment that all the money people pay into Social Security will be used to pay the benefits Americans have paid for.
Been there, done that. We've tried addressing only solvency, but it has become apparent that the structure of Social Security is outdated and does not reflect an economy or a population that has evolved over the last 70 years.
TRUTH SQUAD MYTH #3: Social Security can be strengthened for the long term with common-sense, bi-partisan changes. That has worked before, and it will work again. But real bi-partisan progress cannot happen until everyone agrees to focus on strengthening Social Security, instead of replacing it with a privatization scheme.
All evidence to the contrary. If Social Security reform had "worked" in the past, then we would not be addressing the problem once again today.
TRUTH SQUAD MYTH #4: They say privatization will be voluntary, but you will have your benefits slashed by 40% even if you don't volunteer to participate.
It appears that the "Truth Squad" is engaging in the fact-bending it accuses supporters of personal accounts of partaking in. Under Plan 2 constructed by the President's Commission to Strengthen Social Security, the growth of benefits would be cut, indexed to inflation rather than wages; benefits themselves will not be cut. Anyone who has taken a calculus class knows that while the slope of a line is decreasing, the line itself can still be increasing.
The growth of benefits will have to be cut under any plan, whether proposed by Democrats or Republicans. This is NOT a choice made by either political party, but an accounting problem.
The balance sheet doesn't care which party is in control; the system simply cannot afford to pay promised benefits.
TRUTH SQUAD MYTH #5: It's a Lose-Lose scam. Privatizers claim that you can keep your private accounts, but they don't tell you that the government will actually take back 70% or more of your account at retirement. If you invest poorly, you lose; if you invest well, you will be penalized more than 70%.
This statement is not rooted in fact. Under no proposed plan does the government have any ability to access your personal account. The entire purpose of personal accounts is that they are the PRIVATE PROPERTY of the citizen, able to be passed down to the next generation.
Furthermore, no one will be able to "invest poorly," because one does not choose their individual investments, but from fixed plans already in place. All plans currently on the table propose that no one will fall beneath a minimum level of benefits – not exactly a "risky scheme."
TRUTH SQUAD MYTH #6: They say people age 55 and over will be protected from any changes, but their plan will weaken the Social Security Trust fund that pays benefits.
Weaken the Trust Fund? I'm afraid it's a little late for that. The Trust Fund is merely a collection of IOU slips that the government owes itself. Furthermore, the Trust Fund is in enough trouble on its own; it is exhausted in 2041 if no action is taken.
Any changes to the system would not affect anyone over the age of 55. For those of us who are just starting our careers, however, the benefits are tangible.
Apparently "The Truth Squad" is a misnomer.
Posted by Chris Schrimpf| Comments (15)
The Move-On rally today was a bust...
August 12th 12:03:22 PM
So we actually had two events today to attend. Ursula was speaking at the National Press Club at 10:00 and Move-On.org was holding a rally a few minutes later at the mall.
Well, we got there late, but we were determined to catch the end and get an alternative point of view out there for the media.
Alas, we made it just in time to see the last of the media leaving. We stopped one reporter to ask about what had happened. Apparently Move-On managed to draw a crowd of 25. Yes you heard me, 25.
With all of the money they have, you'd think they would be able to drum up more support. *shrug*
Posted by Jeremy Tunnell| Comments (0)
Generations Gather to Celebrate Social Security
August 12th 12:00:32 PM
Students for Saving Social Security shares stage with the 60-Plus Association to highlight intra-generational support for Personal Retirement Accounts
This morning we teamed up with the 60-Plus Association to highlight the collaborative support, of both retired and younger Americans, for personal accounts.
Featured speakers included: S4 member Ursula Williams, the President of 60-Plus Jim Martin, James Lockhart, Deputy Commissioner of Social Security, Dr. Christian Weller, Senior Economist for the Center for American Progess and Donald Lambro from the Washington Times.
The groups celebrated the 70th birthday of the Social Security Trust Fund by symbolically cutting a birthday cake. A member of 60-Plus received the largest piece, while Ursula Williams from Students for Saving Social Security, received only crumbs.
“Cutting the cake showed visually what young people can expect from Social Security,” said Williams, a recent graduate of Biola University. “Under the current system young Americans can not expect to receive the same level of benefits our parents and grandparents receive. The simple fact is that the trust fund just isn’t there.”
“The only way we can expect a secure retirement is if we are given the choice of owning our retirement,” continued Williams. “Personal Retirement Accounts would give every American their own personal lock box that Congress couldn’t raid. We would know that our retirement money is safe.”
Posted by Chris Schrimpf| Comments (0)
August 11th, 2005Some good posts on Social Security...
August 11th 03:34:25 PM
Andrew Roth over at Social Security Choice has linked a number of interesting articles. Check them out.
Posted by Jeremy Tunnell| Comments (0)
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