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Politics : The Castle -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (181)	11/9/2002 1:51:28 PM
From: i-node	Read Replies (2) \| Respond to of 7936

Privatization has the attraction of the illusion of "keeping" the money. Privatization is the only hope for salvaging a program that is, instrinsically, actuarily unsound. Only if some technique is developed under which SS funds can grow at market rates, is there any possibility of being able to maintain the kinds of benefit payout ratios that are projected to be required. Privatization is the only idea I've heard that offers that possibility. The time value of money begins to be substantial when you look out more than 30 years. But this is a knife that cuts both ways: Compounded earnings over 30-40 years can be great, but discounted somes for the same period are nothing. If something is done to get even a small portion of SS funds growing at a higher rate, it is possible that over a 50 or 60 year period the program could start to dig out. This can't happen under the current scenario because benefit payouts are going to grow at a faster rate than the invested assets. Unfortunately, this administration has zero financial credibility, and it's unlikely those funds will be protected in any way. The past 25 years the Democrats have been the party of fiscal responsibility in government, odd as that seems, and the Bushes in particular have spent into oblivion. Perhaps you don't realize that ALL spending is done by Congress and that the president has no authority to spend a nickel without congress first appropriating the funds. Presidents don't spend money. Congress does. Who has controlled Congress for the last 25 years? The only time any progress was made on controlling spending was when Congress was under Republican control.

To: MSI who wrote (181)	11/9/2002 1:51:59 PM
From: TimF	Read Replies (1) \| Respond to of 7936

Social Security is an entitlement which means the payouts are required by law. Of course Congress can change the laws so in that sense there is no guarantee but it would politically be difficult to do more then nibble at the margins of social security at least if it was not facing immediate collapse. But at some point it might face collapse and then we have a big mess to deal with. I do agree with your point about how the money is comming from current revenuee, and that it doesn't operate like insurance is normally supposed to. Privatization has the attraction of the illusion of "keeping" the money. It doesn't have to be an illusion. Unfortunately, this administration has zero financial credibility I would not rate its fiscal record very highly but it is not unusally bad when measured against the low standards of administrations in my life time (I was born in 68) The past 25 years the Democrats have been the party of fiscal responsibility in government The Democrats increase spending and taxes and then the Republicans decrease the taxes without decreaseing the spending. I know that is simplistic and not entirely accurate but it covers the basic trend. That is in terms of administrations, but what is perhaps more important is who controls congress. Generally when congress is controled by Repbulicans there is more fiscal discipline. This is esp. true when you consider new expensive programs to be a case of lack of fiscal discipline, even if there is enough funds to pay for there current need at the time when they are enacted without going into deficit (or increaseing deficit spending) Tim