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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: tonto who wrote (3458)	2/21/2004 2:27:03 PM
From: CalculatedRisk	Read Replies (2) \| Respond to of 81568

<off topic> You are right about Social Security morphing. Between when it was conceived (early 30s) and that quote by Truman (1945), the reasoning behind the program had already changed. What did the initial recipients “earn”? They were never taxed for Social Security. So contrary to Truman’s claim, Social Security was originally a “dole”. And since Truman’s administration, it has morphed much more. But enough history; lets look at the CATO proposal that you posted. Right away you can see that CATO thinks in terms or “return on investment”. But this ignores the fact that SS was designed as a “pay as you go” system; there are no investments! Therefore you cannot calculate a return. The money you pay into the plan today is not your money, it is just another tax. (Don't get confused by the SS trust fund - that is another topic) Here is a simple way to look at this issue. Assume there was no SS today (no taxes, no benefits, and no concern about transition from the current plan to a private plan). Would you support a government mandated savings plan (self directed) as suggested by CATO? I wouldn’t. I prefer to make my own decisions on whether to save or spend. Also, the deficit would be significantly larger. Right now SS is running an annual surplus of about $170 Billion. This money goes directly into the general fund and is spent. Bush claims that the deficit this year will be $521 Billion, but he is using the SS surplus to offset a portion of the deficit, so the actual deficit would be projected at $691 Billion (not counting supplemental requests for Iraq). And the original reason for SS would reappear: destitute elderly Americans! So we would need another new program to help these people. Maybe we could call it “Social Security”! I believe there needs to be SS reform. But privatization is definitely not the solution.