July 22nd, 2006It's official: Washington is Bankrupt
July 22nd 10:48:12 AM
Advocates of the status quo cringe when reformers call Social Security’s incipient fiscal imbalance a “crisis.” So what would they think of the Federal Reserve Bank of St. Louis, which has recently concluded that the federal government, because it has promised through entitlement programs much more than it can conceivably pay, is bankrupt (see NCPA piece)?
The author of the study, Boston University economics professor and National Bureau of Economic Research associate Laurence J. Kotlikoff, argues that to save the system, Congress can either double personal and corporate tax rates, slash Medicare and Social Security by two-thirds, or open up the system to personal (yes, private) investment.
Of course, in terms of popular legislation, privitazation is no GI Bill. But in light of the alternatives--major tax hikes, or debilitating benefit cuts--couldn't even the AARP stomach personal accounts?
Posted by Ryan Walsh| Comments (0)
July 21st, 2006S4's Hill Event an overwhelming success!
July 21st 01:27:02 PM
We have finally recovered from our huge hill event on Wednesday...almost.
After months of planning, and a very hectic 24 hours before the event, everything went off without a hitch. |  |
We had over 300 people at our Noon event, and the speakers were great (video coming soon)! A key quote from our speaker (and Social Security reform Rock Star), Senator DeMint:
Every dollar that [has been] put into Social Security my whole life, has already been spent...And unless we change something, every dollar you put into Social Security will be spent before you get to retirement.”
S4 Co-Founder Patrick Wetherille greets Senator DeMint at the event.
What about the afterparty you say? Well, pictures are worth a thousand words...
Posted by Jeremy Tunnell| Comments (0)
July 17th, 2006Big Hill event coming up on Wednesday!
July 17th 02:29:36 PM
Just a reminder that we're very busy here in the S4 office preparing for our Hill event this Wednesday.
To start off, we'll be in Dirksen G-50Hart 902 at Noon to hear Senator DeMint, and Representatives Kolbe and King talk about how Social Security reform affects young people. First 150 people there get free lunch! We'll also be hearing from a number of other organizations that care about reform. . .
Then, we'll be having an afterparty at 6pm near the White House with free food and drinks! You can get tickets for the afterparty at our noon event.
If you can come, head here to RSVP. See you there!
Posted by Jeremy Tunnell| Comments (0)
July 10th, 2006Social Security Buzz
July 10th 10:34:56 AM
If it weren’t for those dang “transition costs,” everyone seems to think, personal accounts would sail through Congress, no questions asked.
Patrick Barron, writing for the Evening Bulletin, thinks so.
So does Bruce Braley, a lawyer from Iowa running for a vacated seat in the H.O.R. If personal accounts were to pass, he thunders, “future generations both here and across the country will be saddled with decades of debt and no guaranteed retirement security.”
True, partial privatization of Social Security would require an initial injection of general revenue for it to get up on its feet and attain solvency. But by what accounting measure could anyone call a “cost” any plan that abolishes $12 trillion of debt for around one-sixth the price? As the liberal editorial board of the Washington Post put it two years ago, “In a soundly designed privatization, this transition cost would generate an equal and opposing transition benefit. The workers who divert part of their payroll tax into personal accounts would accept an offsetting cut in future Social Security payments from the government, thus reducing the nation’s debt to future recipients…. the net transition cost should be zero.”
No guaranteed retirement security? Give us a break. If he were describing Social Security’s current fiscal state rather than partial privatization, Braley’s political sound bite would ring true.
Considering that a medium income worker born after 1965 can count only on a rate-of-return of less than 2 percent on his or her Social Security taxes, juxtaposed with the fact that the average annual return on stocks has for decades been 6.7 percent above inflation, S4 opts for the later. Nevertheless, Braley looks at the same numbers and proceeds to call a personal-account pension program, the fruits of which he himself will enjoy if he is elected (the Thrift Savings Plan), risky. Must be the new math.
Posted by Ryan Walsh| Comments (0)
July 06th, 2006Social Security "duel" participants end up on same side
July 06th 09:54:19 AM
I just recently came across a Social Security "duel" on The Motley Fool. While appearing to be an interesting concept, it seems that the Fool had trouble finding columnists with strong feelings on the issue.
The format is this: A Social Security "Bear" op-ed, followed by a "Bull" op-ed. Then, each side is allowed a rebuttal.
Let's dive into the meat of their arguments.
First, the Social Security "Bear" claims that Social Security is unsustainable, citing increased life expectancy and demographics. He ends with this:
Regardless of what happens with Social Security, Fools would be best prepared to conclude that it will fail, and that they will instead need to go it alone in planning their retirement. There's still no guarantee of the outcome, but it's better to do all you can to ensure you're safer, rather than sorry. Changes will have to be made to the Social Security system to ensure that those caught without a retirement safety net won't fall too far from home.
