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Politics : Formerly About Advanced Micro Devices
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To: TimF who wrote (217548)2/5/2005 8:32:57 AM
From: Road Walker  Read Replies (2) of 1571418
 
re: I'd take that bet except we will probably both be dead 100 years from now.

You would probably lose.

re: In a 30 year flat to down market the odds are against there being the type of economic growth that would be needed to continue the projected level of social security payouts without large tax increases which could make the general economic situation even worse.

You can't have it both ways. The growth rate assumption for SS going into deficit is 1.8%. The Bush plan pegs private accounts being a net positive to people at >3%, so the 1.8% would be a significant negative return. And he assumes a growth rate of 4.6%, which would take SS out of deficit.

This is really an important issue, and there are a lot of funny numbers being floated by the government. We really need to step back and look at this from a cold, non-ideological, purely financial perspective. It should be easy (not for me) to do a spreadsheet on positive/negative of private accounts with all the different growth and inflation scenarios.

Of course Bush won't give up the key number, the reduction of benefits for those that opt for the private accounts. He's on the road selling the concept and will slip in the bad news later.

BTW, I was born in 1949 so I don't have skin in the game. My concern is the debt that will be generated by the program, and the subsequent rise in interest rates and inflation and decrease in standard of living.

John
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