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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (212751)	12/6/2004 10:46:15 AM
From: Road Walker	Respond to of 1573458

Amy, re: The answer to your question is actually partially in your statement below: "we simply can't afford any more debt, which I think will become very obvious in the next several years (if not months). " That's great you expect to get benefits. I can't think of anyone from my generation that does. That's the cynicism that I mean. My generation, to a much greater extent, seemed to believe that they controlled the government. The younger people I talk with always seem to feel that they have no control of their destiny (and thus no motivation to get involved). A thought off the top of my head, maybe it was the inspiration of John Kennedy that was part of the difference; we lived that, you guys didn't. Maybe the long struggle to end Vietnam. re: You mentioned you have a hard time convincing young people to save, so far I have a 100% success rate in convincing young people to save. I don't focus on the "$20 if you save $40 thing", what I think works better is a spreadsheet that always convinces people to save money: it shows that $1 saved when you are 20 is (off the top of my head) about $8 when you retire (corrected by inflation too). I also tell them the average cost of a wedding is $10,000 in America, but if you instead put that money into an IRA on the day you have your first child, your child would have $1,000,000 million dollars (corrected by inflation too) when your child eventually retires. I tell them, "that would nip the SS and retirement problem - and isn't it amazing there is no law set up to encourage this solution." I'll give that a shot (though this isn't my job). I also use the "pay yourself first" argument. John

To: Amy J who wrote (212751)	12/6/2004 1:44:04 PM
From: Road Walker	Read Replies (2) \| Respond to of 1573458

A taxing idea for Social Security December 6, 2004 BY ROBERT NOVAK <conservative> SUN-TIMES COLUMNIST Republican Sen. Lindsey Graham of South Carolina startled the capital's conservative network last month with a speech on Social Security reform at the Heritage Foundation. His call for private accounts was sound conservative doctrine, but he proposed financing it with a huge payroll tax increase for upper-bracket Americans. This was heresy, conservatives said, by Strom Thurmond's successor. Graham responds this is the only way President Bush's priority reforms will be passed. He states two axioms his fellow conservatives will not address. First, Social Security -- the government's most popular program -- cannot be saved without 'some sacrifice.' Second, the personal accounts Republicans want cannot be passed without bipartisan cooperation -- meaning a high-profile Democratic co-sponsor. Graham is proposing a bargain of historic proportions. To reform Social Security, each party must do something unthinkable. Democrats would have to swallow personal accounts declared anathema by the AARP, organized labor and every sector of the party. Republicans would have to go along with a tax increase falling heavily on their base. Graham is a 49-year-old country trial lawyer finishing his second year as a senator, but lack of seniority has not bothered him before. Elected to Congress in the Republican sweep of 1994, he helped lead the coup that almost ousted Newt Gingrich as speaker of the House in 1997 and in fact fatally wounded him. Ever since his 2002 election to the Senate, he has been pressing Social Security reform, and he now has the ear of important White House aides. On Nov. 18, Graham introduced a bill that looks, superficially, like other Republican proposals. Current Social Security beneficiaries and workers age 55 and older would not be affected. Workers aged 54 and younger could set aside 4 percentage points of their 12.4 percent Social Security payroll tax for private accounts that they and their heirs would keep forever. The distinctive Graham twist is that workers 'who don't want to take part in a modernized system' would be taxed at higher rates -- rising over the years. Graham's bill and accompanying statement did not address the elephant in the living room that Republicans ignore: an estimated $1 trillion in transition costs. He did address it in his Heritage speech. Ruling out financing the cost through federal borrowing, his answer is the un-Republican solution of higher taxes -- raising the $87,900 income limit subject to the payroll tax by an unspecified amount. Boosting it to $200,000 will completely pay for transitional costs in 10 years. As revenues grow, Graham's plan would reduce the 12.4 percent payroll tax rate. This is a net tax increase for upper-middle income taxpayers who voted for Bush as a tax cutter. Such an outcome would be hard for Republicans to swallow, and early reaction has been negative. 'I just think Lindsey is trying to be virtuous,' one supply-side theorist told me. Graham responded: 'Virtuous? I'm just trying to be practical.' His tax plan, Graham believes, is the only way he can attract Democratic co-sponsors for private accounts. Democrats correctly have viewed millions of lower-income Americans holding stock and bond funds as a dagger at their breast. The voter who has discovered the joys of financial markets is automatically a potential GOP convert. Although Democrats might find it harder to accept private accounts than Republicans to accept a higher tax base, there are Senate Democrats who qualify as possible co-sponsors: old-fashioned fiscal conservatives from 'red' states who might buy in to Graham's bargain. Ben Nelson of Nebraska and Bill Nelson of Florida are obvious, but both are junior senators. Graham needs a senior Democrat who has pounded at the Bush deficits, such as Max Baucus or Kent Conrad, ranking Democrats on the Finance and Budget committees, respectively. It is difficult to measure the accumulated conventional wisdom on both sides of the aisle Graham must overcome. Time is not on his side. With Social Security heading Bush's second-term agenda, he feels he has no more than six months to sell his plan. His bargain would be painful for both sides, but nobody else has an idea with a chance to succeed.