While I certainly don't disagree completely with his conclusion, I think he understates the problems with the current system by a large degree.
He fails to mention that the current system is bad for minorities and bad for women, and a failure to address the problems could either cause the elderly poverty rate to skyrocket or necessitate crushing tax rates. He further fails to discuss the inefficiency and low rate of return of the current system, the fact that the "surplus" is being spent on other government programs, or the inherent political risks of keeping Social Security as a transfer payment program.
He could have made a better effort.
Next, the Social Security "bull" is supposed to argue the good side of the current system, but it seems as if he just can't think of many things to praise.
He talks about people being irresponsible and not saving for retirement and how the current system makes them save. However, this is not necessarily an argument in favor of the current system, just in some type of required savings program.
Furthermore, the second half of his essay falls under the heading of "The system's not perfect". His whole argument boils down to "The current system is bad, but at least it's better than nothing". Who can argue with such a noncommittal statement?
His parting quote sums it up:
We can debate the structure of the program, but it's hard to argue that the program hasn't benefited millions of Americans.
So what we gain from this "duel" seems to be...
- The "pro" side concedes that the structure of the program is less than optimal, that we face real problems in fulfilling promised benefits, but that we should be happy with a -50% return on our investment.
- The "con" side argues that the current system has demographic problems that makes it unsustainable in the long term and advises people to assume that it won't be there at all
It seems to me that our bull and bear are both on the same side: in favor of reform.
You can read the rebuttals here:
Bear Rebuttal
Bull Rebuttal
Posted by Jeremy Tunnell| Comments (0)
Libertarian National Convention
July 06th 02:48:35 AM
Portland, Oregon was def rockin this past weekend...Libertarians from across the country joined for their national convention, which is held every 2 years. Of course, S4 could not miss out on an opportunity to reachout and connect with individuals that obviously have heart and passion  for example, this is one guy's reaction to all the different stats and facts that demonstrate what an unfair social security systen we currently have! check out all the pictures from the weekend!
Posted by Evan Dent| Comments (0)
July 04th, 2006Happy 4th of July!
July 04th 11:05:27 AM
Check out this great article by Tim Penny "Taxation without Representation: Time for another Boston Tea Party?"
Posted by Evan Dent| Comments (0)
June 28th, 2006Bush committed to Social Security
June 28th 02:07:28 PM
We can’t get it done this year, I’m going to try next year. And if we can’t get it done next year, I’m going to try the year after that. Because it is the right thing to do.
In a speech given yesterday by President Bush at the Manhattan Institute (link to video and transcript), he is still committed to Social Security.
Is the President the only one? No!
Two weeks ago at the American Enterprise Institute, nonpartisan panel of economist presented a Social Security plan that they felt would please both parties.
And week before that, Congressman Jim McCrery, who is the leading contender for the chair of the Ways and Means Committee, wants to make Social Security top priority in 2007.
Henry Paulson, Treasury security nominee, said “the nation should put a high priority on reducing the costs of Social Security.”
I am could go on quoting politicians advocating for Social Security, but I think you get the point.
What does all this mean? It means Social Security reform is near and the future of American is looking better. In 2007, we will see a improved Social Security System.
Posted by Andrew Edwards| Comments (0)
June 27th, 2006It's dangerous out there...
June 27th 04:34:34 PM
As I left my apartment this morning and waded through the flood waters to get to work (everyone made it in, whew!), there was only one thing on my mind.
That's right: Pirates. |  |
Now usually, there's not much to fear because, they're usually held at bay down the Potomac. But today was different. Today they had free reign through the streets. There's no way of knowing how many might be lurking around the corner.
However, being entirely selfless, my concern was for Social Security, you see.
For a long time, Social Security has been taking in more money than it pays out. This extra money has been put into what Congress calls a "Trust Fund". I wondered if it might be exposed to these marauding pirates to run away with.
But then I realized -- the only thing in the "Trust Fund" are government IOUs. I'm not a Pirate expert, but I doubt they're going to run away with a chest of government bonds. It just isn't their style.
What we should really be concerned about are the Pirates in Congress that continue to raid our Trust Fund so they can spend more on government programs.
We at S4 will continue to fight against such dastardly deeds...if we're not taken prisoner on the way home tonight.
Posted by Jeremy Tunnell| Comments (0)
S4 and Seniors
June 27th 11:41:09 AM
Be sure to check out our recently opened website for seniors! Click on the "S4 and Seniors" button on the left side of the page to learn about S4's efforts to involve every generation in the efforts for Social Security reform.
Posted by Zack Stiefler| Comments (0)
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